Hong Kong’s Link REIT Boosts Revenue 8%, Trims Loss Amid Global Expansion

Hong Kong’s Link REIT posted revenue growth of 8 percent year-on-year to HK$11.6 billion ($1.5 billion) for the 12 months ended in March, with Asia’s largest listed trust boosting payouts despite reporting a loss for the second straight year.

The total distributable amount for the financial year rose 6.8 percent to HK$6.4 billion as full-year distribution per unit grew 5.4 percent to 305.67 Hong Kong cents, the REIT’s manager said Wednesday in a release.

“We are pleased to present our full-year results for March 2022 and to report continued growth in distribution to our unitholders for the 17th year in a row,” said Nicholas Allen, chairman of Link Asset Management. “Our portfolio has continued to demonstrate resilience and we are seeing a healthy rebound in business activity despite lingering pandemic-related disruptions.”

Link REIT’s HKEX-listed units saw a brief spike on Wednesday to HK$71.90, their highest trading price since last November.

Loss Shrinks, Retail Occupancy Rises

The trust posted a loss of HK$1.6 billion after transactions with unitholders, narrowing from a HK$2.6 billion loss a year earlier, as it eked out HK$17 million in comprehensive income after a prior-year comprehensive loss of HK$433 million.

Link said occupancy in the core Hong Kong retail portfolio rose from 96.8 percent to 97.7 percent as of 31 March, with more than 660 new leases signed.

Net property income climbed 6.5 percent in the financial year to HK$8.8 billion, while the valuation of investment properties leapt 6.9 percent to HK$212.8 billion.

“We always actively manage our portfolio and assets and the pandemic has not hindered our approach,” said Link chief executive George Hongchoy. “From April last year to May 2022, approximately $15 billion worth of real estate investment was completed and another $11 billion of investment was announced, consisting of 17 quality assets spanning across different geographies and asset classes.”

Stretching Beyond Hong Kong

Hongchoy’s above-mentioned deals included some key overseas transactions, as Link continues to expand beyond the Hong Kong retail sphere.

In February, the trust announced plans to invest A$596 million ($428.2 million) for a 49.9 percent stake in Oxford Properties’ portfolio of office assets in Sydney and Melbourne, in a deal that closed on Wednesday. Last November, the trust agreed to pay A$532.8 million to buy a set of three Sydney retail properties from the real estate division of Singapore sovereign fund GIC, a transaction expected to complete shortly, Link said.

In mainland China, the trust acquired last October its first-ever logistics assets — 75 percent stakes in a pair of distribution centres in the cities of Dongguan and Foshan in Guangdong province — for RMB 754 million ($118 million). On the heels of the reporting year’s end, Link last month agreed to purchase three logistics properties in the Yangtze River Delta for RMB 947 million ($139 million).

Mindful of rising interest rates ahead, Link arranged HK$30.8 billion ($3.9 billion) in debt during the financial year across various currencies for future business development and acquisition needs, with a record-low average borrowing cost of 2.3 percent, the trust’s manager said.