06 Jun 2018

Achieving Sustainable Growth

Link Asset Management Limited (“Link Asset Management”), manager of Link Real Estate Investment Trust (“Link”; Hong Kong stock code: 823), today announced the audited consolidated final results of Link for the financial year ended 31 March 2018. Total revenue grew by 8.3% to HK$10,023 million and net property income rose 9.6% year-on-year to HK$7,663 million. On a like-for-like basis excluding all properties divested and acquired during the periods analysed, revenue and net property income increased by 9.4% and 10.7% year-on-year. The Board approved a final distribution per unit of HK128.28 cents, which, together with the interim distribution per unit of HK121.50 cents, gives a total distribution per unit of HK249.78 cents for the year, an increase of 9.4% over the previous year.

Nicholas Allen, Chairman of the Board of Link Asset Management, said, “The year under review was a good year for the markets we operate in, highlighted by a healthy appetite for domestic consumption that was supported by robust growth in both Hong Kong’s GDP and household income. The overall retail market has shown promising signs of recovery. We have already started benefitting from the improvement in retailer sentiment, introducing over 80 new brands into our shopping centres and seeing several current tenants expand their businesses to other properties in our portfolio. Tenant sales growth is strong and continues to increase.”

George Hongchoy, Chief Executive Officer of Link Asset Management, said, “During the year we continued to improve the quality of our portfolio by enhancing our existing properties and acquiring high performing quality assets. We completed 14 asset enhancement projects, and worked with our market operator partners to upgrade 12 fresh markets. We have also diversified our portfolio with the acquisition of Metropolitan Plaza in Guangzhou, and divested 17 properties for a total of HK$23 billion, representing an aggregate premium of 52% over the appraised value as at September 2017.”

The record 14 asset enhancement projects completed during the year posted ROI ranging from 15.2% to 40.4%. While some upgrades involved simple refurbishments, enhancement of T Town and TKO Market involved major overhaul. The enhancement of Temple Mall South is the continuation of the enhancement work of Temple Mall North, completing the full upgrade of the shopping centre.

Set to become an iconic destination for exciting urban entertainment in a prime area, T.O.P This is Our Place, the retail podium of 700 Nathan Road in Mong Kok, is scheduled for launch in June 2018 and will feature F&B, lifestyle and fashion and beauty brands which are popular among youngsters. The tower portion has opened for operation in late 2017, receiving strong interests from medical clinics, beauty and co-working business centres.

Since the completion of acquisition of Metropolitan Plaza in May 2017, we have strengthened the trade mix and introduced new tenants and improved occupancy rate. As we benefitted from the second leasing cycle adjustments, EC Mall’s performance has exceeded our expectations, proving our expertise in investing in and managing regional shopping centres in Mainland China. Link Square 1 & 2 continued to deliver stable and satisfactory results.

The Quayside, our joint venture commercial development with Nan Fung Development Ltd in Kowloon East, will be completed in early 2019. We have confirmed J.P. Morgan as anchor tenant, with commitment to take up about 30% of the office space. We are now in the process of recruiting other tenants who are looking for large office space for consolidation or expansion purposes.

We used some of the proceeds from divestments to buy back 64.5 million units during the year under review at an average price of HK$67.43 per unit.

Our annual energy consumption was reduced by 4.3% year-on-year, contributing to a cumulative 31.3% reduction in Hong Kong since 2010, thus marking the achievement of our 20/30 vision 2 years ahead of schedule. We have furthered our care for the community through Link Together Initiatives, which has earmarked HK$47 million for community projects since 2013.

Financial Highlights for the Year Ended 31 March 2018.pdf 
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