05 Jun 2013

Driving Growth with Sustainability

Highlights for the year ended 31 March 2013
Growth Momentum Continues
- Total revenue HK$6,506 million ↑ 9.7%
- Net property income HK$4,616 million ↑ 10.3%
- Full-year distribution per unit (“DPU”) – 100% payout HK 146.46 cents ↑ 13.1%

Positive Operating Performance
- Average monthly unit rent per square foot    HK$38.4 ↑ 7.3%
- Occupancy rate  ↑ to 94.1%
- Reversion rate (on average 3-year lease)  24.6%
- Retention rate  82.7%
- Tenants’ gross sales   ↑ 9.6%
- Net property income margin  70.9%
- Electricity consumption savings    17 million kWh
- Valuation         HK$95,366 million ↑ 24.4%

Solid Financial Position
- Net asset value per unit         HK$35.68 ↑ 28.7%
- Gearing ratio  ↓to 13.6%
- Strong credit ratings A (S&P) / A2 (Moody’s)
- Available liquidity  HK$6.21 billion

The board of directors (“the Board”) of The Link Management Limited (“The Link Management”), as the manager of The Link Real Estate Investment Trust (“The Link REIT”; Hong Kong stock code: 823) today announced the audited consolidated final results of The Link REIT for the financial year ended 31 March 2013. Total revenue grew by 9.7% to HK$6,506 million and net property income (“NPI”) rose 10.3% year-on-year to HK$4,616 million. The Board approved a final distribution of HK75.38 cents per unit, which, together with the interim distribution per unit of HK71.08 cents, gives a total distribution per unit of HK146.46 cents for the year, an increase of 13.1% over last year.

Nicholas Sallnow-Smith, Chairman of the Board of The Link Management, said, “Successful companies create value for the community. If they do not, over time they will fail to provide sustainable returns for their shareholders. Across our business, we are focused on improving the shopping experience for communities around our centres and thereby generating returns for our Unitholders.  We assess our progress through many financial and operational measures and are pleased to report continued progress this year against many such benchmarks. Since IPO, we have recorded seven years of continuous improvement. With such a large portfolio, the opportunities to enhance our assets and the way that we run them are never exhausted. We always welcome feedback on how we are progressing.”

George Hongchoy, Chief Executive Officer of The Link Management, said, “Building on our solid foundation and focused business model, we delivered sustainable growth in revenue, distribution per unit and net asset value per unit, which increased by 9.7%, 13.1% and 28.7% respectively compared to the previous financial year. The compound average annualised total return to our unitholders, comprising aggregate distribution paid and unit price appreciation, reached 23.8% since our listing in 2005.

“In identifying asset enhancement projects, we have adopted a district approach which takes a macro view on individual districts to capitalise on potential projects, and have invested considerably in recent years in Tseung Kwan O district and Tuen Mun / Tin Shui Wai district, both of which enjoy rapidly growing population, rising household income and improvement of transport infrastructure.”

In the year under review, five asset enhancement projects were completed, of which two include market upgrade, and two are properties ranked outside of top 50 by valuation. Eight asset enhancement projects are now underway, and five projects pending statutory approvals. The second phase enhancement works for Chung Fu Plaza will be concluded mid this year, while Yau Oi Commercial Centre and On Ting Commercial Complex will become our flagship in the Tuen Mun district upon completion of asset enhancement works.

“To set a clear target for sustainability performance, we have embarked on a ‘20/20 Vision’ which aims to reduce our annual energy consumption by 20% from the 2010 level by 2020. This commitment follows industry best practice by establishing a clear target to assess how we minimise our operations’ impact on the environment,” said Mr Hongchoy.

“To further enhance property management service quality and professionalism, we have launched ‘The Link Executive Development Programme in Shopping Mall Management’ by partnering with Hong Kong Polytechnic University.

“To enhance staff’s sense of belonging, we have rolled out ‘Employee Unit Purchase Plan’ in July 2012, which essentially turns our employees into Unitholders by subsidising eligible staff to purchase units of The Link REIT in the open market.”

 

The annual results presentation file can be downloaded at this address:
 
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