09 Nov 2011
Highlights for the six months ended 30 September 2011:
Revenue - HK$2,887 million ↑ 10.1%
Net property income - HK$2,041 million ↑ 15.6%
Distribution to Unitholders - HK$1,420 million ↑ 21.2%
Distribution per unit - HK63.11 cents ↑ 19.4%
Distribution payout ratio - 100 %
GROWING DEMAND FROM TENANTS
Average monthly unit rent (Note) - HK$34.2 psf ↑ 4.3%
Occupancy rate - ↑ to 92.1%
Retention rate - ↑ to 79.3%
Net property income margin - ↑ to 70.7%
STRONG FINANCIAL POSITION
Net asset value per unit (Note) - HK$26.14 ↑ 6.1%
Portfolio valuation - HK$72,096 million
Gearing ratio - 16.7%
Credit ratings - A (S&P) / A2 (Moody’s)
Available liquidity - HK$4.45 billion
Note : These comparisons are based on 31 March 2011 figures while others are based on period ended 30 September 2010 figures.
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 unaudited consolidated results of The Link REIT for the six months ended 30 September 2011, and reported a Total Distributable Income (“TDI”) of HK$1,420 million (six months ended 30 Sept 2010: HK$1,172 million). The Link Management’s current policy is to distribute to Unitholders 100% of The Link REIT’s TDI. Distribution Per Unit of HK 63.11 cents showed a year-on-year increase of 19.4%, while Net Asset Value rose 6.1% half-on-half to HK$26.14 per unit.
The solid revenue growth was driven by higher rental rates, improving occupancy rates, increasing contributions from properties with completed asset enhancement initiatives (“AEIs”) and better trade mix. Average monthly unit rent rose 4.3% from HK$32.8 per square feet (“psf”) as at 31 March 2011 to HK$34.2 psf as at 30 September 2011, while overall occupancy rate improved to 92.1%. Retention rate increased to 79.3%. Car park revenue rose 11.6% year-on-year to HK$569 million. Gearing ratio was 16.7% as at 30 September 2011. Moody’s Investors Service and Standard and Poor’s affirmed The Link REIT’s credit rating at A2 and A with stable outlook respectively.
Mr Nicholas Sallnow-Smith, Chairman of the Board of The Link Management, said, “Since our initial public offering (“IPO”) almost six years ago, we have been actively managing our diversified portfolio of properties to enhance the shopping environment for our tenants and to consolidate our core strength in providing daily necessities for the communities we serve. The acquisition of the commercial portion of Nan Fung Plaza in July 2011 was the first acquisition since our IPO, marking our debut in retail properties within private residential developments. With all our other properties situated close to public housing estates, the acquisition opens up additional expansion opportunities for future growth. We will pursue this expansion strategy prudently when we can find value enhancement opportunities in the local retail property sector.”
Mr George Hongchoy, Chief Executive Officer of The Link Management, said, “The six months under review was a period of continued growth for The Link REIT, benefiting from the strong performance of the portfolio and continuous efforts in cost management. The improved performance reflects growing demand for shop space from retailers, as more of them remained in or joined our portfolio to capture the expanding business opportunities. The successful execution of our AEI strategy has not only generated satisfactory investment return, but also delivered sustainable growth in the long term as the upgraded properties provide an enhanced shopping environment to attract new tenants. These new tenants widen the appeal to shoppers, generate higher footfall and create a better business environment for other tenants.”
“To enhance customer service, we have organised in June 2011 the first ‘The Link Award Ceremony’, recognising the contributions of frontline staff with reference to scores rated by mystery shoppers of an independent consultant,” added Mr Hongchoy.
During the period under review, asset enhancement work at Choi Yuen Plaza was completed, offering good return on investment. Twenty-two AEI projects have been completed since The Link REIT’s IPO. Seven AEI projects with a total investment of approximately HK$750 million are currently underway. Another seven additional AEI projects are in various stages of obtaining statutory approvals.
In October 2011, the revitalisation of Tai Yuen Fresh Market project emerged as the winner in the Environmental Excellence category of the Asian CSR Awards 2011, organised by the Asian Institute of Management, for its marked impact upon human health, safety, environment and considerable enrichment of the local economy.
The Link REIT’s commitment to the community is highlighted by its support for the Statutory Minimum Wage Ordinance and its effort to reimburse contractors to pay for rest-days and meal-breaks for workers of service providers. This initiative has helped strengthen worker morale and labour relations.
The interim results presentation file and photographs of our properties can be downloaded at this address: