Management of Hong Kong suburban shopping centre owner Link Reit have expressed confidence the company can ride out the ongoing protest turmoil.
“While external conditions in Hong Kong will remain challenging in the foreseeable future, we believe that Link, with its focused and experienced management team, will remain a beacon of stability,” said Nicholas Allen, chairman of Link’s board.
Link Asset Management, which manages the trust, yesterday reported stable half-year results, with revenue up 7.8 per cent year on year and like-for-like net property income up 8.5 per cent in the six months to September 30. Profit declined 28 per cent year-on-year to HK$6.717 billion (US$858 million) primarily due to a smaller gain in fair value of investment properties.
“During the period under review, we achieved modest growth despite the tough market conditions, benefitting from the resilience of our non-discretionary retail-focused portfolio and our decisive actions over the past few years on cost control,” said Allen.
CEO George Hongchoy said that throughout the protests the company’s priority has always been to ensure the safety and well-being of shoppers, tenants and frontline staff.
“We have endeavoured to maintain our shopping centres’ opening hours over the past few months so that our tenants and shoppers can go about their lives. We have also committed a significant amount of time and effort during the past six months to engage with our tenants and business partners to understand their challenges.”
Hongchoy said Link understood the challenges facing tenants. “We try to offer effective and targeted support to them so we all are able to weather the storm together, becoming stronger and more resilient.”
While Hong Kong assets performed steadily, the group’s mainland investments showed significant improvement. The Mainland China portfolio posted revenue of $732 million and net property income of $578 million, representing a 49.4-per-cent and 48.2-per-cent year-on-year increase respectively.
Link’s four Mainland China properties represent just 12.5 per cent of its portfolio but the group is looking to boost its assets across the border, targeting mid-mass retail properties and grade-A office buildings in the four tier-one cities and their surrounding river delta areas.
The four properties owned currently are 99-per-cent leased, with an average reversion rate at a high 31.5 per cent during the last half year. Link plans to rebrand all its retail properties in Mainland China with a unified identity – Link Plaza. CentralWalk, the newly acquired property in Shenzhen, is under renovation.
In order to provide centralised management of an expanding portfolio in Mainland China, Link has set up its Mainland China headquarters at Link Square, a Link REIT office property in Shanghai.