Highlights (for the six months ended 30 September 2010):
- Net Property Income: HK$1,765 million, up 9.2%
- Total Distributable Income: HK$1,172 million, up 11.1%
- Distribution Per Unit: HK52.86 cents, up 9.3%
- Net Asset Value Per Unit: HK$18.73, up 7.3%[1]
  
StrongConsistent Earnings Growth Continues
- Revenue: HK$2,621 million, up 7.5%
- Net Property Income: HK$1,765 million, up 9.2%
- Profit Before Tax, change in fair values of investment properties and transactions with Unitholders: HK$1,415 million, up 8.4%
- Total Distributable Income: HK$1,172 million, up 11.1%
- Distribution Per Unit: HK 52.86 cents, up 9.3%
- Distribution Payout Ratio: 100%
 
Another Period of Strong Performance of the Portfolio
- Overall Average Monthly Unit Rent: HK$31.7 per square foot, up 6.7%
- Overall Composite Reversion Rate: 22.7%, up 0.7%
- Overall Retention Rate: 74.6%, up 5.1%
- Overall Occupancy Rate: 90.9%, up 0.3%
- Revenue Contribution (excluding car parks) from completed asset enhancement projects: 27.7%, up 7.0%
- Net Property Income Margin: 67.3%, up 1.0%
- Car Park Income Per Space Per Month: HK$1,067, up 2.4%
 
Persistent Strong Financial Position
- Total Assets as at 30 September 2010 at HK$62,567 million, up 6.2%[1]
- Net Asset Value Per Unit: HK$18.73, up 7.3%[1]
- Gearing Ratioas at 30 September 2010: 17.1%
- Average Outstanding Life of Debt Facilities as at 30 September 2010: 3.9 years
- Upgraded Credit Rating: Moody's Investors Services upgraded from A3 to A2 with stable outlook
 
Note [1]: These comparisons are based on 31 March 2010 figures while others are based on 30 September 2009 figures.

  

The board of directorsof 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 unaudited consolidated results of The Link REIT for the six months ended 30 September 2010, and reported a total distributable income of HK$1,172 million (YoY: HK$1,055 million). The Link Management’s current policy is to distribute to Unitholders 100% of The Link REIT’s total distributable income. While the Distribution Per Unit of HK 52.86 cents showed a YoY increase of 9.3%, the Net Asset Value surged 7.3% half-on-half to HK$18.73 per unit.

 

The asset enhancement initiatives (“AEI”) programme is on good progress and works for the flagship centre Lok Fu Plaza are expected to be completed by end 2010. Revenue contribution (excluding car parks) from completed AEI projects continues to serve as a key driver of growth in the period under review, rising 7.0% YoY to 27.7%. Overall average unit rent per month (excluding self use office) rose 6.7% YoY to HK$31.7 per square foot while overall occupancy rate went up to 90.9%. On the car parks, the monthly income per space rose by 2.4% YoY to HK$1,067. The trends of continued growth in average rent, strong rental reversion, and stable occupancy are clearly observable. Under such persistent strong financial circumstances, Moody’s Investors Services upgraded The Link REIT’s ratings from A3 to A2 with stable outlook whereas Standard and Poor’s rating was A grade with stable outlook.

 

Mr Nicholas Sallnow-Smith, Chairman of the Board of The Link Management, said, “It truly is promising to see all the positive results for the six months under review. Reaching out to some 40% of the local population, we enjoy increasing our contribution to the community we serve from our newly completed AEI centres, including but not limited to our flagship Lok Fu Plaza.”

 

“At The Link Management, our vision is to be a world class real estate investor and manager. Our mission is to build relationship with our stakeholders through providing value and quality service, partnering with local communities, and delivering sustainable growth. To achieve all these, effective and balanced corporate governance with the board of directors providing strategic leadership to the management of The Link REIT is of vital importance,” added Mr Sallnow-Smith.

 

Mr George Hongchoy, Chief Executive Officer of The Link Management, said, “The key performance drivers are all in good standing. While overall occupancy rate stays steady at over 90% and contribution from car parks remains stable, both total distributable income and net asset value per unit record sturdy growths. As a key player in the community, we have stepped up our relationship with stakeholders including tenants, community groups, suppliers and professional bodies. We have also put in place optimal mode of property management for different asset types with a view to further improving the quality of our management.”

 

“We are paying serious attention to corporate sustainability and playing a more active role in community engagement. The recently re-launched Eco Terrace at Lok Fu Plaza is well received by the community and its summer program has won an Asian CSR Award. The management maintains regular contacts with public stakeholders who agreed that mutual understanding has been enhanced as a result. On green initiatives, more public open space, green roofs, recycled building materials, etc. will be incorporated in our AEI projects. By implementing various measures in daily operations and upgrading to more energy efficient systems, we are helping to reduce carbon footprint,” added Mr Hongchoy.

 

During the period under review, the AEI works of Siu Sai Wan were completed while two projects, namely Stanley and Leung King, were added to the programme. The district strategy review for our properties has identified more AEI opportunities beyond the top 50 and we currently have more than 20 new AEI projects under planning with an estimated total CAPEX of over HK$1.5 billion.

 

The Link Management continues to support the community and has set aside about 8% of leasable area for leasing to non-governmental and charitable organizations at concessionary rates.

 

During the period under review, cohesion among the senior management had been strengthened while communication with the staff reinforced. The Link Staff Academy was launched with a view to enhancing staff training efforts. 

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