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Link announces 4.3% decline in full-year DPU, but growth in revenue and NPI supported by Singapore assets

The Edge Singapore
·3-min read

Link REIT's full year DPU for FY2023 ended March 31 fell by 4.3%, but revenue and NPI rose y-o-y supported by Singapore assets

Link REIT announced 11% y-o-y growth in revenue to HK$13,578 million ($2,343.83 million) in FY2024, for the 12 months to March 31, and net property income (NPI) growth of 9.5% to HK$10,070 million.

For the full year, total distributable income rose by 6.4% to HK$6,718 million. Final DPU was 11.6% higher y-o-y at 132.57 HK cents. However, full-year DPU fell 4.3% to 262.65 HK cents due to an expanded number of units. Net gearing ratio maintained at a low level of 19.5%, and net asset value (NAV) declined by 5.4% to HK$70.02.

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Revenue and NPI of the Hong Kong portfolio registered a growth of 2.2% and 0.1% year-on-year respectively, attributable to improved performance in Hong Kong car parks, partially offset by weaker office performance. Retail occupancy rate stood high at 98.0%.

The standout was China retail. Link REIT’s Mainland China retail portfolio occupancy reached 96.6%. The average retail reversion rate reported a turnaround to 2.8% in the 2023/2024 financial year, driven by the strategic backfilling of the Link Centralwalk basement, which benefitted significantly from increased rental rates following the replacement of an anchor tenant. Tenant sales experienced a consistent uptick and reported a 31.6% year-on-year increase, while footfall also surged 49.0% from the previous year, as customers show increasing preference for more engaging leisure activities and group dining experiences.

To attract shoppers and keep properties relevant, Link has announced a spate of asset enhancement initiatives (AEIs). The capital expenditure expected for the Link CentralWalk basement renovation was RMB24 million, with an ROI of over 20% and targeted completion by mid-2024.

Link has also allocated approximately RMB120 million for the second phase of asset enhancement of Link Plaza Tianhe in Guangzhou to renovate the amenities and redesign the mall’s West Wing.

Link Plaza Tongzhou in Beijing will undergo an AEI with around RMB60 million capital expenditure, aiming to upgrade the interior and optimise the tenant mix. Both projects are expected to commence in mid-to-late-2024.

For Link REIT’s overseas portfolio across Australia, Singapore and the United Kingdom, revenue and NPI increased by 168.8% and 204.6% to HK$1,742 million and HK$1,188 million respectively, mainly attributable to the full year contribution of Singapore assets.

Retail assets experienced continued recovery, some of which were nearing pre-Covid-19 levels. Occupancy rates for Australia and Singapore retail properties stood at 99.7% and 97.8% respectively indicating positive leasing momentum.

Jurong Point and Swing By @ Thomson Plaza in Singapore experienced a strong rebound in shopper traffic. Sales performance at the malls was driven by F&B and beauty and wellness, two major trade categories of the portfolio. During the year, rental reversion in Singapore was 9.6%.

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