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    HK Shopping Mall Fetches $2.4 Billion

    Hong Kong-listed conglomerate Swire Pacific is offloading one of its glitzy shopping malls to Singapore-based real estate company Mapletree Investments for 18.8 billion Hong Kong dollars ($2.42 billion). The sale of Festival Walk is expected to be completed August 18, according to a filing with the Hong Kong Stock Exchange on Friday.

    Mapletree's CEO Hiew Yoon Khong said, "What is especially attractive about this asset is that the rental income has increased consistently year on year since inception reflecting the quality of the mall. We are very confident that this trend will continue into the future."

    Mapletree Investments is a wholly-owned unit of Temasek Holdings, an investment company fully owned by the Singaporean government.

    Swire said the proceeds from the sale will be used for general working capital. It operates two other high-end shopping centers in Hong Kong, Pacific Place and Cityplaza, and plans to build five commercial complexes across China in places like Beijing, Shanghai, Guangzhou and Chengdu.

    Built jointly by Swire Properties and Beijing-backed CITIC Pacific in 1998, Festival Walk is one of the biggest shopping centers in Hong Kong. Convenient rail links to the border with Shenzhen have made it a popular destination for shoppers from the mainland.

    Hong Kong's commercial property market has soared in recent years, driven largely by the growing purchasing power of Chinese consumers.

    A June report by the CB Richard Ellis Group showed the previous British colony has become the world’s second most expensive city in terms of retail rental rates.

    In 2006, Swire Properties bought out the other 50% interest of the 1.2 million-square-foot commercial complex from its partner for 6.2 billion Hong Kong dollars ($797 million).

    One of Hong Kong's oldest British transnational trading companies, Swire Pacific's business operations span across property, aviation, beverages and trading.

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