During the year under review, for Link REIT, 12 Hong Kong properties were divested for a total of $12 billion, which were reinvested through the acquisition of two retail properties – Roosevelt Plaza in Beijing and CentralWalk in Shenzhen.
Link REIT now has five operating assets across four tier-one cities in China. The retail assets in Mainland China are almost fully let and reversion rates achieved were high on the back of strong leasing demand. The majority of expiring office leases in Link Square 1 and 2 in Shanghai were renewed with good results in the second half of the financial year.
In Hong Kong, 11 asset enhancement projects were completed during the reporting period. Return on investment of most of these projects exceeded Link’s target return of 15%. In particular, Kai Tin Shopping Centre achieved a spectacular return on investment of 35.6%.
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 gradually. As at the end of March 2019, more than half of the retail and office spaces have been leased and most of the remaining spaces are under advanced negotiations or final documentation.
Link REIT announced in June 2018 its intention to buy back up to 80 million units in the financial year 2018/2019. Link REIT has bought back only 42.1 million units during the year mainly due to the extended period of trading blackout related to the asset divestment and acquisitions. Looking ahead, as part of the strategy to return capital to the market, Link REIT prefers to buy back approximately 60 million units, subject to market conditions and regulatory restrictions.
During the year, Link REIT also issued the world’s first green convertible bond in the real estate sector, demonstrating its commitment to sustainable development and the development of Hong Kong as a green finance center.