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Link Real Estate Investment Trust has recorded a H1 net loss of HKD 1,614 million, even though its revenue for the period stood at HKD 7,023 million. The REIT is issuing an interim distribution of HKD 126.88 cents per unit. Management notes that operating conditions might remain tight in the second half of the fiscal year. The results underscore ongoing headwinds in Link's retail business, but its longer-term 'Link 3.0' diversification strategy and disciplined capital management could help build resilience.
Link Real Estate Investment Trust (stock code?0823.HK) has posted a first?half net loss of HKD?1,614?million, despite generating revenue of HKD?7,023?million. The company attributes this shortfall to ongoing pressures in its operating environment. Advertisement
Even with the loss, Link is offering an interim distribution of HKD?126.88?cents per unit to its unitholders. In its business update, the REIT's management warned that as it moves into the second half of the financial year, challenging conditions could persist, driven by subdued retail demand and cost pressures.
This comes at a time when Link is continuing to execute its 'Link 3.0' strategy, which aims to diversify its earnings beyond traditional rental income. As part of this approach, the REIT is focusing on active portfolio management and expanding its investment?management business, including partnerships with capital investors.
On the capital front, Link maintains a relatively conservative financial structure. Its net gearing ratio was reported at 21.5 per cent. Its fiscal year efforts also included asset enhancement projects, such as upgrades at Fu?Shin and Sau?Mau?Ping shopping centres, with expected returns in the high teens.
From a broader perspective, the REIT's most recent full-year results showed its revenue rising by 4.8 per cent and net property income increasing by 5.5 per cent. However, the fair value of its property portfolio declined, dragged down by higher capitalisation rates and currency headwinds, contributing to a fall in its net asset value per unit.
Despite these challenges, Link emphasises resilience in its Hong Kong retail portfolio. Retail occupancy remained high, at around 97.8 per cent, and over 600 new leases were signed during the prior fiscal year. The REIT also continues to monitor tenant sales trends and rental reversion, which have shown signs of moderation in their decline.
Management is clear-eyed about the risks ahead. They expect turbulence to persist but are confident that their long-term, diversified strategy and disciplined capital management will help navigate the current headwinds.
Source Reuters
5th Jun, 2025
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