What could become the world’s largest REIT IPO was finally approved this week, clearing the way for the Hong Kong Housing Authority to float it’s $3 billion retail offering. Wednesday’s court judgment put an eight-month long legal challenge to rest after an elderly public housing tenant petitioned to block the REIT from going forward.

The so-called Link REIT consists of roughly 10 million sq. ft. of Hong Kong retail space plus 79,000 parking spaces. The Hong Kong Housing Authority owns the entire portfolio. It’s believed that proceeds from the REIT—which has sparked huge demand for shares—will help cut the Housing Authority’s budget deficit.

Back in late November, people lined up outside a Hong Kong bank branch to sign up for shares of the REIT. Hong Kong retail investors can buy shares at a 3% discount to the final price, and that will give them a higher dividend yield. Global investment firms have also poured a fortune into the REIT. American International Group (AIG) invested $573 million, for an 18.8% stake. The REIT's appeal derives from the scarcity of land in Hong Kong, a city known for its densely packed shopping districts and heavy automobile traffic. Link controls 13.7% of the entire inventory of commercial parking spaces in Hong Kong. The average monthly rent at a Hong Kong shopping mall is the equivalent of roughly $2,367, according to the Hong Kong Housing Authority. What's more, Hong Kong property prices are finally rebounding after a six-year slump, which was exacerbated by the 2003 outbreak of severe acute respiratory syndrome (SARS). But the Hong Kong economy is expected to expand by 7.5% for 2004, which would be double the rate in 2003.