06 Jun 2012

Partnering with Tenants and Delivering Sustainable Growth

Tenant Sustainability
- Retail gross sales of tenants  ↑ 10.7 %
- Retention rate  ↑ to 79.2 %
- Percentage of retail shops leased to small tenants, quality independent operators  60 %
- Conducted nine The Link Tenant Academy seminars and workshops with over 1,200 attendees

Consistent Growth
- Total revenue HK$5,932 million  ↑ 10.8 %
- Net property income HK$4,185 million  ↑ 14.8 %
- Full year distribution per unit  HK129.52 cents  ↑ 17.3 %
- Payout ratio  100 %

Positive Operating Performance
- Average monthly unit rent (per square foot)  HK$35.8  ↑ 9.1 %
- Overall occupancy rate  ↑ to 92.9 %
- Reversion rate (on average 3-year lease)  21.7 %
- Net property income margin  ↑ to 70.5 %
- Electricity consumption savings    16 million kWh
- Payment to the Government (profits tax, rent and rates)  HK$651 million  ↑ 10.1 %

Solid Financial Position
- Net asset value per unit  HK$27.73  ↑ 12.6 %
- Gearing ratio  ↑ to 15.9 %
- Effective interest rate  ↓to 3.35 %
- Strong credit ratings  A(S&P) /A2 (Moody’s)
- Available liquidity  HK$4.67 billion
- No major refinancing in the next financial year 

Note: Comparisons are based on 31 March 2011 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 audited consolidated final results of The Link REIT for the financial year ended 31 March 2012.

The Link REIT has delivered another year of consistent growth and solid financial performance with its resilient and diverse portfolio.  Total revenue grew by 10.8% to HK$5,932 million and net property income climbed 14.8% year-on-year to HK$4,185 million.  The Board approved a final distribution of HK66.41 cents per unit, together with the interim distribution per unit of HK63.11 cents, gives a total distribution per unit of HK129.52 cents for the year, representing an increase of 17.3% over last year.

Mr Nicholas Sallnow-Smith, Chairman of the Board of The Link Management, said, “With strong retail spending in Hong Kong and a much improved shopping environment in our portfolio, our tenants have reported an encouraging year-on-year growth of 10.7% in retail gross sales.  Despite external uncertainties, local economic stability gives us reason for optimism over the retail market.  We have every confidence that our tenants will benefit from the general well-being of the economy to support their retail sales growth in the near term.”

Mr George Hongchoy, Chief Executive Officer of The Link Management, said, “This is the sixth consecutive year we have recorded growth in DPU since our IPO in 2005.  This year’s result is supported by positive operating performance, solid financial position, and making two yield accretive acquisitions as an additional growth driver.” 

“Tenants are at the core of our business.  The Link REIT has focused its asset management strategy on tenant sustainability.   We enhanced the trading environment for our tenants through effective leasing and tenant re-positioning, active communication, and extensive marketing events.  This has resulted in the strong growth in retail gross sales of our tenants.  Tenant satisfaction is also reflected by higher occupancy and retention rates while shoppers are being offered with broader choices.” 

“Small tenants, quality independent operators, account for 60% of our total retail shops in our portfolio.  They are vital to our success as they provide wider trade mix as well as individuality to our shopping centres.  I am delighted to see that many of the second generations of these shop operators are taking up their family businesses and many of them have even expanded their businesses within our portfolio.”

“Looking ahead, we will use our three-pronged business model - asset management, asset enhancement, and asset acquisition, to provide a better shopping environment for shoppers, to further advance our position as a leading property manager and investor, to enhance the partnership with our tenants and to deliver satisfactory return to our unitholders.”

The annual results presentation file can be downloaded at this address:
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