Capital Allocation

PREMIUM

Analyst Note

| Michael Wu, CAIA |

Link REIT’s fiscal 2021 result was resilient and in line with expectations. We maintain our fair value estimate of HKD 78 per unit and our fiscal 2022 distribution forecast of HKD 3.15 implies a dividend yield of 4.04%. Occupancy level was solid while the decline in rental for the retail portfolio narrowed in the second half as the COVID-19 situation in Hong Kong improved. Full-year revenue of HKD 10.7 billion was slightly ahead of our HKD 10.2 billion forecast. With operating and administrative expenses also slightly higher than anticipated, overall distribution was largely in line. Second-half distribution of HKD 1.4834 per unit represents an increase of 1.8% on the same period last year and takes full-year distribution to HKD 2.8999 per share. This compares with our forecast of HKD 2.87 per unit. In line with previous year, this includes an HKD 0.14 per unit discretionary distribution. The trust maintains 100% payout and the above discretionary distribution until the next financial year. Distribution reinvestment scheme is open for the final distribution. We have made minor adjustments to Happy Valley mall occupancy and the asset enhancement project returns after the results briefing.

Company Profile

Business Description

Link REIT is Asias largest REIT, listed in 2005 to privatize retail assets held by the Hong Kong Housing Authority. It owns 137 properties and close to 60,000 car parks. It expanded its investment mandate in 2014 to allow overseas acquisitions and has since acquired retail and office properties in China, as well as an office development project in Hong Kong. The latter is not completed. In 2020, Link expanded its footprint to Australia and the United Kingdom by acquiring 100 Market Street in Sydney and The Cabot in London.

Sector Real Estate

Industry REIT - Retail

Most Recent Earnings

Fiscal Year End Mar 31, 2022

Stock Type

Employees 973

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