Gaw Capital – Building a Green Future

Hong Kong’s local community malls play an important role in the lives of residents. Their convenient locations minimise transport complexity and they stock items that people rely on to live no matter what the economic conditions are.

In 2017, Gaw Capital led two consortiums to acquire ‘People’s Place’ – a retail portfolio covering 29 different property types, ranging from old markets, malls to community spaces across Hong Kong – with financing underwritten by UOB.

The vision was to revive these local malls and to create a space catered to the changing needs of the community while increasing the value of the real estate investment.

Given its scale and complexity, the project became one of the largest real estate syndication loans in Asia, with a total deal size of HK$35 billion over two en bloc phases. As a result, the People’s Place portfolio has now been transformed into hip and modern retail spaces, with a current combined asset price of HK$47.5 billion.

In 2019, Gaw Capital made a successful overseas acquisition for DUO Tower and DUO Galleria in Singapore. The green loan project was one of the largest green syndicated loans provided by UOB at that time, and Gaw Capital became one of the first Asian fund managers to use green loans. The success of the deal opened doors to other real estate projects with Gaw Capital that required green financing.

With comprehensive solutions tailored to clients’ needs, UOB’s “One Bank” approach connects businesses to growth opportunities in the region, and beyond.

About this series

Building Asia is a collection of business stories on CNA that examines the financial forces driving Asia’s position as an economic powerhouse.

Gaw Capital – Building a green future was first aired on 19 September 2022 under the Building Asia with UOB series. It looks at how UOB partnered Gaw Capital in one of the biggest loan syndication projects in Hong Kong SAR, with the ambition to rejuvenate ‘People’s Place’, a retail portfolio comprising old markets, malls and community spaces.

Transcript

Kenneth Gaw (Managing Principal and President, Gaw Capital Partners):

People’s Place community malls – all of them are located in the public housing estates in Hong Kong.

A very big part of Hong Kong’s population live in these public housing estates.

When we first bought these assets, we thought that we want to really revive these aging communities. But not any plain old gentrification where you throw out the old, (and) you bring in the new.

Christine Ip (Chief Executive Officer, Greater China, UOB):

This was really a very huge and complex transaction. There’s a lot of due diligence and it’s one of the biggest financial transactions in Asia during this period of time, and also one of UOB’s biggest financing syndication projects.

Kenneth Gaw:

Obviously, the most important was the acquisition loan, where over two transactions we bought four and a half billion US dollars’ worth of assets.

Christine Ip:

I can share a little secret. In the first batch, the final round there were six competitors. Actually, all are my clients. It made me, from all angles, understand very clearly, what is the purpose.

Kenneth Gaw:

You know, a lot of people these days talk about ESG. This project also lets us focus on the social part of ESG, to make an impact on the everyday life of people.

Our relationship with UOB also led us to our first green loan in Asia, which is when we acquired the DUO Tower and Galleria building.

Christine Ip:

At UOB, we developed our green financing index and also our credit underwriting framework and we had to explain it to the Gaw team because they were so new to it and not many companies had kickstarted in that area.

But we were very grateful to see Gaw Capital coming on board and eventually we sealed the deal together.

Kenneth Gaw:

UOB is really our long-term financing partner… actually, maybe you don't even know, Christine… we started from the US.

Christine Ip:

I know, Hollywood, yes.

Kenneth Gaw:

Exactly, so our first relationship started in the US. And over time we moved back to Asia, across many markets.

Christine Ip:

I see there are still many more opportunities as they continue to grow. And they are leading the way. They can help us to help other clients make the world a better place to live.

Kenneth Gaw:

What is really valuable about this relationship is, every time we go to a new market, every time we have a new concept, UOB is always there to support us.