BHG Retail REIT is the first retail REIT sponsored by an established PRC home-grown retail property operator, Beijing Hualian Department Store Co., Ltd.
Established in May 1998, the Sponsor is a listed company on the Shenzhen Stock Exchange (stock code: 000882). The Sponsor is one of the first companies to be engaged in retail property management in China whose focus is mainly on the ownership and management of community retail properties. These properties are positioned as one-stop family-oriented destinations for the community in its locality, with shopping, dining, recreational and entertainment facilities to cater to an extensive variety of communal needs.
The Sponsor is part of the BHG Group, a leading integrated retail group in China:
The BHG Group, which includes, inter alia, Beijing Hualian Group, the Sponsor and Beijing Hualian Hypermarket Co., Ltd. is involved in four main businesses:
- Management of retail properties;
- Operation of supermarkets/hypermarkets;
- Operation of SKP Beijing, a luxury department store located in Beijing's Central Business District; and
- Retail distributorships which include internationally renowned brands such as COSTA Coffee and Clarks.
Other than the Sponsor which is listed on the Shenzhen Stock Exchange, BHG Hypermarket is another listed entity in the BHG Group, which focuses primarily on the operations of supermarkets and hypermarkets. Listed on the Shanghai Stock Exchange since 29 November 2001, Beijing Hualian Hypermarket Co., Ltd trades under the stock symbol "600361".
Beijing Hualian Group Investment Holdings Co. Ltd is the majority shareholder of the Sponsor and Beijing Hualian Hypermarket Co., Ltd with 29.71% and 29.17% interest respectively as at 28 February 2017.
Right of First Refusal Properties
Under voluntary right of first refusal agreements ("ROFR"), 15 properties may potentially be offered to BHG Retail REIT as future pipeline assets. Of these 15 ROFR properties, 11 are held by the Sponsor. Three ROFR properties, namely Tongchengjie, Libao, and Changying are held by a private fund, managed by a fund manager 50% owned by Beijing Hualian Group Investment Holding Co., Ltd.. One ROFR property, Anzhen Mall, is held by Beijing Hualian Group Investment Holding Co., Ltd. jointly with other third parties, and the consent of such third parties is required for Anzhen Mall to be offered to BHG Retail REIT.
If these 15 properties are acquired, the resulting enlarged portfolio GFA of approximately 1,336,000 sqm will be about five times of BHG Retail REIT's IPO Portfolio, and will increase the REIT's presence to 13 cities in China.