10 Jun 2015

Enhancing Growth through Expanded Business Model

 

Key Achievements

 

2014
July / December

Disposal of nine non-core properties for HK$2,956 million

September

Acquisition of Lions Rise Mall for HK$1,380 million

December

Became a constituent stock of the Hang Seng Index

Completed HK$477 million repositioning of H.A.N.D.S, our flagship shopping centre in Tuen Mun

2015

January Expanded investment mandate to include property development
Acquisition of commercial development land for HK$5,860 million via joint venture

March

Announced first acquisition in Mainland China – Beijing EC Mall for RMB2,500 million

 

Financial Highlights for the Year Ended 31 March 2015

 

Total revenue HK$7,723 million ↑ 7.9%
Net property income HK$5,669 million ↑ 9.0 %
Full-year distribution per unit (Note) HK 182.84 cents ↑ 10.3 %
Average monthly unit rent per square foot HK$ 45.4 ↑ 7.8 %
Occupancy rate 94.8 %
Composite reversion rate (on average 3-year lease) 22.0 %
Tenants’ gross sales per square foot  ↑ 6.0 %
Net property income margin 73.4 %
Valuation HK$ 138,383 million ↑ 25.9 %
Net asset value per unit  HK$ 51.53 ↑ 23.6 %
Gearing ratio 11.9 %
Credit ratings A/Stable (S&P) / A2/Stable (Moody’s)
Available liquidity HK$6.44 billion

Note: Includes discretionary distribution of HK5.56 cents relating to the transaction costs incurred for the acquisition of investment property during the year.

 

 

The Board of Directors (the “Board”) of The Link Management Limited (“The Link Management”), as manager of The Link Real Estate Investment Trust (“The Link”; Hong Kong stock code: 823), today announced the audited consolidated final results of The Link for the financial year ended 31 March 2015. Total revenue grew by 7.9% to HK$7,723 million and net property income rose 9.0% year-on-year to HK$5,669 million. The Board approved a final distribution per unit of HK93.28 cents, which, together with the interim distribution per unit of HK89.56 cents (including a discretionary distribution of HK5.56 cents), gives a total distribution per unit of HK182.84 cents for the year, an increase of 10.3% over the previous year.
 
Nicholas Sallnow-Smith, Chairman of the Board of The Link Management, said, “Apart from maintaining steady growth of revenue and net property income for the ninth year, we took significant strategic steps during this past financial year. Since the assets injected at IPO operate within a similar risk environment, the broadening of our investment mandate to cover assets outside Hong Kong and development activities can help diversify such risk. It will also provide growth drivers of a different type to our legacy assets. As we make changes to our asset mix, our objective remains to generate steadily growing returns to unitholders, through the continuous improvement of our services and enhancement of our assets.”
 
George Hongchoy, Chief Executive Officer of The Link Management, said, “Over the years, our battery of growth drivers has evolved and expanded to include asset disposal, property development and property re-development. These are a natural extension of our core strengths, which encompass asset management, enhancement and acquisition. Our expanded set of growth drivers can now create value along the entire property life cycle, and enable us to build a productive and quality portfolio.”
 
“Since our IPO, we have been working to enhance the resilience of our business to deliver strong and sustainable growth. In the year ahead, we expect our Hong Kong portfolio located in sub-urban and residential districts catering for daily necessities to benefit from stable growth of domestic consumption. Looking forward, with the expanded business model and our strong capital structure, we are well positioned to build on our success and capture multiple growth opportunities in the future.”
 
During the year under review, four asset enhancement projects were completed, namely Hoi Fu Shopping Centre, Mei Lam Commercial Centre, Un Chau Shopping Centre and H.A.N.D.S. Apart from refurbishing the built environment at H.A.N.D.S, we carefully re-arranged the layout and retail mix to bring about a vibrant shopping centre and delightful customer experience. To date, we have invested over $4,069 million to enhance 39 projects. Continuing this strategy, we have an approved pipeline of HK$2,477 million for a further 16 other asset enhancement projects over the next five years.
 
Our successful joint venture bid for a plot of land for commercial development located at the heart of the HKSAR Government’s strategic “Energizing Kowloon East” plan represents our first venture into the office sector, allowing us to further diversify our business.
 
The newly acquired Lions Rise Mall, coupled with our two nearby properties, Wong Tai Sin Plaza and Lung Cheung Plaza, creates a shopping cluster with synergistic effect that allows us to serve a wider range of customers and create value for the local community. The acquisition of EC Mall in Beijing, a five-year-old quality shopping centre strategically located and adjacent to good transportation and network connections, marks our first step towards entering into a new geographical market.
 
The Link’s business value is determined by both our financial achievements and our non-financial contributions. We have implemented strategies that conserve our resources, ensure that we are a responsible employer, and contribute towards building thriving communities – all of which lead to delivering sustainable business return.
 
The annual results presentation file can be downloaded here.
 
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