10 Nov 2021

Solid Base Further Lifted by Inorganic Growth

Link Asset Management Limited, (Link) the manager of Link Real Estate Investment Trust, (Link REIT, stock code: 823) announced its interim results for the six months ended 30 September 2021. 

Nicholas Allen, Chairman, said:

“As a midway review of our medium-term strategy – Vision 2025 – we are delighted Link continues to seize value-enhancing opportunities according to our blueprint. Our first venture into logistics, through two immediately yielding assets in partnership with a veteran in the buoyant Greater Bay Area, enables us to enter a new segment in a prudent manner. Our acquisitions of interests in three premium retail assets in Australia’s Sydney and two institutional grade car park, car service centres and godown buildings in Hong Kong will further strengthen our portfolio’s productivity. At this juncture, we remain very well-positioned to further explore investment opportunities in our targeted markets to deliver sustainable growth.”

George Hongchoy, Chief Executive Officer, said:

“With COVID-19 situation largely contained in the markets where we operate, we are pleased to see business rebound for our tenants. Occupancy of our Hong Kong retail portfolio reached a record high of 97.5% and tenant gross sales had returned to pre-COVID levels in 2019. Although we are still facing challenges driven by post-pandemic uncertainties, we will continue to work alongside our stakeholders, with our Business as Mutual mindset, to create a more prosperous and healthy community.”


Link REIT’s portfolio has demonstrated extraordinary resilience over the past 18 months when the operating environment was extremely difficult. This underlines the solid base of its business, which is further elevated by inorganic growth. Link REIT’s business has been steadily recovering from the pandemic’s adverse effects. Although recent rising coronavirus cases abroad have fuelled fears of a pandemic resurgence in winter, Link is cautiously optimistic about the group’s operating performance for the rest of the current financial year barring unforeseen circumstances.

Financial Highlights

Six months ended
30 Sep 2021
$ (m)

Six months ended
30 Sep 2020
$ (m)


Total distributable amount(1)




Interim DPU

159.59 cents

141.65 cents






Net property income








NAV per unit(2)




Valuation of investment properties(2)





  1. After adjustments and a discretionary capital distribution of $146 million (six months ended 30 September 2020: $144 million).
  2. These comparisons are based on figures as at 31 March 2021.


During the six months under review, the overall leasing sentiment has seen signs of recovery with relaxing social-distancing measures due to the improving COVID-19 situation and increasing vaccinated population. Link’s diverse portfolio across all regions has considerably benefitted:

  • Revenue and net property income recorded year-on-year growth of 10.4% and 8.8%, respectively
  • High occupancy and rental collections
    • Hong Kong retail and office: record high occupancy at 97.5% and 93.8%, respectively
    • Mainland China portfolio: overall rental collection remained healthy at 97%
  • Positive reversion rates
    • Hong Kong retail: average reversion rate edged up to 3.4%
    • Mainland China retail: encouraging reversion at 12.1%
  • Solid Financial Position: ample liquidity and strong credit profile
  • Steadily growing Distribution Per Unit (DPU) of 159.59 cents

During the period, Link continued to provide proactive support to its tenants to bolster their business recovery through marketing initiatives. Hence, higher marketing expenses were recorded during the period as Link organised a wide range of events to aid tenants’ sales.

On the other hand, Link is devoted to constructing a balanced portfolio by pursuing “Core”, “Core-plus”, “Value-added” and “Opportunistic” investments for inorganic growth. Link remains committed to its Vision 2025 and will continue to grow its portfolio with a diversified and enhanced portfolio mix.

With the announcement of its ambitious Net Zero 2035 strategy, Link has further defined two interim targets to chart its progress towards achieving the goal, including reductions in electricity consumption and carbon intensity (using 2018/2019 baseline) by 2025. Link reaffirms its commitment to transition into a sustainable company.

Hong Kong portfolio

With the pent-up demand for local spending as travel restrictions persisted, Link’s Hong Kong operations have largely resumed to normal during the review period. Retail revenue and car park revenue improved by 6.2% and 12.2% year-on-year, respectively.

As at 30 September 2021, occupancy rate for the retail portfolio further improved to 97.5%, reaching record high. The overall portfolio reversion rate edged up to 3.4%. Average monthly unit rent remained stable at $62.4 per square foot (psf). Tenants demonstrated resilience and rental collection rate remained high at 98%.

During the period under review, an 8.9% year-on-year growth in tenant retail gross sales psf was recorded and brought it close to pre-COVID level in 2019. Overall rent-to-sales ratio has further normalised to 13% with improvements in F&B and general retail segments. With the second tranche of the Consumption Voucher Scheme already disbursed since 1 October 2021, leasing sentiment and overall tenant sales should continue to improve in the second half of 2021/2022.

With the resumption of business and leisure activities due to the lifting of COVID-19 restrictions, Link’s car park performance also saw an uptrend during the review period. Hourly car park rental revenue was up 39.1% year-on-year and recovered back to pre-COVID level. Together with the steady growth of monthly car park ticket sales, overall car park revenue grew 12.2% year-on-year.

Link’s office leasing progress has been encouraging. As of October 2021, the committed occupancy rate of The Quayside has reached 93.8%. Link targets to attract high-quality tenants seeking premium grade-A office space with prominent harbour views to take up its remaining vacant office space at the top floor of The Quayside.

Mainland China portfolio

The Mainland China portfolio delivered 15.6% and 13% year-on-year growth in total revenue and net property income, respectively, during the period under review. The increase in revenue was mainly attributable to new contributions from Happy Valley Shopping Mall in Guangzhou and the retail rental reversions achieved in the other assets. Overall rental collection remained healthy at 97%. The five shopping centres in Mainland China continued to deliver encouraging reversions averaging 12.1%, with the newly acquired Qibao Vanke Plaza achieving an outstanding reversion of 31.3%.

Office occupancy of its premium grade A office Link Square in Shanghai edged up to 96.7%, while reversion was at -12.1%. Link is currently upgrading its office lobby and common areas to ensure it continues to provide a secured and stable income stream in the long run.

Overseas portfolio

During the period under review, the two office buildings, 100 Market Street in Australia and The Cabot in the United Kingdom, had provided full period of rental contribution. Total revenue and net property income of the two offices amounted to $245 million and $170 million, respectively. The office properties continue to be fully occupied by blue-chip tenants and the overall rental collection rate stayed healthy at 99% as of October 2021.

Asset Enhancement

During the period, Link completed the enhancements of Hing Wah Plaza and Tai Wo Plaza with an investment of $31 million and $55 million, and they delivered returns of 13.2% and 3.6%, respectively. Currently, three projects are underway, including Link CentralWalk in Shenzhen, and Tai Yuen Market and Lok Fu Market in Hong Kong, which will incur a total estimated investment of $405 million.

Going forward, Link targets to invest an aggregate of over $1 billion on asset enhancements on around 20 projects. There is currently no foreseeable impact of supply chain challenges to costs and materials for asset enhancement projects.


Acquisitions of 50% interest in Qibao Vanke Plaza in Shanghai and Happy Valley Shopping Mall in Guangzhou were completed in April 2021 and June 2021, respectively. Both assets provide upside on rental income as approximately 60% of Qibao Vanke Plaza’s leases (by rent) will expire by 2023/2024 and approximately 19% of Happy Valley Shopping Mall (by area) will undergo asset enhancement starting in 2022/2023.

Subsequent to the period ended and in October 2021, Link made its first venture into the logistics market by acquiring 75% interests in two recently-developed modern logistics assets in Dongguan and Foshan ─ highly sought-after hubs in Greater Bay Area ─ at RMB754 million. The properties were selected based on their strategic locations, full occupancies and quality tenant profiles. Link will co-own with an experienced partner who will also be the operation manager. With respective weighted average lease expiry of 3.5 and 4.4 years, the warehouses enjoy emerging leasing demands. This small prudent investment enables Link to enter a new segment at lower risk and serve diversification purpose. The logistics asset should be complementary to Link’s current portfolio and offers good growth potential given the rapid development of e-commerce.

On 7 November 2021, Link announced that it had agreed to purchase 50% interests in three premium retail properties in Australia’s Sydney, Queen Victoria Building, The Galeries and The Strand Arcade, for a total AUD538.2 million. The three properties are among the most productive retail assets in Australia with high occupancy and sticky tenants. It represented a unique and rare investment opportunity as Australian market in recent months showed that capital has been returning to retail assets given relatively attractive yields and returns. The assets are managed and will continue to be managed by Vicinity, Australia’s leading retail property group with AUD22 billion retail assets under management across 61 shopping centres in Australia.

On 10 November 2021, Link further announced its acquisition of two institutional grade car park/ car service centres and godown buildings in Chai Wan and Hung Hom in Hong Kong, which have a combined floor area of nearly 860,000 square feet and 977 parking spaces, for a total of $5,820 million. The two buildings are strategically located and should generate stable cashflows with annual rental step-up. Under a sale and re-leasing arrangement with an initial fixed term of five years and three optional three-year terms thereafter for each property, the leases will generate a stable stream of cashflows, with an annual rental increment of 4% structured within each of the leases. The lease is further secured as the tenant is an established and reputable car dealer of Mercedes-Benz in Hong Kong for over 60 years, Zung Fu Company Limited.

The acquisitions will strengthen Link’s investment portfolio, which will remain retail-focused, with a meaningful portion in other commercial assets such as car park, office and logistics.

Capital Management

Despite ongoing disruptions caused by the pandemic, Link has maintained a healthy leverage position with gearing ratio contained at 19.5% as of 30 September 2021.  Link has ample financial resources with $7.3 billion undrawn committed facilities and $2.1 billion cash and bank balances. Average borrowing cost for the period was further lowered to 2.3%.  

During the six months ended 30 September 2021, Link bought back 1.3 million units at an average unit price of approximately $65.2, utilising a total of $82.6 million. Further buyback will depend on multiple factors. With a solid financial position, Link continued to distribute 100% of its distributable income and remained committed to the discretionary distribution of 14 cents per unit per annum until 2021/2022.

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.


Financial Highlights for the Six Months Ended 30 September 2021

Download Interim Results Presentation

Download High Resolution Photo

– End –

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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