Link Real Estate Investment Trust · HKEX:823
Link Real Estate Investment Trust — H1 2014/2015 Earnings Presentation
26 slides from Link Real Estate Investment Trust's earnings presentation, Nov 12, 2014
Slide 1: Expanding horizons, exploring new opportunities
Expanding horizons, exploring new opportunities Interim Results Presentation Press Conference 2014/2015 12 November 2014 2014/2015 Interim Results
Slide 2: Interim highlights
Interim highlights Financial highlights Distribution Revenue Net Property Income Per Unit HK$3,830M HK$2,783M HK89.56 cents (1) ( 9.6% yoy) ( 10.6% yoy) ( 11.6% yoy) Note : (1) Including discretionary distribution Non-financial highlights 37 Mystery Link Together Initiatives Employee Unit Purchase S
Slide 3: Expanding horizons and adding value to communities
Expanding horizons and adding value to communities Enhance performance in Hong Kong portfolio Building regional centres for communities Operate in retail segment that is resilient to broader economic volatility Diversify portfolio to reduce risk and improve prospects for long-term growth Activ
Slide 4: Financial and Operational Performance
Financial and Operational Performance 2014/2015 Interim Results
Slide 5: Financial Performance
Financial Performance Solid performance supporting distribution growth 6 months 6 months ended ended 30 Sep 2014 30 Sep 2013 YoY HK$’M HK$’M % Revenue 3,830 3,493 9.6 % Net property income 2,783 2,517 10.6 % Total distributable income 1,926 1,854 3.9% Discretionary distribution (1) 128 - N/A Total d
Slide 6: Retail Income Performance
Retail Income Performance Maintaining steady growth For the six For the six (HK$’M) months ended months ended 3,500 30 Sep 30 Sep 3,000 2014 2013 2,831 2,602 158 2,500 145 NPI margin (%) 73.2 72.9 379 335 2,000 Reversion rate (%) 23.6 23.6 1,500 2,122 2,294 1,000 As at As at 500 30 Sep 31 Mar 0 2014
Slide 7: Tenant Performance
Tenant Performance Resilient growth with majority in non-discretionary trades (1) (3) Tenant Gross Sales Retail Trade Mix by Monthly Base Rent YoY (%) 16.0% 17.1% 24.8% 14.0% 13.3% 8.3% 12.0% 10.1% 10.0% 9.3% 8.3% 11.3% 8.0% 22.6% 6.0% 6.2% 1.3% 5.2% 6.0% 4.3% 14.6% 4.0% 2.0% Food and Beverage 0.0%
Slide 8: Car Park Income Performance
Car Park Income Performance Strong demand supports growth For the six For the six months ended months ended Utilisation (HK$’M) Rate (%) 30 Sep 30 Sep 1,500 100% 2014 2013 91.7% NPI margin (%) 70.7 68.8 86.4% 90% Car park income per 1,738 1,529 1,000 80% space per month (HK$) 825 729 216 70% 185 As
Slide 9: Property Valuation
Property Valuation Cap rate compression to reflect recent market transactions (HK$'M) 160,000 • Robust car park performance and lower cap 140,000 125,486 rates supported value increase 120,000 109,899 22,994 • Average valuation per space of HK$294K 100,000 18,654 80,000 60,000 Retail property value
Slide 10: Business Overview and Outlook
Business Overview and Outlook 2014/2015 Interim Results
Slide 11: Total Unitholders' Return
Total Unitholders’ Return (“TUR”) Delivering TUR growth to unitholders 5-Year Compound Annual Total Return Comparison (2) 5-Year Movement DPU Unit Price of The Link REIT 4.4% (1)(3) 26.6% (1)(3) HK$ HK cents 50 300 DPU CAGR: 14.6% (5) 45 Unit Price CAGR: 21.3% 250 40 35 200 30 25 150 $325 20 100 (1)
Slide 12: Major Achievements
Major Achievements • Continue to improve tenant mix Asset Management • Margin continue to expand • Completed 2 projects Asset Enhancement • Maintain strong pipeline till 2020 • Acquired Lions Rise Mall Asset Investment • Disposed 9 smaller properties to streamline portfolio • Issued US$500M 10-year
Slide 13: Asset Management
Asset Management Improved tenant mix driving sustainable rental growth Introduce Improve Support Refine innovative service tenant tenant mix marketing standards sales campaigns Newly Joined Tenants Existing Tenants Expansion 2014/2015 Interim Results P.13
Slide 14: Asset Enhancement
Asset Enhancement Ongoing process to improve and create value Serves local community Refurbishment Size and layout constraints Ageing properties Limited tenant choices Poor property conditions Outdated design District growth potential Repositioning Synergy with nearby properties 2014/2015 In
Slide 15: Asset Enhancement: Project pipeline extending to 2020
Asset Enhancement Project pipeline extending to 2020 Completed Refurbishment Projects Hoi Fu Shopping Centre Mei Lam Commercial Centre Capex: HK$39M ROI(1) : 19.1% Capex: HK$87M ROI(1) : 17.8% BEFORE AFTER BEFORE AFTER Project Pipeline Target Completion Year Project Pipeline 2014 2015 2016 2017 2018
Slide 16: Lions Rise Mall
Asset Investment – Acquisition in Hong Kong Provide synergistic benefits with existing assets Lions Rise Mall Lung Cheung Wong Tai Sin Lions Rise • Allow development of a Positioning Mid Mass-mid Mid coordinated retail cluster Target Primary + Secondary Catchment Primary • Potential upside Customers
Slide 17: Asset Investment – Acquisition in Mainland China
Asset Investment – Acquisition in Mainland China Paving the way for inorganic growth Economy Income Emerging Consumer Urbanisation growth growth middle class Demand Seeking opportunities in Mainland China, initially within Pearl River Delta Diligent project assessment and prudent deal structuring In
Slide 18: Proposed acquisition of Longgang Vanke Mall
Asset Investment – Acquisition in Mainland China Proposed acquisition of Longgang Vanke Mall Signed MOU on 10 Nov 2014 for exclusive due diligence Target Property Retail centre, certain street shops and car parks of an integrated mixed-use development Location Longcheng Street, Longgang District, Sh
Slide 19: Asset Investment – Disposals
Asset Investment – Disposals Enhance value by streamlining the portfolio Continue to evaluate our portfolio performance Focus management resources on our larger assets Disposal Criteria: Relatively smaller assets in portfolio Lack of synergistic benefits with the rest of our portfolio Limited
Slide 20: Capital Management
Capital Management Active approach to strengthen financial capability Unit buybacks Neutralise future DPU loss from disposals Total amount used: HK$888M Units bought back: 19.4 million at average price of HK$45.6 per unit Taken advantage of the low interest rate environment to lock-in low fund
Slide 21: Strategy Going Forward
Strategy Going Forward Multi-growth drivers supported by solid capital management • Continue to upgrade and expand tenant mix Asset Management • Diligent cost control to increase margin • Capitalise on districts with growth dynamics Asset Enhancement • Extend pipeline and explore more opportunities
Slide 22: Change in REIT Code
Change in REIT Code Opportunities to participate in property development Hong Kong REITs are now allowed to participate in property development activities, with investment size limited to <10% of Gross Asset Value Propose to undertake property development and related activities in respect of develop
Slide 23: Outlook
Outlook Resilient growth in retail sales of non-discretionary trades in Hong Kong Large portfolio with high operating leverage provides stable income Prudent capital management strategy underpins solid base for growth Disciplined and cautious growth strategy Consistent performance producing sustaina
Slide 24: Investor Information
Investor Information Interim Distribution Distribution period April 2014 – September 2014 Last day of trading on a “cum” basis 24 November 2014 Ex Distribution date 25 November 2014 27 November – 1 December 2014 Distribution book close (both days inclusive) Record date for entitlement to cash 1 Dece
Slide 25: Global Recognitions
Global Recognitions 2014/2015 Interim Results P.25
Slide 26: Disclaimer
Disclaimer This document has been prepared by The Link Management Limited in its capacity as the Manager (the “Manager”) of The Link Real Estate Investment Trust (“The Link REIT”) solely for use at the presentations/meetings held in connection with the 2014/2015 Interim Results announcement and ma
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