09 Nov 2020

Navigating the Uncertainty with Agility and Resilience

Link Asset Management Limited, (Link) the manager of Link Real Estate Investment Trust, (Link REIT, stock code: 823) has announced interim results for the six months ended 30 September 2020.

Nicholas Allen, Chairman, said:

“In the six-month period marked by pandemic-driven uncertainty, we have worked hard to ensure our properties remain healthy and safe places for communities to meet their daily needs. We have focused on maintaining occupancy and strengthening the productivity of our portfolio. As we continue to navigate the uncertainty, we remain steadfast in adhering to our core focus that has made us successful over the last 15 years – to deliver sustainable growth in a resilient, non-discretionary retail focused portfolio. Furthermore, our Business as Mutual will be a key enabler and differentiator for how we emerge from the pandemic stronger and attuned to the needs of our communities.”

George Hongchoy, Chief Executive Officer, said:

“Link is seeing its 15th anniversary of its IPO this month. Over these years, we have built a strong foundation in our portfolio, and have turned our single market portfolio into a diversified one spanning multiple asset types and countries, which has enhanced our ability to deliver sustainable returns to unitholders. This, together with our ability to think forward and nurture constructive, collaborative relationships with our stakeholders and across our value chain, I am confident we can respond quickly and effectively to any current and future challenges.”


While uncertainty and turbulence will remain in the foreseeable future, relaxation of some pandemic control measures and the much-anticipated development of a vaccine has led to signs of gradual economic recovery, particularly in Mainland China. While Link is cautiously optimistic of the progress made so far, it remains wary of further development of the COVID-19 pandemic and a potential resumption of social distancing restrictions. Link will continue to work closely with the tenants and business partners, to ensure and maintain a high level of alignment and coordination of efforts to overcome the current health crisis.

Financial Highlights

Six months ended
30 Sep 2020
$ ('M)

Six months ended
30 Sep 2019
$ ('M)

% change
Total distributable amount (1) 2,921


Interim DPU 141.65 cents

141.47 cents

Revenue 5,233


Net property income 4,037


(Loss)/Profit (4,325)


NAV per unit (2) $74.60


Portfolio valuation (2) 195,112




  1. After adjustments and a discretionary capital distribution of $144 million (six months ended 30 September 2019: $145 million)
  2. These comparisons are based on figures as at 31 March 2020


The six-month period under review was marked by waves of uncertainty and turmoil emanating from the COVID-19 pandemic, which, coupled with strained China-US relations, posed serious challenges to Link’s operating environments. Link continues to demonstrate resilience against this backdrop:

  • Resilient Performance: high occupancy and rental collection rate

  • Stable Distribution Per Unit (DPU): maintained 100% payout

  • Business as Mutual: supporting our tenants with Tenant Support Scheme

  • Solid Financial Position: ample liquidity and strong credit profile

  • Vision 2025: prudent portfolio growth with quality acquisitions

Reflecting its resilient nature, Link’s portfolio has not seen a material change in rental receivable write-offs, and rental collection rates have stayed high across all geographies, despite a difficult operating environment.

New inorganic drivers from overseas acquisitions, cost savings and unit buyback have also contributed to a stable DPU.

In Hong Kong, Link was among the first businesses to announce a scheme to help alleviate tenants’ financial burden, earmarking $80 million in February 2020, which has since been increased twice to $600 million at the onset of the third wave of COVID-19 in August 2020. The funds have been allocated through a battery of targeted relief measures, including rental reduction. Link has also stepped up cleaning and sanitisation measures across the portfolio and added a range of routine hygiene controls at high-risk properties.

Following a detailed review, Link has reaffirmed its commitment to Vision 2025 and growth strategy of diversifying and improving the portfolio mix to strengthen its portfolio resilience and benefit from the varied economic cycles of different markets. Link remains well-positioned to capitalise on attractive investment opportunities.

Hong Kong portfolio

Given its focus on non-discretionary trades, Link’s portfolio continued to display relatively high resilience despite market volatility and unprecedented public health challenges. With the financial impact from property management fee waivers and rental concessions, total retail revenue decreased by 5.5% year-on-year.

As at 30 September 2020, occupancy rate for the retail portfolio remained stable at 96.1% and overall portfolio reversion rate was at -2.6%. Average monthly unit rent decreased to $68.7 per square foot (psf) as at 30 September 2020 from $70.3 psf as at 31 March 2020.

Overall tenants’ retail gross sales psf dropped by 11.6%. Benefitting from more cooking at home, “Supermarket and Foodstuff” tenants recorded a 13.9% growth in gross sales psf, while “Food and Beverage” and “General Retail” tenants dropped by 24.5% and 20.7% in gross sales psf respectively, due to stringent social distancing measures and weaker retail sentiment. The rent-to-sales ratio slightly increased to 15.7%.

During the period, total car park revenue recorded a 5.7% drop, while car park income per space per month dropped by 6.3% to $2,745. Link offered discounts to school bus patrons to help alleviate the pressures brought on by lockdowns and school closures.

Despite the slowdown in leasing momentum, Link’s joint development project with Nan Fung – The Quayside – secured additional commitments in both the office tower and retail podium, with occupancy rates of office and retail space reaching 80% and 76% respectively.

Mainland China portfolio

During the period under review, owing to lower occupancy and rental concessions following COVID-19, income loss associated with the asset enhancement of CentralWalk in Shenzhen and Renminbi depreciation, Mainland portfolio contributed total revenue of $661 million and net property income of $506 million, representing 9.7% and 12.5% year-on-year decrease respectively. Retail reversion remained positive at 8.1%, yet the average retail occupancy dropped to 94.7%. Occupancy of Link’s office property in Shanghai, Link Square, stood at 94.8% as at 30 September 2020 and office reversion rate was -7.7% due to a surge in new office supply in Shanghai.

Enhancement and Acquisition

Two asset enhancement projects – Lok Fu Place and Choi Yuen Plaza, were completed in Hong Kong during the period, bringing the number of completed projects since listing to 87. In August 2020, Link’s first asset enhancement project in Mainland China started at CentralWalk to unleash the property’s potential as a “must-go” destination in Futian, Shenzhen.

During the period under review, Link acquired two premium grade A offices – 100 Market Street in Sydney in April 2020 and The Cabot in London in August 2020. Both are immediately income accretive and have long leases to high quality tenants. Revenue and net property income of the two assets amounted to $121 million and $99 million respectively. To improve the long-term resilience and productivity of the portfolio, Link will continue explore opportunities in Hong Kong, Mainland China tier-1 cities and their surrounding delta areas as well as gateway cities in other developed markets, specifically Australia, Japan, Singapore and the UK. 

Capital Management

During the six months ended 30 September 2020, Link bought back 6 million units at an average unit price of approximately $63.11 using a total of $0.4 billion, as part of the unit buyback programme that Link announced in June 2019. The unit buyback will continue to be dependent on market conditions and regulatory considerations.

With solid financial position and ample liquidity, Link continued to distribute 100% of its distributable income during the six months under review and remained committed to the discretionary distribution of 14 cents per unit for annual distribution up till 2021/2022. Delivering sustainable returns for unitholders remained one of Link’s priorities despite the fragile global economy.

The announcement on Link REIT’s interim 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.


Key Financials for the Six Months Ended 30 September 2020

Download Interim Results Presentation

Download High Resolution Photo

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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