HNA’s S’pore REIT partner seeks to reduce ties

SINGAPORE: HNA Group Co’s partner in an overseas property trust is exploring ways to scale back its ties with the embattled Chinese conglomerate, people with knowledge of the matter said.

AEP Investment Management Pte is weighing options for reducing HNA Group’s involvement in the planned Singapore initial public offering of HNA Commercial REIT, which was going to be backed by about S$1bil (RM3.14bil) of properties from the two partners, according to the people.

All possibilities are under consideration, including lowering the stake HNA Group would take in the trust and the company that manages it, the people said, asking not to be identified because the information is private.

AEP has begun reaching out to other potential partners to gauge their interest in taking a role backing the property trust, the people said. The Singapore-based company, which started preparations for the listing last year before bringing in HNA Group, is also considering whether to reduce the trust’s reliance on real estate from the Chinese firm, the people said.

HNA Group was slated to initially contribute one property to the REIT, while AEP was going to provide four assets, according to a June exchange filing.

The HNA Commercial REIT offering will be postponed as AEP works out its future relationship with its Chinese partner, according to the people. For now, AEP intends to keep some level of involvement with HNA Group, the people said. No final decisions have been made, and it’s possible AEP will decide not to make any changes to the deal structure, the people said.

“HNA’s cooperation with AEP is normal,” the Chinese conglomerate said in an emailed statement. “The information in this story isn’t in line with the actual situation.” — Bloomberg

Singapore , HNA