Link Reit looks to the mainland as Hong Kong rent growth cools

By Lam Ka-sing and Zheng Yangpeng / | June 7, 2019 12:04 PM SGT
The Link Real Estate Investment Trust (Link Reit), Asia's largest real estate investment trust, announced on Monday modest growth in property income for 2018 and said it plans to acquire more commercial properties in China's top tier cities, adding to its holdings in Beijing, Shanghai, Shenzhen and Guangzhou.
"There is no lack of projects [in first-tier cities] under discussion. But the firm remains very prudent and selective, looking only at properties that can add value to our asset portfolio and generate immediate income," said Gary Fok, chief asset management officer of the Link Reit.
"First-tier cities are big enough. For the time being they remain our absolute priority for their robust local economies, huge commercial property stock, transparent market, and a ready talent pool to manage properties."
The Link Reit said property income rose 0.3 per cent to HK$7.69 billion (US$981.44 million) for the financial year ended March 31. Revenue edged up 0.1 per cent to HK$10.04 billion.
The company declared a 9.6 per cent increase in final distribution per unit to HK$1.4055, raising the total distribution per unit to HK$2.7117.
The Link Reit owns 126 properties, including shopping centres and car parks, in Hong Kong and five in the mainland.
The Link Reit's Hong Kong shares rose 2.2 per cent to close at HK$95.85 on Monday, following the midday results' release.
George Hongchoy, chief executive of the Link Reit, said at a media briefing after the lunch break, that he was not too worried about the impact of the US-China trade war on the economic outlook for the mainland.
"Regarding the impact of the trade war on the economy, one of the strategies [of China] is to boost domestic consumption," he said. "We hope this can benefit the sales of [retail] tenants of our shopping centres."
He said the Link Reit had been satisfied with the performance of mainland properties it had bought in recent years.
George Hongchoy, chief executive of the Link Reit. Photo: K.Y. Cheng