Link Reit to continue to divest assets – and reinvest

Hong Kong property company Link says it will continue to divest properties in its portfolio – and acquire new ones – as part of its Vision 2025 strategy unveiled yesterday.

The plans were revealed at the same time as the Reit’s annual results, in which it achieved an 8.6 per cent increase in distribution per unit and a 7.7 per cent rise in net asset value.

Under the Vision 2025 plan, Link Reit aims to achieve “high single-digit compound annual growth in portfolio value” during the next five years.

“Our core business and expansion priority remain in Hong Kong, while we actively look at inorganic opportunities in Mainland China’s tier-one cities and their surrounding river delta areas,” said Link’s CEO George Hongchoy.

At present, Mainland China assets account for 13.2 per cent of Link Reit’s HK$218 billion asset portfolio.

Chairman Nicholas Allen said Vision 2025 is intended to lift the company to “a respected regional player” in property investment.

“Cultivating a culture of excellence and creativity are cornerstones to the success of our Vision 2025. We are committed to providing strong career development for our people and introducing technological innovation to our operations.”

The company says it aims to maintain a resilient portfolio with sustainable growth and to “strengthen its asset portfolio by acquisitions, strategic divestments, development and leveraging on capital management opportunities”. Pursuing a capital-recycling strategy will ensure the business continues to have a high-quality property portfolio supported by a sound capital structure.

Currently, Link focuses on well-located, high-quality retail and office properties with growth prospects. Link Reit’s gearing ratio stands at just 10.7 per cent, which allows it to look for growth opportunities through acquisitions.

Last financial year, Link Reit divested 12 Hong Kong properties, for $12 billion and invested those funds into acquiring two retail properties on the mainland: Roosevelt Plaza in Beijing and CentralWalk in Shenzhen. Link now has five assets across four tier-one cities in China, all almost fully let and with high reversion rates.

In Hong Kong, 11 asset-enhancement projects were completed, with the return on investment of most of those projects exceeding Link’s target of 15 per cent. Kai Tin Shopping Centre achieved a return on investment of 35.6 per cvent.

The Quayside – Link Reit’s joint-venture project with Nan Fung Development in Kowloon East – has obtained the occupation permit and will house Link’s new headquarters. Major tenants such as JP Morgan, WeWork, and Gammon will move in progressively.  

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