Link REIT income up 21% in fiscal H1
The Link Real Estate Investment Trust, the largest local-listed property trust by market capitalization, said on Wednesday its distributable income for the first half of its fiscal year rose 21 percent.
Distributable income in the six months ended September 30 rose to HK$1.42 billion from HK$1.17 billion a year earlier because of rising rental income, the company said in a filing to the Hong Kong Stock Exchange. The company also said it would seek more acquisitions in the city’s retail market.
Revenue rose 10.1 percent to HK$2.89 billion from HK$2.62 billion. Link REIT declared a first-half distribution per unit of HK$0.6311, up from HK$0.5286 last year.
The city’s buoyant local retail market enabled the property operator to charge higher rents this year, according to the statement.
Average monthly rent reached HK$34.2 per square foot in the stated period, up 4.3 percent from HK$32.8 for the same period in 2010. Occupancy and retention rates both saw improvement to stand at 92.1 percent and 79.3 percent respectively in the first six months.
Although economic uncertainty has lashed market sentiment, George Hongchoy, chief executive officer of The Link Management Ltd – manager of the Link REIT – said that “as a majority of the Link REIT’s tenants are providing daily necessity services including supermarkets and restaurants, the nature of these businesses will prove to be defensive amid market fluctuations.”
There is also further room to improve the existing portfolio and Link REIT will continue to look for good purchasing opportunities in a bid to achieve higher rental returns, Hongchoy told at a media briefing on Wednesday.
The Link REIT, whose portfolio comprises shopping malls and parking facilities in the city, bought the commercial portion of Nan Fung Plaza from the Nan Fung group for HK$1,170 million in June of this year – its first acquisition in the private property market since its initial public offering in 2005.
Alvin Chung, associate director of Prudential Brokerage, said more acquisition will follow suit after the Nan Fung Plaza purchase, which has already brought in valuation gains to the group in just a few months.
“The Link REIT has over HK$4 billion cash in hand. Further purchases are inevitable, particularly when the leasing business is still posting tempting returns,” said Chung.
litao@chinadailyhk.com
China Daily
(HK Edition 11/10/2011 page2)
http://www.chinadaily.com.cn/hkedition/2011-11/10/content_14068135.htm