01 Jun 2020

Link focuses on agility and resilience through the pandemic and beyond

Link Asset Management Limited, (Link) the manager of Link Real Estate Investment Trust, (Link REIT, stock code: 823) has announced results for year ended 31 March 2020.

Nicholas Allen, Chairman, said:

“In a challenging year, Link’s business has demonstrated resilience as we focus our portfolio on providing a welcoming, safe and healthy environment to fulfil the everyday needs of local communities. Despite considerable external uncertainties, we will stay focused on our strengths, whilst remaining agile and resilient to meet the challenges ahead.”

George Hongchoy, Chief Executive Officer, said:

“Sustainable growth comes from our unitholders, employees, tenants, shoppers, service contractors and other stakeholders thriving together. We have worked hard, facing this challenging environment together and will continue to do so. ‘Business as Mutual’ is our motto as we pursue the strategic goals of Vision 2025.”


Despite the impact of uncertainty created by the current economic environment, Link’s portfolio remains resilient given the largely non-discretionary nature of its trade mix. Lease negotiations have been noticeably slower this year and Link’s priority is to maintain a steady occupancy level. Barring a significant economic deterioration, Link expects its Hong Kong retail income to remain steady in the current financial year while its Mainland retail portfolio is expected to continue to see positive rental reversions. A strong balance sheet will help Link weather the economic downturn and volatility.

Financial highlights


HK$ (m)


HK$ (m)

% change

Total distributable amount*



 + 4.2

Full-year DPU**

287.19 cents

271.17 cents

+ 5.9




+ 5.6

Net property income***



+ 6.3




NAV per unit



- 13.3

Portfolio valuation



- 11.6

* after adjustments and a discretionary distribution of $291 million (2019: $53 million)

** comprising an interim DPU of 141.47 cents (2019: 130.62 cents) and a final DPU of 145.72 cents (2019: 140.55 cents). The final DPU includes a discretionary distribution of 7.07 cents (2H of 2018/2019: 2.51 cents)

*** percentage change is on like-for-like basis, excluding any properties acquired, divested and/or newly operational during the periods under analysis


The 2019/2020 financial year has seen a unique combination of geopolitical, economic and public health challenges, from social incidents in Hong Kong, to US-China trade tensions and the COVID-19 pandemic, all exerting significant pressure on the economies of Hong Kong and Mainland China.

Link has focused on supporting its stakeholders where possible, partnering with them to navigate challenges. It believes valuable public resources should be directed at those Hong Kong companies and their employees with the most pressing needs. Consequently, Link has decided not to make use of the Hong Kong Special Administrative Region Government’s Employer Subsidy Scheme, instead choosing to support employees with its own resources. Link has no plans to reduce staff salaries or lay-off any full-time employees.

In addition, echoing the Government’s Anti-epidemic Support Scheme for the property management sector, Link has decided to top-up the subsidies for outsourced frontline property management workers serving its Hong Kong portfolio (including cleaning and security workers, as well as fitters), as the Government scheme may not benefit all the contracted workers to the full extent.

In mid-May, Link announced the expansion of its Summer Young Talent Programme to nurture the children of its employees and property management service contractors. Earlier this year, Link also established a $300 million support scheme for its Hong Kong tenants to alleviate operating pressures related to the COVID-19 pandemic.

Hong Kong portfolio

Link has been working hand-in-hand with tenants through the challenging trading environment, refining lease structures to enable short-term lease extensions of certain expiring leases and establishing the Support Scheme mentioned above for tenants in sectors hardest hit by social unrest since the second half of 2019 and subsequent COVID-19 pandemic.

On a like-for-like basis, total retail revenue increased 7%. As of 31 March 2020, the occupancy rate for the portfolio in Hong Kong remained stable at 96.5%. As lease negotiations suffered from weak sentiment, the overall portfolio reversion rate, (excluding short-term leases under one year) slowed to 12.6% during the year with an increased number of renewal leases at negative reversion rates. Average monthly unit rent improved mildly by 3.4% year-on-year to $70.3 per square foot (psf) as at 31 March 2020. The rent-to-sales ratio was steady at 14.7%.

Tenant performance has slowed during the year, particularly after the COVID-19 outbreak. Overall tenants’ retail gross sales psf dropped by 1.7%. Testament to the predominance of non-discretionary activities in Link’s asset portfolio, amongst different trade categories, “Supermarket and foodstuff” tenants grew by 8.3% in gross sales psf, while “Food & Beverage” and “General retail” tenants recorded 3.4% and 6.8% decreases in gross sales psf respectively

Car park rental revenue grew 4.2% on a like-for-like basis, with income per space per month of $2,827 for the year. The average valuation per space was $561,000 as at 31 March 2020. A six-month parking discount has been offered to school bus operators to mitigate the impact of school suspensions.

The Quayside, Link’s flagship office property continued to attract demand, with the office and retail portions around 80% and 72% committed respectively.

Mainland China portfolio

During the year, taking into account the two properties newly acquired in 2019, the Mainland portfolio contributed total revenue of $1,448 million and net property income of $1,118 million, representing a 41.1% and 38.5% year-on-year increase, respectively. The average retail occupancy remained at a healthy level of 97.8%, while retail reversion performed well at 29.6%. The newly-acquired CentralWalk in Shenzhen Futian and Beijing Jingtong Roosevelt Plaza in Beijing Tongzhou delivered reversions of over 40% during the year. The COVID-19 outbreak forced many tenants to close or scale back their businesses due to social distancing measures. Link has offered relief measures to the affected tenants. It has been encouraging to see tenant businesses returning since mid-March 2020.

Link’s office property in Shanghai, Link Square, was comparatively less affected during the year. Office occupancy stood at a steady level of 97.4% as at 31 March 2020 and the office reversion rate was 7.1%.

Enhancement and Acquisition

During the year, seven asset enhancement projects, including Tsz Wan Shan Shopping Centre and TKO Spot, were completed in Hong Kong. As Link’s first enhancement project in Mainland China, CentralWalk is expected to commence enhancement works in the third quarter of 2020.

Subsequent to the end of the financial year, the acquisition of 100 Market Street in Sydney was completed in April 2020. Link will continue to be disciplined in selecting the right properties that provide long-term growth potential and contribute to a quality growth trajectory. The Company will remain focused on properties in Hong Kong and tier-1 cities in Mainland China and their surrounding river delta areas, and will also explore gateway cities in other developed markets, specifically Australia, Singapore, Japan and the UK.

Strengthening Management Team

During the year, Link refocused its organisational structure to align management practices across regions and facilitate business growth. This included the establishment of a group and regional centre structure, comprising Hong Kong, Mainland China and Australia, to support the portfolio’s increasingly diverse composition.

Capital Management

In June 2019, Link announced its plan to buy back up to 60 million units as part of the programme to return capital to its Unitholders. Link’s execution of the buyback programme depends on market conditions, unit price, trading volume and other regulatory considerations. During the year, Link bought back approximately 52 million units at an average unit price of $81.7 using $4.2 billion. In the coming financial year, Link will consider further unit buybacks subject to market conditions and other regulatory requirements.

Following the last divestment completed in March 2019, Link has budgeted for a discretionary distribution of about 14 cents per unit per year for three years starting from the financial year ended 31 March 2020. This is to make up for distribution per unit loss arising from the divestment to the extent the shortfall is not replaced by earnings from new acquisitions. This discretionary distribution, along with the announced buyback, is funded by the divestment premium of $2.8 billion achieved. Therefore, a discretionary distribution of $146 million or 7.07 cents per unit for 2H 2019/2020 will be included in the final distribution.

Link has announced the resumption of its distribution reinvestment plan. This allows unitholders to increase its investment in Link while allowing Link to shore up additional equity.

The announcement on Link REIT’s annual results has been posted on the HKEXnews website and is accessible via the following hyperlink:



Financial Highlights for the Year Ended 31 March 2020 

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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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