Link raises distribution as profit slumps 28pc

Business | Kevin Xu 14 Nov 2019

Link Real Estate Investment Trust (0823) said the total distributable amount for the six months ended September 30 increased by 7.5 percent year-on-year to HK$2.97 billion after adjustments and a discretionary distribution of HK$145 million.

Net profit slumped by 28 percent to HK$6.72 billion.

The interim distribution per unit for the period increased by 8.3 percent to HK$141.47 cents.

Revenue grew by 8.2 percent year-on-year to HK$5.33 billion, and net property income rose by 8.3 percent to HK$4.07 billion.

As of September 30, the occupancy rate for Link's portfolio remained stable at 96.9 percent and had a overall portfolio reversion rate of 18.1 percent. The average monthly unit rent increased from HK$68.0 per square foot as of March to HK$69.6 per square foot as of September.

Shares of Link fell by 1.46 percent to HK$81.1 on Wednesday.

Link REIT announced that board lot sizes of the trading units will decrease from 500 units to 100 units from January 2.

Given the closing price of HK$81.1 yesterday, the minimum investment amount will drop from HK$40,550 to HK$8,110.

Chief executive George Hongchoy Kwok-lung said retail investors account for about 30 percent and that he hopes the adjustment will attract more retail investors.

He added that tenants have a conservative attitude to the prospects of the retail industry.

Chairman Nicholas Allen said the adjustment could make the lives of shareholders easier.

Allen added that the Link REIT is not facing shop closures and occupancy rates are still high.

Link REIT said in the first half of the financial year, the company bought back 13 million units at an average unit price of HK$87.3 using HK$1.1 billion, and will continue the unit buyback program when market conditions and regulations permit in the second half of the financial year.

"Our ability to execute this buyback program is however affected by several factors including market conditions, unit prices, trading volume and other regulatory considerations," Link REIT said.

Link REIT announced a plan to repurchase up to 60 million units in June.

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