Manager of Hong Kong’s Link REIT Launches Private Funds Business

The manager of Link REIT has launched a private funds business called Link Real Estate Partners, as the Hong Kong-based firm looks to build on its nearly 20-year track record overseeing Asia’s biggest listed property trust.

The new business line is helmed by former BlackRock head of Asia Pacific real estate John Saunders, who heads LREP alongside his existing role as group chief investment officer of Link Asset Management. The founding of LREP culminates a year-long effort by Link to ramp up its fund management capability after managing Link REIT exclusively, with the firm previously hinting at joint ventures, co-investments and management contracts as potential structures.

Saunders, who joined Link from the world’s biggest asset manager in December 2023, leads a dedicated LREP team that includes former Abrdn analyst Milan Khatri as head of research, ex-Deutsche Bank and Empire State Realty Trust exec Eric Liang as portfolio director and Phoenix Property Investors alum Bianca Dubbelaar as product strategist.

Speaking at last May’s Mingtiandi Hong Kong Forum, Link Asset Management group CEO George Hongchoy described property operations and fund management as “two very good, distinct businesses that we want to grow in parallel” as the firm adopts an “asset lighter” model under the Link 3.0 initiative.

Strength of Experience

LREP plans to draw on Link’s knowledge and scale in Asia Pacific real estate to identify and execute strategies for investors across the risk spectrum. Via Hong Kong-listed Link REIT, the group manages a $30 billion portfolio of 130 APAC assets spanning more than 24 million square feet (2.2 million square metres) of commercial space.

Link has continued to make moves to bolster the leadership of its 1,400 staff in the region, including the elevation of chief operating officer for international Greg Chubb to the Hong Kong headquarters after hiring the former Charter Hall retail executive in 2022.

After first entering Australia in 2019 with the acquisition of 100 Market Street in Sydney, sources confirmed to Mingtiandi that Link recently appointed another Charter Hall veteran, Julian Menegazzo, as head of investment for Australia, where the firm has now picked up interests in nine commercial assets for the REIT after venturing beyond its Hong Kong retail roots.

Menegazzo spent four years at Charter Hall as a member of the ASX-listed fund manager’s direct investment team and previously served more than 13 years in various roles at Sydney-based AMP Capital. Menegazzo’s hiring was first reported by PERE.

Hometown Pep Talk

Despite posting year-on-year revenue and net property income growth of 6.4 percent and 5.8 percent in the six months to the end of September, Link REIT was unable to offset widening fair value declines on the trust’s investment properties.

The trust logged an attributable net loss of HK$3.7 billion ($474 million) during the period, increasing 9.2 percent from a year-earlier shortfall, while reporting revenue and net property income of HK$7.2 billion and HK$5.4 billion.

The REIT’s Hong Kong assets, which accounted for 74.1 percent of the HK$237 billion portfolio value as of 30 September, registered revenue and net property income growth of 2.2 percent and 2.4 percent year-on-year, with retail occupancy remaining relatively flat at 97.8 percent.

Link hosted a Wednesday luncheon at the trust’s Temple Mall in Kowloon for 300 guests from more than 100 Link tenants as a show of support and gratitude amid what the firm termed a challenging retail environment.

“The retail sector in Hong Kong continues to face challenges with negative year-on-year growth for the last 10 months,” Hongchoy said. “While our focus on non-discretionary retail and our operational strength in asset management provide us with some resilience, we are mindful of the strain on our tenants and the need to support them during this time.”