When anti-government protesters rampaged through the Festival Walk in Kowloon on November 12, they smashed glass panels and some of the 200-odd stores in the sprawling mall. They also inadvertently dented one of Singapore’s biggest investments in the region.
Acquired by Temasek Holdings’ wholly owned Mapletree Investments unit in 2011 for HK$18.8 billion, the retail and office property is now part of the assets in Mapletree North Asia Commercial Trust after a reorganisation in 2013. The real estate investment trust tumbled to a 10-month low in Singapore after the news.
The “extensive damage” reflects how the situation has taken a turn for the worst as violence escalates after more than five months of anti-government protests, deepening the slump in retail sales and crashing property values. It is also turning Hong Kong into an investment landmine for investors as the Kowloon district became the latest fiery battleground.
“What is happening in Hong Kong at the moment is that we haven’t seen the end of the tunnel yet,” said Louis Tse Ming-kwong, managing director of VC Asset Management in Hong Kong. “We now, inter alia, have to take the state of the local economy into our consideration and that it’s a bit of a challenge. Investors have too many variables at play to evaluate now to get a satisfactory return, not just for us but for others like Temasek.”
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Like other global money managers, Temasek has raised its stake in the region in recent years to latch on to China’s economic boom. About 10 per cent of Temasek’s S$313 billion of assets is denominated in the local dollar, the third largest by currency exposure, according to its 2019 annual review.
The Festival Walk, which will shut down through December 1, is not the first casualty in Temasek’s pool of investments in the region. Radical protesters have vandalised retail stores with links to mainland business groups, while bank branches have become frequent targets in running battles with police.
Source: South China Morning Post