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HONG KONG-The securities regulator in Hong Kong has required the territory’s second REIT, Prosperity, to disclose details of any shareholder who builds a stake of 5% or larger. Executives of the Prosperity Real Estate Investment Trust, which comprises seven properties transferred from the holdings of conglomerate Cheung Kong Holdings, said in a statement that they were being “required” by the Securities and Futures Commission to lower the notification threshold to 5% from 10% previously enforced.

Prosperity’s initial public offering, which will raise up to US$247 million, started this week and will end Thursday. It is only the second REIT to list in Hong Kong after the Link Real Estate Investment Trust, which comprises 180 retail properties, including shopping malls and parking lots, previously owned by the Housing Authority, Hong Kong’s public housing provider.

The Link REIT’s IPO proved controversial after it emerged that a UK hedge fund, the Children’s Investment Fund, which has about US$3 billion in assets under management, had accumulated an 18% stake in the trust on the open market. REIT regulations required the Link to disclose any shareholding of 10% or more, and so no report was made on the hedge fund’s stake until it had already reached 18%.

The manager of Prosperity REIT, ARA Asset Management (Prosperity) Ltd., said it would publish on its website all notifications it receives from shareholders.

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