Link Real Estate Investment Trust · HKEX:823
Link Real Estate Investment Trust — Investor Presentation (September 2021)
41 slides from Link Real Estate Investment Trust's investor presentation, September 2021
Slide 1: Corporate Presentation September 2021
Corporate Presentation September 2021
Slide 2: About Link REIT
2 About Link REIT RESILIENT TRADE MIX Focus on non-discretionary retail, car parks and premium grade A offices ASSETS DIVERSIFIED Commercial assets in Hong Kong, ACROSS REGIONS Tier-1 cities in Mainland China, London and Sydney Temple Mall TRACK RECORD OF Sixteen years of PERFORMANCE active asset ma
Slide 3: One of the Top Global REITs
3 One of the Top Global REITs Link is one of the largest retail focused REITs in the world US$B 50.0 43.1 40.0 30.0 27.6 19.2 20.0 13.3 11.9 10.5 9.9 9.2 10.0 7.2 7.1 5.6 5.6 3.4 2.4 1.6 0.0 No.1 Largest retail-focused REIT 1st First REIT listed in Asia by market capitalisation in Hong Kong Only 1 O
Slide 4: Diversified Asset Portfolio
4 Diversified Asset Portfolio (1) Investments are primarily retail assets located in Hong Kong, Mainland Total Portfolio Value HK$207B China and Overseas 3.9% 3.1% Shanghai Beijing Overseas 13.7% 1 Retail 2 Retail 1 Office Hong Kong 60.3% 2 Office 3.8% 79.3% Mainland China Guangzhou 16.8% Overseas 1
Slide 5: Strong Commitment to Sustainability
5 Strong Commitment to Sustainability Ardent Supporter and Advocate Kai Tin Shopping Centre 61% of portfolio(1) obtained green building certification As of 2020/2021 Note: (1) By total gross floor area.
Slide 6: Net Zero Strategy 2035
6 Net Zero Strategy 2035 Our Pathway to Net Zero Energy Efficiency Measures We target to further reduce electricity usage and adopt 100% renewable Energy Management System energy (1) by 2035. Rolling out in 4 pilot sites in T Town, Cheung Fat Announced 20/30 Plaza, Tsz Wan Shan Shopping Centre & Ann
Slide 7: Diverse and Independent Leadership
7 Diverse and Independent Leadership Link Board Composition Led by an independent Chairman, the 14 Board Directors provide oversight and control, offering diverse skills and INED Ethnicity expertise NED ED 64% Chinese 36% Non-Chinese 14% 7% 14 Gender Board Directors 64% Male 36% Female 79% As of 31
Slide 8: Track Record of Performance and Execution
8 Track Record of Performance and Execution Steady Financial Performance 5-Year CAGR Revenue (HK$M) +4.2% NPI (HK$M) +4.8% Distribution Per Unit (HK$) +7.1% NAV (HK$) +6.1% 2.8719 2.8999 2.7117 3 2.4978 2.2841 83.06 89.48 77.61 76.24 62.47 2 10,718 10,744 10,023 10,037 9,255 7,689 8,220 8,238 7,663
Slide 9: Active Portfolio Management to Create Value
9 Active Portfolio Management to Create Value Constantly Adding New Growth Drivers Apr 17 Apr 20 Aug 20 Dec 05 Jan 15 3rd Mainland China 1st Overseas 2nd Overseas IPO of 180 shopping 1st Development Acquisition Acquisition Acquisition centres and car Acquired greenfield site Link Plaza • Guangzhou,
Slide 10: Operational Update
01 Operational Update
Slide 11: Hong Kong Retail: 96.9% Occupancy
11 Hong Kong Retail Retail Occupancy Remains Steady and Strong 96.9% Occupancy As at 30 Jun 21 Stable trade mix dominated by Jun 21 food related tenants Food and beverage 27.8% Supermarket and foodstuff 21.9% Markets/ cooked food stalls 16.6% Lok Fu Place Services 10.7% Personal care/ medicine 5.5%
Slide 12: Hong Kong Retail
12 Hong Kong Retail Strong Q1 Tenant Sales Growth (1) Easing Occupancy Cost (2) Apr 21 – Jun 21 (Link) Apr 21 – Jun 21 (HK) Food & beverage Supermarket & foodstuff (3) General retail Overall 15.5% 12.2% 10.6% 9.5% 9.9% 15.1% 4.8% 14.5% 13.5% -5.4% 11.3% -7.5% (3) Food & beverage Supermarket & Genera
Slide 13: Hong Kong Car Park
13 Hong Kong Car Park Positive Trend Continues ▪ 1Q monthly parking performance was better than last year with good recovery ▪ Hourly parking continued to pick up in first quarter of 2021/22 with performance recovered back to pre- COVID level Lok Fu Place Butterfly Plaza Sam Shing Fu Tung
Slide 14: Hong Kong Office: 93.8% Occupancy
14 Hong Kong Office Strong Growth in Occupancy Despite Difficult Market (1) ▪ Committed another deal with 93.8% Occupancy a global health insurance Office company in first quarter of As at 30 Jun 21 2021/2022 Strong blue chip tenants offering stability Jun 21 (1) Finance 42.2% Insurance 17.2% Real e
Slide 15: Mainland China Retail: 95.2% Occupancy
15 Mainland China Retail Healthy Occupancy Amidst Disruption from Occasional Lockdown (1) 95.2% Occupancy As at 30 Jun 21 Stable Mid-market Focused Trade Mix Jun 21(1) Food and beverage 28.9% Fashion 34.8% Link Plaza ⋅ Guangzhou General retail & others 28.8% • Healthy tenant sales since April with s
Slide 16: Mainland China Office: 91.6% Occupancy
16 Mainland China Office Undergoing Refurbishment to Upgrade Asset Quality Link Square, Shanghai • Enhancement for office lobby 91.6% Occupancy and common areas As at 30 Jun 21 kick-started to complete by early 2022 Anchored by Multinational Corporations Jun 21 Professional services 41.8% Technology
Slide 17: Recent Acquisitions in Mainland China
17 Recent Acquisitions in Mainland China Qibao Vanke Plaza, Shanghai – 50% Interest (1) Trade Mix by Monthly Rent Jun 21 RMB6,400M For 100% Agreed Property Value Food and beverage 33.9% Fashion and accessory 47.0% Life services 8.4% 98.4% Occupancy Others 10.7% As at 30 Jun 21 Total 100% 1st Retail
Slide 18: Asset Management and Enhancement to Sustain Growth Momentum
18 Asset Management and Enhancement to Sustain Growth Momentum “Business As Mutual” Framework to Create Shared Values ‘Summer Lovecation’ Marketing campaign featuring music fiesta and workshops & ✓ Strengthen marketing support to bolster tenant recovery running from July to August in Stanley Plaza ✓
Slide 19: Overseas Offices offer Immediate and Stable Income
19 Overseas Offices offer Immediate and Stable Income Quality Assets with Healthy and Secured Income Streams ▪ Overseas office properties are fully-let with stable income contributions ▪ Over 95% rental collection rates for both 100 Market Street and The Cabot ▪ While office workers in Sydney and Lo
Slide 20: Strong Liquidity and Capital Base
20 Strong Liquidity and Capital Base Recent Financing Staggered Maturity Profile (2) (HK$’B) Medium Term Notes Converted £200M 5-year loan to Convertible bonds (3) January 2021 sustainability-linked loan 10.0 Bank loans 1.4 8.1 Arranged HK$500M 5-year sustainability- 7.7 April 2021 linked loan 4.0 5
Slide 21: Strategy and Update
02 Strategy and Update
Slide 22: Selected Recent Achievements on Vision 2025
22 Selected Recent Achievements on Vision 2025 Portfolio 2nd Retail Investment in Guangzhou Culture of Vaccination Incentives Growth Happy Valley Shopping Mall Excellence To all staff to protect our Linkers and community >95% Occupancy rate Body Check Vaccination Lucky Draw for Maintain high retail
Slide 23: Proactive Initiatives to Support Tenants and Community
23 Proactive Initiatives to Support Tenants and Community Latest COVID-19 Update ✓ Occupancy remained steady with no major rental collection and arrears issue ✓ Retail sales in Hong Kong gradually recovering with no new/ major local outbreak since late June ▪ Most restaurants operating till 10:00PM
Slide 24: Capital Management Priorities
24 Capital Management Priorities Maintaining Strong Capital Base to Support Future Growth Delivering Capital Return to Unitholders ▪ Distribution reinvestment scheme to benefit both Link and Unitholders ▪ Commit to 100% payout ▪ HK14 cents discretionary Maintain healthy Committed to Cost effective d
Slide 25: Portfolio Management to Diversify Geographically and Avoid Concentration Risks
25 Portfolio Management to Diversify Geographically and Avoid Concentration Risks Risk Current (1) Management Exploring locations with proximity to Tier 1 cities Composition Guidance Geography ▪ Hong Kong 79.3% 60-70% ▪ Mainland China 16.8% 20-25% ▪ Overseas 3.9% 10-15% Bohai Economic Rim ● Beijing
Slide 26: Appendix: Financial Results for the Year Ended March 21
03 Appendix Financial Results for the Year Ended 31 March 2021
Slide 27: Key Financial Data
27 Appendix 1 Key Financial Data FY20/21 FY19/20 YoY Consolidated (HK$’M) (HK$’M) % Revenue 10,744 10,718 +0.2 Net property income 8,238 8,220 +0.2 Rentals(1) Hong Kong retail properties 6,159 6,288 -2.1 Hong Kong car parks 1,883 1,912 -1.5 Mainland China retail properties 850 937 -9.3 Hong Kong, Ma
Slide 28: Financials – Income Statement Summary
28 Appendix 2 Financials – Income Statement Summary Year ended Year ended 31 Mar 2021 31 Mar 2020 YoY (HK$’M) (HK$’M) % Revenue 10,744 10,718 +0.2 Property operating expenses (2,506) (2,498) +0.3 Net property income 8,238 8,220 +0.2 General and administrative expenses (428) (416) +2.9 Interest incom
Slide 29: Financials – Distribution Statement Summary
29 Appendix 3 Financials – Distribution Statement Summary Year ended Year ended 31 Mar 2021 31 Mar 2020 YoY (HK$’M) (HK$’M) % Profit / (loss) for the year, before transactions with Unitholders 1,185 (17,122) -106.9 Change in fair values of investment properties and 4,910 23,831 -79.4 impairment of g
Slide 30: Financials – Financial Position & Investment Properties
30 Appendix 4 Financials – Financial Position & Investment Properties Financial Position Summary As at As at As at HK$’M 31 Mar 2021 30 Sep 2020 31 Mar 2020 Total assets 209,885 203,186 207,619 Total liabilities 51,192 49,159 47,502 Non-controlling interest (27) 174 406 Net assets attributable to Un
Slide 31: Financials – Capital Management
31 Appendix 5 Financials – Capital Management Committed Debt Facilities (After Currency Swaps) HK$ B % Mar-21 Sep-20 Mar-21 Sep-20 HK$ Bank loans 7.4 7.6 19.2 21.1 RMB Bank loans 2.8 0.8 7.3 2.2 AUD Bank loans 3.9 3.6 10.1 10.0 GBP Bank loans 3.8 3.7 9.7 10.3 Medium Term Notes 16.7 16.3 43.3 45.3 Co
Slide 32: HK Portfolio – Retail Revenue Analysis
32 Appendix 6 HK Portfolio – Retail Revenue Analysis Percentage contribution Year ended Year ended Year ended 31 Mar 2021 31 Mar 2020 YoY 31 Mar 2021 (HK$’M) (HK$’M) % % Retail rentals: (1) Shops (2) 4,881 5,095 -4.2 70.7 Markets / cooked food stalls 954 886 +7.7 13.8 Education / welfare and ancilla
Slide 33: HK Portfolio – Car Park Revenue Analysis
33 Appendix 7 HK Portfolio – Car Park Revenue Analysis Percentage contribution Year ended Year ended Year ended 31 Mar 2021 31 Mar 2020 YoY 31 Mar 2021 (HK$’M) (HK$’M) % % Car park rentals: Monthly 1,432 1,494 -4.1 75.8 Hourly 451 418 +7.9 23.9 Expenses recovery and other 5 5 - 0.3 miscellaneous rev
Slide 34: HK Portfolio – Property Operating Expenses Analysis
34 Appendix 8 HK Portfolio – Property Operating Expenses Analysis Percentage contribution Year ended Year ended Year ended 31 Mar 2021 31 Mar 2020 YoY 31 Mar 2021 (HK$’M) (HK$’M) (%) (%) Property managers’ fees, security 592 578 +2.4 28.4 and cleaning (1) Staff costs 367 380 -3.4 17.6 Repair and mai
Slide 35: HK Portfolio – Retail Portfolio Data
35 Appendix 9 HK Portfolio – Retail Portfolio Data Retail properties Retail Average monthly Total area Valuation rentals unit rent (1) Occupancy rate (’000 sq. ft.) (HK$’M) (HK$’M) (HK$ psf) (%) No. of properties As at As at Year ended As at As at As at As at 31 Mar 31 Mar 31 Mar 31 Mar 31 Mar 31 Ma
Slide 36: HK Portfolio – Retail and Car Park Portfolio Data
36 Appendix 10 HK Portfolio – Retail and Car Park Portfolio Data As at As at 31 Mar 2021 31 Mar 2020 Change Average monthly unit rent (psf pm) (1) ◼ Shops HK$61.2 HK$64.3 -4.8% ◼ Overall (ex self use office) HK$62.4 HK$64.6 -3.4% Occupancy rate ◼ Shops 97.0% 96.4% +0.6% ◼ Markets/cooked food stalls
Slide 37: HK Portfolio – Retail Lease Expiry Profile
37 Appendix 11 HK Portfolio – Retail Lease Expiry Profile As % of total area As % of monthly rent (1) As at 31 March 2021 % % FY21/22 32.9 31.1 FY22/23 24.5 28.4 FY23/24 20.8 22.1 FY24/25 and beyond 13.9 14.1 Short-term lease and vacancy 7.9 4.3 Total 100.0 100.0 Note: (1) Refers to base rent (exclu
Slide 38: Mainland China Portfolio – Lease Expiry Profile
38 Appendix 12 Mainland China Portfolio – Lease Expiry Profile Retail Office As % of As % of monthly As % of As % of monthly total area rent (1) total area rent (1) As at 31 March 2021 (%) (%) (%) (%) FY21/22 20.1 26.3 31.2 32.6 FY22/23 21.6 28.7 28.6 31.2 FY23/24 13.6 18.3 11.2 12.5 FY24/25 and bey
Slide 39: Operational Performance
39 Appendix 13 Operational Performance Occupancy Rates (2) Retail Office 96.9% 95.2%(3) 93.8%(2) 91.6% 100.0% Hong Kong Mainland China Hong Kong Mainland China Overseas (4) Reversion Rates Retail Retail Office -1.8% 11.1% -8.0% Hong Kong Mainland China Overall Rental Collection Rates 98% 98% ~90% Ho
Slide 40: Valuation
40 Appendix 14 Valuation Valuation Capitalisation Rate ↑ 3.0% As at As at As at As at Mainly due to HK$’M 31 Mar 2021 31 Mar 2020 31 Mar 2021 31 Mar 2020 Overall two new overseas Hong Kong offices and exchange Retail properties 124,581 127,515 3.10% – 4.50% 3.10% – 4.50% gain Car parks 31,516 31,732
Slide 41: Disclaimer
Disclaimer Disclaimer ◼ This document has been prepared by Link Asset Management Limited in its capacity as the Manager (the “Manager”) of Link Real Estate Investment Trust (“Link REIT”) solely for use at the presentations/meetings held and may not be reproduced or redistributed without permission.
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