Link Real Estate Investment Trust (0823) said its total distributable amount declined 6.4 percent to HK$6.6 billion in the year ended March, and that it intends to buy back units with proceeds from non-core properties disposals.
Distribution per unit for the year was HK$2.5361, down by 6.9 percent.
Revenue dipped by 2 percent to HK$13.94 billion and net property income also dropped by 3.7 percent to HK$10.6 billion, mainly due to negative rental reversions in Hong Kong and the mainland amid headwinds in the macro environment and retail sector.
Link REIT’s Hong Kong portfolio recorded declines of 3 percent in revenue and 4.6 percent in NPI. Occupancy stood at 97.8 percent as of the end of March and a negative rental reversion of 8.2 percent was recorded in the 12 months through March.
While the market rental level has stabilized, negative reversions in the city are expected to persist at similar levels through the current fiscal year from a high base created after Covid, executives said at the post-earnings conference.
Its mainland retail portfolio’s occupancy rate stood at 96.6 percent, with a negative rental reversion of 14.3 percent.
General and administrative expenses reduced by 9.4 percent due to savings from organizational streamlining, which helped to partially cushion the weaker NPI performance.
Net gearing ratio increased by 2.4 percentage points to 23.9 percent as of the end of March.
Link REIT will divest its non-core assets, which account for around 5-10 percent of its overall portfolio, over time, and will also consider selling assets at an appropriate price, its filing said.
It intends to restart its unit buyback program to drive unitholder returns with the capital from the sales and will allocate some of it toward investment in the core retail asset portfolio.
