04 Jun 2014
Highlights for the year ended 31 March 2014
Growth Momentum Continues
Total revenue HK$7,155 million ↑ 10.0%
Net property income HK$5,202 million ↑ 12.7%
Full-year distribution per unit (“DPU”) – 100% payout HK165.74 cents ↑ 13.2%
Positive Operating Performance
Average monthly unit rent per square foot HK$42.1 ↑ 9.6%
Occupancy rate ↑ to 94.4%
Reversion rate (on average 3-year lease) 25.7%
Tenants’ gross sales ↑ 7.9%
Net property income margin 72.7%
Electricity consumption savings 20 million kWh
Valuation HK$109,899 million ↑ 15.2%
Solid Financial Position
Net asset value per unit HK$41.69 ↑ 16.8%
Gearing ratio ↓ to 11.0%
Strong credit ratings A (S&P) / A2 (Moody’s)
Available liquidity HK$7.1 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 2014. Total revenue grew by 10.0% to HK$7,155 million and net property income (“NPI”) rose 12.7% year-on-year to HK$5,202 million. The Board approved a final distribution per unit of HK85.52 cents, which, together with the interim distribution per unit of HK80.22 cents, gives a total distribution per unit of HK165.74 cents for the year, an increase of 13.2% over last year.
Nicholas Sallnow-Smith, Chairman of the Board of The Link Management, said, "Our business is intertwined with the communities of which our shopping centres form a part. As we continue to improve our properties, we are pleased to find more and more tenants are interested in establishing a presence in our shopping centres. We have also been promoting community life through unique events and our community engagement programme. The recent changes to our investment mandate have opened up significant long-term opportunities to grow our business while providing new ways for our staff to grow and develop their skills and experience. In addition, these changes have allowed us to apply our expertise in building upon the relationships we have with Hong Kong retailers, many of whom are already expanding into Southern China."
George Hongchoy, Chief Executive Officer of The Link Management, said, "During the year under review, we have recorded an eighth consecutive year of growth. Through a number of improvements made across the business, we are moving closer to our vision of serving and improving the lives of those around us. As we enhance the appeal of our centres, our tenants’ sales continued to improve. Having achieved our ‘20/20 vision’ of reducing total annual energy consumption by 20% of 2010 levels by 2020, we have set a new target, which seeks to attain a 30% reduction by the same year."
"Through our signature charity and community engagement project − The Link Together Initiatives – we committed a total of HK$10.4 million to 10 community programmes that focus on the well-being of youth and the elderly in the communities we serve. Our fresh market upgrades are creating a whole new experience for shoppers and tenants, rejuvenating Hong Kong’s unique food culture. As a result of a wide range of initiatives aiming to create value for the community as a whole, we have maintained our presence in the FTSE4Good Index for the second year in a row."
During the year under review, five asset enhancement projects were completed at Chung Fu Plaza, Sheung Tak Plaza, Lok Fu Market, Choi Wan Commercial Complex and Sha Kok Commercial Centre. The upgrade of Chung Fu Plaza has reinforced its position as a regional centre serving an extended catchment population in the Tin Shui Wai district. The improvements at Sheung Tak Plaza have strengthened its competitiveness in the Tseung Kwan O district to capitalise on the large supply of new residential flats in the area in the next few years.
In Hong Kong, The Link REIT continued to seek for investment opportunities in the mid-market segment to leverage its expertise in asset management. With its investment mandate recently extended to allow investments outside of Hong Kong, The Link REIT’s initial investment focus will be mid-tier community shopping centres in the Pearl River Delta. To support the change, it has entered into a non-binding memorandum of understanding with China Vanke Co., Ltd., a leading developer in Mainland China, to explore collaboration opportunities.
The Link REIT regularly reviews its portfolio to assess opportunities to recycle capital and create value for unitholders. In May 2014, tenders were accepted for four of its properties. In each case, the sale price exceeded the asset’s appraised value.
The annual results presentation file can be downloaded here.