17 Jun 2021

Diversification Buoyed Resilient Portfolio

Link Asset Management Limited, (Link) the manager of Link Real Estate Investment Trust, (Link REIT, stock code: 823) has announced results for the year ended 31 March 2021.

Nicholas Allen, Chairman, said:

“I am pleased to report a year of positive results in the face of adversity in the global commercial property market. Although the global economy continues to grapple with the COVID-19 pandemic, we at Link have seized growth opportunities steadily over the past year and expanded our footprint in Mainland China, Sydney and London to further strengthen our diversified and resilient portfolio.”

George Hongchoy, Chief Executive Officer, said:

“The pandemic and the market challenges have highlighted the importance of sustainability to businesses. We have put this firmly on our radar for portfolio management and have made an ambitious pledge to achieve Net Zero carbon emission by 2035.  We are committed to establishing a greener footprint while maintaining the productivity of our portfolio.”


The considerable headwinds faced by Hong Kong’s economy are expected to keep Link’s Hong Kong portfolio under pressure. While uncertainty and turbulence will remain in the foreseeable future, income progression generated by the Mainland China and overseas segments have helped Link sustain a growth trajectory. Link will continue to seek growth through yield accretive acquisitions and active management of its portfolio.

Financial Highlights

$ (m)

$ (m)


Total distributable amount




Full-year DPU

289.99 cents

287.19 cents






Net property income








NAV per unit




Portfolio valuation





The 2020/2021 financial year has been uneasy amidst waves of COVID-19 pandemic, as businesses and daily lives were adversely affected by partial lockdowns and social distancing restrictions. In turn, Link continues to look for investment opportunities in Hong Kong, Mainland China and overseas, which aligns with Vision 2025 to grow a portfolio of resilience and sustainability. The acquisitions of two premium grade A offices – 100 Market Street in Sydney and The Cabot in London, were completed in April and August 2020 respectively, which strengthened and diversified the asset portfolio with stable and quality income, and is one of the major factors that lift the valuation of Link’s investment property portfolio by 3%.

The diversified portfolio, which spans across Hong Kong, Mainland China, Australia and the United Kingdom, has demonstrated its strong defensiveness and resilience with a high occupancy of over 95% as at the end of the financial year. The unwavering support to tenants via the $600 million Tenant Support Scheme and various marketing initiatives, coupled with the commencement of rental contribution from overseas office investments and the speedy economic rebound in Mainland China, enabled the group to achieve an increase in both revenue and net property income. Link continues to distribute 100% of its distributable income to unitholders. Since its IPO, Link has consistently delivered annual growth in DPU for unitholders.

With its prudent capital management and robust financial position, not only did Link maintain the “A” grade in credit ratings, it was also able to grasp investment opportunities under low interest rates. Following the end of the financial year, Link completed the acquisition of 50% interest in Shanghai Qibao Vanke Plaza on 2 April 2021, a prime retail destination with strategic location and excellent connectivity, and announced on 4 June 2021 the acquisition of Happy Valley Shopping Mall in Guangzhou, which marked Link’s sixth retail property investment in Mainland China and the third in the Greater Bay Area outside Hong Kong.

Hong Kong Portfolio

Focusing on non-discretionary retail that offers daily necessities and essential services to locals, Link’s Hong Kong portfolio demonstrated strong resilience and continued to deliver steady results amidst waves of COVID-19. In addition to the Tenant Support Scheme that was expanded to $600 million in August 2020, more promotion and marketing initiatives were conducted in the past year to support tenants’ business recovery.

As at 31 March 2021, the occupancy remained stable at 96.8% and the rental collection rate was high at 98%. Total retail revenue decreased by 4.5% year-on-year, as a result of property management fee waivers and rental concessions. Under weak market sentiment, lease negotiations continued to be challenging. The average retail reversion rate was negative at -1.8% during the year. Average monthly unit rent dropped by 3.4% year-on-year to $62.4 per square foot. Nonetheless, the rent-to-sales ratio stayed steady at 14.1% and over 400 new leases were introduced during the year.

Although Link maintained its non-discretionary nature with over 65% of rents contributed by food-related tenants, it was not immune to the severely dampened local consumption caused by stringent social distancing restrictions and partial lockdowns. Overall tenant retail gross sales fell 9.4%.

While car park performance was also affected by the partial lockdowns in early 2020/2021, car park revenue recorded only a small decline of 1.5% year-on-year, with income per space per month fell slightly by 1.8% to $2,776. Hourly parking demand recovered right after the relaxation of social distancing restrictions. The average valuation per space was approximately at $558,000 as at 31 March 2021.

The Quayside, Link’s flagship office property in Kowloon East, continued to allure high-quality tenants, with the office and retail podium around 76% occupied as at 31 March 2021. Particularly, one of the two floors previously vacated by a co-working operator was taken up by another operator in the second half of this financial year. The committed occupancy rate is at around 83% recently as there will be new tenants moving in.

Mainland China Portfolio

During the financial year, Link conducted its first asset enhancement project in Mainland China for Link CentralWalk in Shenzhen and offered COVID-19 related rental concessions to tenants, resulting in a 6.3% and 6.9% year-on-year decline in total revenue and net property income respectively. Its four shopping centres recorded an average reversion rate of 11.1%, with average retail occupancy dropped slightly to 96.3% as at 31 March 2021. Fuelled by the country’s speedy economic recovery, it introduced about 200 new leases and had a healthy overall rental collection of 98%. In addition, the tenant sales in April 2021 in the retail properties in Beijing and Guangzhou recovered to around 90% of the pre-COVID level.

Link Square, Link’s grade A office property in Shanghai, maintained a high occupancy of 95.8% as at 31 March 2021 against a surge of new office supply in the city, although its reversion fell to -8%. To stay competitive, major renovations will be implemented and followed by the commencement of a 10-year lease renewal of its anchor tenant in July 2022 after the renovations.

Overseas Portfolio

Link’s two office properties in 100 Market Street in Australia and The Cabot in the United Kingdom contributed a total of $371 million revenue and $270 million net property income since April 2020 and August 2020 respectively. With a long weighted average lease expiry and blue-chip tenants, both properties are highly defensive in nature. In the financial year, the rental collection rate stayed high at around 90%.


Three asset enhancement projects, including that of Kai Tin Shopping Centre, were completed in Hong Kong, involving a total capex of $345 million. They were estimated to achieve a high single-digit to low double-digit return of investments (ROI).

Currently, four projects are in the pipeline and will incur a total estimated capex of $434 million. Link CentralWalk, Link’s first major asset enhancement project in Mainland China, will have its enhancement works completed by late 2021 and a double-digit ROI is expected.

Net Zero Strategy and Use of Big Data

To underpin the commitment in sustainability and resource management, Link devised a Net Zero Roadmap, aiming at achieving net-zero carbon emission by 2035 through multiple means such as adopting renewable energy solutions, energy efficient measures and new technologies. In addition to monitoring the progress through a series of five-year interim targets, an Energy Management System (EMS) will be launched for the Hong Kong portfolio. Predictive data analytics will be deployed to optimise repair and maintenance of all electrical equipment.

Capital Management

Leveraging on the low interest rates around the world, Link proactively locked in low-cost financing for its strategic acquisitions during the record period and attained its all-time low average borrowing cost of total debit at 2.66%. Despite a total debt of $38.6 billion, the gearing ratio remained stably low at 18.4% as at 31 March 2021.

As a part of the unit buyback programme that Link announced in June 2019, 6 million units were bought back during the year at an average price of $63.11, totalling $378.7 million. The unit buyback will continue to be dependent on market conditions and regulatory considerations.

With ample liquidity and strong capital base, Link stayed committed to distributing 100% of its distributable income of the year to unitholders and continued to offer the discretionary distribution of 14 cents per unit per annum until 2021/2022.

Distribution reinvestment scheme is still in place for the final distribution of the year ended 31 March 2021, allowing eligible unitholders to increase their investment in Link.

The announcement on Link REIT’s annual results has been posted on the HKEXnews website and is accessible via the following hyperlink:


Note: All dollar amounts are in Hong Kong dollars unless specified otherwise.


Financial Highlights for the Year Ended 31 March 2021

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About Link

Link Real Estate Investment Trust (Hong Kong stock code: 823), managed by Link Asset Management Limited, is a leading retail-focused REIT in the world. Listed in 2005 as the first REIT in Hong Kong, Link has been 100% held by public and institutional investors and is a Hang Seng Index constituent stock. From its home in Hong Kong, Link manages a diversified portfolio including retail facilities, car parks and offices spanning Hong Kong, Beijing, Guangzhou, Shanghai, Shenzhen, London and Sydney. Link seeks to extend its portfolio growth trajectory and grasp expansion opportunities in different markets in pursuit of our medium-term target Vision 2025. For details, please visit https://www.linkreit.com/

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