14 Nov 2018

Delivering Growth Embracing Innovation

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 2018. On a like-for-like basis, excluding any properties acquired, divested and/or newly operational (as applicable) during the periods under analysis, total revenue and net property income increased by 7.4% and 6.9% year-on-year, respectively. As reported, total revenue decreased by 0.4% to HK$4,930 million and net property income decreased by 0.2% to HK$3,759 million. The Board approved an interim distribution of HK 130.62 cents per unit, an increase of 7.5% over the same period last year. 

Nicholas Allen, Chairman of the Board of Link Asset Management, said, “Our financial discipline and strategic portfolio management has delivered strong returns for the first half of 2018/2019 with continuous growth in distribution per unit and, on a like-for-like basis, increases in revenue and net property income. This six-month period saw some notable events in our operating landscape, including the launch of the Hong Kong's Express Rail Link and the Hong Kong-Zhuhai-Macao Bridge creating increased connectivity between the city and the Greater Bay Area, the escalating trade war rhetoric between China and the US, and the anticipated interest rate hikes. Our culture of embracing innovation has positioned us well to deal with the opportunities and challenges presented by these changes.”

George Hongchoy, Chief Executive Officer of Link Asset Management, said, “Our organic portfolio continued to deliver sustainable growth during the year. Together with the inorganic growth drivers, Link is well-placed to sustain its long-term growth trajectory while keeping foundation of business fundamentally sound and resilient. Our transition to the asset management model, which is enabling us to better track asset performance, has yielded promising results and will strengthen the efficiency of our operations well into the future.”

During the period, four asset enhancement projects were completed, including Fu Shin Shopping Centre, Homantin Plaza, Sam Shing Commercial Centre and Wan Tsui Commercial Complex. Fu Shin Shopping Centre in Tai Po has both its shopping centre and market revamped, while the enhancement of Homantin Plaza has reinforced its community centre status in the prime residential district in Ho Man Tin.

Our three properties in Mainland China performed satisfactorily. The latest addition to the portfolio, Metropolitan Plaza, continues to be a growth engine with vast potential to be unlocked. EC Mall’s reversion rate stayed at a satisfactory level and the new tenants have been warmly welcomed by the local community. Since the majority of expiring office leases at Link Square 1 & 2 will fall into the second half of the financial year, and many of those spaces have been committed, we are confident that the property is on track to deliver a double-digit reversion for the full year.

This year, 700 Nathan Road was officially opened. Over 90% of the retail podium – “T.O.P – This is Our Place” – has been committed and many first-in-Hong Kong restaurants are well-received by shoppers. About 73% of the tower portion has been committed or under advanced negotiation. 

Topped out in mid-2018, The Quayside – our joint venture project with Nan Fung Development Limited in Kowloon East – will be completed in early 2019. Nearly 60% of office space has been pre-leased, including our anchor tenant, J.P. Morgan. For the remaining space, we will continue to target multinational corporations with consolidation and relocation needs.

We are currently reviewing our portfolio and seeking opportunities to enhance our portfolio quality and sustain our long-term growth trajectory through active portfolio management. We are considering acquisitions and/or divestments that can drive sustainable return in the long-run.

To stay up to date on global best practices, we have made commitment to contribute to the UN Sustainable Development Goals, which provides many opportunities to make our portfolio and the cities where we operate in resilient and future-proof.
 

Financial Highlights for the Six Months Ended 30 September 2018

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