Link Reit (0823.HK)

[cyclone]

Link Reit sells 17 Hong Kong malls to Gaw-Goldman venture for HK$23 billion

Peggy Sito and Shirley Zhao
PUBLISHED : Tuesday, 28 November, 2017, 5:46pm
UPDATED : Wednesday, 29 November, 2017, 8:17am

Link Reit, the largest real estate investment trust in Asia, on Tuesday announced the sale of a portfolio of properties that includes 17 Hong Kong shopping centres for HK$23 billion (US$2.94 billion) – the biggest sale of its kind in the city – despite criticism from activist groups that this could lead to a rise in rents.

Link Reit said it would sell commercial property totalling 2.2 million square feet to a consortium led by Hong Kong-based private equity fund Gaw Capital Partners, confirming an earlier report by the South China Morning Post. US-based investment bank Goldman Sachs is part of the consortium.

The shopping centres are located in Kowloon and the New Territories close to subway stations and also includes more than 8,000 car parking spaces.

More details in http://www.scmp.com/property/article/212...20-billion

[CY09]

https://www.linkreit.com/-/media/linkrei...9FCD3A2B3B

LINK REIT 1HFY2026 paints a very weak retail landscape in both China and Hong Kong. The leases LINK REIT is renewing shows falling rentals in the resilient/defensive mall spaces. China is especially badly hit where LINK REIT malls (which targets the middle class of China) have 10% decrease in rental reversions. It points to fairly weak China spending.

For LINK REIT, dividend/net profit has fallen despite falling interest cost. This means its revenue is falling faster than the interest costs. Quite interesting because many REITs "experts' tout that a falling interest rates benefits REIT; yes it helps to mitigate cost, but what happens if the lowered interest rates is due to a declining economy, resulting in lowered demand and negative rental reversions.

Statistics are facts and its now pointing to LINK REIT having lower and lower DPU despite falling interest rates/cost.

[weijian]

https://www.linkreit.com/-/media/linkrei...9FCD3A2B3B

LINK REIT 1HFY2026 paints a very weak retail landscape in both China and Hong Kong. The leases LINK REIT is renewing shows falling rentals in the resilient/defensive mall spaces. China is especially badly hit where LINK REIT malls (which targets the middle class of China) have 10% decrease in rental reversions. It points to fairly weak China spending.

For LINK REIT, dividend/net profit has fallen despite falling interest cost. This means its revenue is falling faster than the interest costs. Quite interesting because many REITs "experts' tout that a falling interest rates benefits REIT; yes it helps to mitigate cost, but what happens if the lowered interest rates is due to a declining economy, resulting in lowered demand and negative rental reversions.

Statistics are facts and its now pointing to LINK REIT having lower and lower DPU despite falling interest rates/cost.

Hi CY09,

For retail, provided that the tenant fit is good for the mix, it make sense to rent out at lower rates compared to keeping it empty. For the landlord, there are more tenants to spread out the mgt fees (security/cleaning) and for shoppers, they will not like seeing units been boarded up.

On another note, the rental reversion for Link Reit's Mainland China retail (6 months ending Sept2025) is pretty bad at -16.4% (although it seems to be driven by some outlier). A quick comparison with Capitaland China Trust's rental reversion for the 9 months period to end Sept2025 is at -1.5%.