11 Nov 2015

Growth Opportunities captured through Diversification

Financial Highlights for the Six Months Ended 30 September 2015

Total revenue                HK$ 4,185 million                          ↑ 9.3 %
Net property income             HK$ 3,096 million                         ↑ 11.2 %
Interim distribution per unit           HK 98.99  cents                           ↑ 10.5 %
Net property income margin                                            74.0 %

Valuation (1)                        HK$ 155,751 million                        ↑ 12.6 %
Net asset value per unit  (1)               HK$ 54.24                              ↑ 5.3 %
Gearing ratio                                                 16.9 %
Credit ratings                                  A/Stable (S&P) / A2/Stable (Moody’s)

Hong Kong Portfolio   
Average monthly unit rent per square foot (1)    HK$ 47.4                             ↑ 4.4 %
Occupancy rate                                                                                                                  95.1 %
Composite reversion rate (on average 3-year lease)                                                         23.6 %
Tenants’ gross sales per square foot                                                                                ↑ 6.0 %

Mainland China Portfolio (2)  
Occupancy rate                                                                                                                   100 %
Composite reversion rate (on average 3-year lease)                                                          33.7%

Note:  1. These comparisons are based on 31 March 2015 figures while others are based on period ended 30 September 2014 figures.
               2. Figures only represent operational data of Beijing EC Mall, and do not include Shanghai Corporate Avenue 1 & 2 as the acquisition was just completed in
               August 2015.
The Board of Directors (the “Board”) of Link Asset Management Limited (“Link Asset Management”), as manager of Link Real Estate Investment Trust (“Link”; Hong Kong stock code: 823), today announced the unaudited interim results of Link for the six months ended 30 September 2015. Total revenue grew by 9.3% to HK$ 4,185 million and net property income rose 11.2% to HK$ 3,096 million. The Board approved an interim distribution of HK 98.99 cents per unit, an increase of 10.5% over the same period last year.
Nicholas Sallnow-Smith, Chairman of the Board of Link Asset Management, said, “Our two new acquisitions, EC Mall in Beijing, and Corporate Avenue 1 & 2 in Shanghai, complement our expanded investment and development activities in Hong Kong, enabling us to take advantage of opportunities across a property’s life cycle and in different industry sectors. The asset enhancement programme continues to be the mainstay of our performance. As evidenced in our strong financial results, our services and properties are adding value through serving the communities of which our assets form a part.”
George Hongchoy, Chief Executive Officer of Link Asset Management, said, “As we cautiously diversify our portfolio to manage geographic and asset-class risk exposures, we are focusing on locations that will have long-term demand. Our expanded set of growth drivers and focused business strategy, coupled with our strong capital management, should allow us to capitalise on multiple growth opportunities in years to come.”
“While mass market retail properties are our focus, diversification into the office sector enhances overall quality of our portfolio to generate a better return. Hong Kong remains our priority, complemented by a prudent investment scope in Mainland China, where we seek to acquire properties in tier-one cities. Our allocation into office and Mainland will each not exceed 12.5% of our total portfolio value.”
During the period under review, we completed asset enhancement works at Tsing Yi Commercial Complex and Temple Mall North. The latter has undergone an extensive upgrade to capitalise on the enhanced connectivity and synergy of our property cluster in the Wong Tai Sin district.
Our Kowloon East commercial development remains on schedule. It will become a landmark building in the new CBD, offering expansive harbour views and targeting to achieve Platinum certification for both LEED and HK-BEAM as evidence of our environmental consciousness.
Acquired in April and August respectively, EC Mall and Corporate Avenue 1 & 2 have started to contribute revenue during the period under review. We have raised occupancy of EC Mall to 100% and achieved a composite reversion rate of 33.7%.
In October, as part of our disposal strategy to recycle capital, we accepted tenders for the disposal of five properties, achieving sale prices that exceed valuation as at 30 September 2015 by over 30%.
Link became a constituent stock of the Hang Seng Corporate Sustainability Index in September, underscoring our success in embedding corporate sustainability into our strategy and operations.
The interim results presentation file can be downloaded here.
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