Baker & McKenzie Advises Fortune REIT on its HKD3.8 Billion Term Loan and Revolving Credit Facilities

Baker & McKenzie recently advised ARA Asset Management (Fortune) Limited, as manager of Fortune Real Estate Investment Trust (“Fortune REIT”), on a five-year term loan and revolving credit facilities of up to an aggregate principal amount of HKD3.8 billion, comprising a HKD2,830 million term loan facility and a HKD970 million revolving credit facility granted to Fortune REIT.  Part of the new facilities was used to refinance existing facilities of HKD3.1 billion due in October 2013, and the balance will be used for financing the corporate funding requirements of Fortune REIT, including any acquisition opportunities and other yield enhancing asset enhancement initiatives.

The Baker & McKenzie team was co-led by Milton Cheng, partner and head of the Firm’s REIT practice in Hong Kong/China; Stephen Eno, partner and head of the Firm’s Asia-Pacific Banking & Finance practice; and, involved Simon Leung, special counsel in the banking & finance group and Debbie Cheung, partner in the real estate group in Hong Kong.

Australia and New Zealand Banking Group Limited, DBS Bank Ltd. and Standard Chartered Bank (Hong Kong) Limited acted as the mandated co-ordinating arrangers and bookrunners.

Fortune REIT holds a portfolio of fourteen retail properties in Hong Kong, spread across Kowloon and the New Territories, comprising approximately 2.0 million square feet of retail space and 1,660 car parking lots.  They house tenants from diverse trade sectors such as supermarkets, food and beverage outlets, banks, real estate agencies and education providers.  Fortune REIT was listed on the Singapore Exchange Securities Trading Limited and The Stock Exchange of Hong Kong Limited on 12 August 2003 and 20 April 2010 respectively.

Baker & McKenzie’s Asia-Pacific REIT Group has been at the forefront of ground-breaking REIT transactions in Asia.  The team has been involved in almost all of the significant transactions to date involving REITs listed or with assets in Hong Kong –  including Hui Xian REIT’s recent IPO, being the first RMB denominated REIT to be listed in Hong Kong; Fortune REIT’s dual primary listing in Hong Kong by way of introduction; Fortune REIT’s IPO and follow-on acquisitions; Prosperity REIT’s IPO and follow-on acquisitions; Champion REIT’s IPO and follow-on acquisitions; GZI REIT’s IPO; Sunlight REIT’s IPO; RREEF China Commercial Trust’s IPO; Regal REIT’s follow-on acquisitions; and, The Link REIT’s medium-term note programme and more recently its first property acquisition in Hong Kong.

The team has also advised on numerous other significant REIT-related deals in the Asia-Pacific – Prospect REIT Investment Corporation on its merger with Japan Rental Housing Investments Inc., Tower REIT’s IPO, Fubon No. 1 REIT’s and Fubon No. 2 REIT’s IPOs, MacarthurCook Industrial REIT’s IPO, Tokyo Growth J-REIT’s IPO, ARA Asset Management’s IPO, YTL Corporation’s acquisition of interests in Macquarie Prime REIT (now known as Starhill Global REIT) and Starhill Global REIT’s first acquisition in Australia.