The chief executive of Link Real Estate Investment Trust (0823), George Hongchoy Kwok-lung, says the worst time has passed for tenants and Link REIT is willing to cut rents to maintain a high occupancy rate.
Link REIT said the total distributable amount for the year ended March 31 rose 4.2 percent year-on-year to HK$5.96 billion, after adjustments and a discretionary distribution of HK$291 million. Distribution per unit for the year climbed by 5.9 percent to HK287.19 cents from the year before.
It recorded a net loss of HK$17.3 billion before transactions with unitholders. Revenue increased by 6.8 percent year-on-year to HK$10.72 billion and net property income 6.9 percent to HK$8.22 billion. Average monthly unit rent improved by 3.4 percent year-on-year to HK$70.3 per square foot by March 31.
Shares of Link REIT rose 5.78 percent to HK$61.3 yesterday.
Occupancy rate for the portfolio fell 0.6 percentage points year-on-year to 96.5 percent by March 31.
Hongchoy said some tenants enjoyed rent cuts of more than 50 percent.
"We have a broad tenant mix, and in these difficult times, nearly a half of that tenant mix have been doing pretty well, so the idea that we should give rental concessions completely across the board doesn't make any sense," said chairman Nicholas Charles Allen.
Meanwhile, Allen said Link REIT has no intention of changing the policy of distributing 100 percent of its distributable income to unitholders. "We feel we're in a resilient position," he said.
"We think this is an opportunity in the current environment to continue to look at assets that we would like in a variety of jurisdictions, both Hong Kong and overseas," said Allen.
"We have teams already in mainland China as well in Hong Kong, so covering those two jurisdictions are eminently achievable from a due diligence point of view. Due diligence, some aspects of it, further afield, would be challenged by some travel restrictions, but the issues are not insurmountable," he added.
Announcing the results are, from left, executive director and chief financial officer Kok-siong Ng, Nicholas Allen and George Hongchoy.
