Link Real Estate Investment Trust · HKEX:823
Link Real Estate Investment Trust — FY2020/21 Earnings Presentation
44 slides from Link Real Estate Investment Trust's earnings presentation, 2021
Slide 1: Annual Results Analyst Presentation
Annual Results Analyst Presentation 2020/2021
Slide 2: 2020/2021 Highlights
01 2020/2021 Highlights
Slide 3: Financial Performance
3 Financial Performance T Town, Hong Kong Revenue NPI DPU NAV per unit HK$10,744M HK$8,238M HK$2.8999 HK$76.24 +0.2% YoY +0.2% YoY +1.0% YoY (1) -1.8% YoY Note: (1) Includes discretionary distribution of HK14.00 cents per unit.
Slide 4: Operational Performance
4 Operational Performance Occupancy Rates Retail Office 96.8% 96.3% 82.9%(1) 95.8% 100.0% Hong Kong Mainland China Hong Kong Mainland China Overseas Reversion Rates Retail Retail -1.8% 11.1% Hong Kong Mainland China Overall Rental Collection Rates 98% 98% ~90% Hong Kong Mainland China Overseas Link
Slide 5: Integrating Our Ethos and Value Creation Model
5 Integrating Our Ethos and Value Creation Model WE LINK PEOPLE TO A BRIGHTER FUTURE Business as Mutual Identify areas of mutual need and co-create solutions to the benefit of all Vision 2025 Optimise portfolio value by Value Creation integrating culture of Create shared values across the excellence
Slide 6: Vision 2025 - Portfolio Growth
6 Vision 2025 - Portfolio Growth Achieve high single-digit CAGR Maintained high occupancy of Organic Portfolio >95% across portfolio Executed 4 acquisitions in Inorganic Drivers Mainland China (1) and overseas Maintained “A” credit ratings Financial Strength from S&P, Moody’s & Fitch Qibao Vanke Pla
Slide 7: Vision 2025 - Culture of Excellence
7 Vision 2025 - Culture of Excellence Become “employer of choice” No Layoff (1) Maintain Normalcy To provide job security >80% Satisfaction level from Amid Pandemic with our own staff survey resources(2) Human Resources Best Companies 3 Award Recognitions Bronze Awards to Work For in Asia-Pacific ST
Slide 8: Vision 2025 - Visionary Creativity
8 Vision 2025 - Visionary Creativity Placemaking through innovation By 2035 30% Net Zero Strategy Portfolio electricity Net zero target reduction by 2035 (1) 4% Energy Management 4 Target reduction in System Pilot properties energy consumption per year Energy generated 191,600 sqft equivalent to Sol
Slide 9: Operational Updates
02 Operational Updates
Slide 10: Diversified Asset Portfolio
10 Diversified Asset Portfolio (1) Total Portfolio Value HK$207B 3.9% 3.1% 13.7% Hong Kong 60.3% 3.8% 79.3% Mainland China 16.8% Overseas Temple Mall, Hong Kong Link Plaza · Guangzhou 100 Market Street, Sydney 15.2% 3.9% Hong Kong Mainland China Overseas 127 7 2 Hong Kong Retail Hong Kong Car park H
Slide 11: Hong Kong Retail and Office
11 Hong Kong Retail and Office Retail -4.5% 96.8% Revenue growth YoY Occupancy rate -1.8% -3.4% Average unit rent per Reversion rate (2) square foot (3) YoY Office 82.9%(4) Occupancy rate ▪ Revenue dipped mainly due to tenant support scheme ▪ Healthy levels of rental collection and arrears ▪ Slow bu
Slide 12: Hong Kong Retail Tenant Performance
12 Hong Kong Retail Tenant Performance Tenant Sales Growth (1) Occupancy Cost (3) Apr 20 – Mar 21 (Link) Apr 20 – Mar 21 (HK) Food & beverage Supermarket & foodstuff (2) General retail Overall 5.4% -2.7% 16.9% -9.4% 16.4% -14.5% -16.1% 14.1% -18.7% -17.6% -24.5% 10.4% (2) Food & beverage Supermarket
Slide 13: Hong Kong Car Park
13 Hong Kong Car Park -1.5% -1.8% -0.7% Revenue growth YoY Car park income per Average valuation space per month YoY per space YoY Lok Fu Place, Hong Kong Carpark ▪ Hourly parking was impacted by the partial lockdown in early 2020/2021 ▪ Usage has picked up once social distancing restrictions were r
Slide 14: Mainland China Retail and Office
14 Mainland China Retail and Office Retail -7.8% 96.3% 11.1% (2) Revenue Occupancy Reversion rate Office 95.8% -8.0% Occupancy rate Reversion rate (2) ▪ Retail revenue dropped due to partial closure and asset enhancement of Link CentralWalk in Futian, Shenzhen and COVID-19 related concessions ▪ Tena
Slide 15: Asset Enhancements
15 Asset Enhancements Completed Kai Tin in 2H 2020/21 Capex: HK$153M; ROI: 12.1% Completed 3 projects in 2020/21 Still achieved high-single to low-double-digit ROIs despite weak leasing market Underway 4 projects More prudent and flexible pipeline going forward Pipeline extending to 2026/27 onwards
Slide 16: Prudent Capital Management
16 Prudent Capital Management Ample Liquidity & Healthy Credit Metrics Staggered Debt Maturity Profile(2) (HK$’B) 2.66% Average borrowing costs 10.0 Medium Term Notes 83bp from 2019/2020 Convertible bonds (3) 1.4 Bank loans 8.1 7.7 5.5 4.0 18.4% HK$12.5B 5.8 0.1 Gearing ratio(4) Available liquidity
Slide 17: Strong Capital Access and Ongoing Sustainability Commitment
17 Strong Capital Access and Ongoing Sustainability Commitment Financing arranged since April 2020 Healthy Credit Ratings and Outlook April 2020 Issued HK$1.01B 5-year notes at 2.35% per annum A May 2020 Arranged HK$1B 5-year sustainability-linked loan S&P’s Stable June 2020 Arranged HK$1B 5-year su
Slide 18: Valuation
18 Valuation Valuation Capitalisation Rate ↑ 3.0% As at As at As at As at Mainly due to HK$’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 3.10% – 5.3
Slide 19: Way Forward
03 Way Forward
Slide 20: Overseas Offices
20 Overseas Offices Office 100 Market 100% The 100% Overall ~90% Office occupancy rate Cabot Office occupancy rate Rental collection rate Street ▪ New additions during the year with blue chip tenants and long WALE ▪ 100 Market Street and The Cabot commenced rental contribution since April 2020 and A
Slide 21: Happy Valley Shopping Mall - 7th Investment in Mainland China
21 Happy Valley Shopping Mall 7th Investment in Mainland China No. 36 Machang Road, Location Tianhe District, Guangzhou Completion 2012 (2) Monthly Passing Income RMB10.6 M Expected Completion of Acquisition June 2021 2nd Retail in ▪ Link's further investment in the Greater Bay Area Guangzhou ▪ Shor
Slide 22: Defensive Amid Challenging Environment
22 Defensive Amid Challenging Environment No.1 100% First REIT listed in Hong Kong Free float Resilient 1 Focus on non-discretionary Only internally-managed REIT retail, car parks and in Asia premium grade A offices Link Plaza · Guangzhou 15 years 31% Consistent track record in Female representation
Slide 23: Maintaining a Sustainable Business
23 Maintaining a Sustainable Business Business Proactive stakeholder As Mutual engagement to navigate in new normal Placemaking Create delightful Link CentralWalk to complete Welcomed >400 leases in our renovation by end of 2021 Hong Kong portfolio experiences for our community Value Continue to gro
Slide 24: Strong Capital Base to Fund Future Growth
24 Strong Capital Base to Fund Future Growth Funding Facilities • Maintain low gearing and sufficient debt headroom to support strategic goals Credit Ratings A • Continue to enjoy low funding cost Forex Management • Cost effective hedging to fund overseas investments and stable distributions Capital
Slide 25: Achieving Vision 2025
25 Achieving Vision 2025 • Focus on our organic portfolio Diversifying while remaining prudent and selective Balanced and managing our assets Pro-forma Management Portfolio strategically to enhance their Composition (1) Guidance quality and value Hong Kong 79.3% 70-75% • Target “core” & “core-plus”
Slide 26: Distribution Calendar
26 Distribution Calendar Distribution period October 2020 – March 2021 Last day of trading on a “cum” basis 28 June 2021 Ex-distribution date 29 June 2021 2 July – 5 July 2021 Distribution book close (both days inclusive) Record date for entitlement to distribution 5 July 2021 Ten trading days to de
Slide 27: Appendix
04 Appendix
Slide 28: Key Financial Data
28 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 29: Financials – Income Statement Summary
29 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 30: Financials – Distribution Statement Summary
30 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 31: Financials – Financial Position & Investment Properties
31 Appendix 4 Financials – Financial Position & Investment Properties Financial Position Summary As at As at As at HK$’M 31 Mar 2021 30 Sep 2020 31 Mar 2020 Total assets 209,885 203,186 207,619 Total liabilities 51,192 49,159 47,502 Non-controlling interest (27) 174 406 Net assets attributable to Un
Slide 32: Financials – Capital Management
32 Appendix 5 Financials – Capital Management Committed Debt Facilities (After Currency Swaps) HK$ 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 33: HK Portfolio – Retail Revenue Analysis
33 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 34: HK Portfolio – Car Park Revenue Analysis
34 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 35: HK Portfolio – Property Operating Expenses Analysis
35 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 36: HK Portfolio – Retail Portfolio Data
36 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 37: HK Portfolio – Retail and Car Park Portfolio Data
37 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 38: HK Portfolio – Retail Lease Expiry Profile
38 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 39: HK Portfolio – Trade Mix
39 Appendix 12 HK Portfolio – Trade Mix 7.1% 5 15.9% 2.1% 6 28.0% 5 8 0.8% 7.9% 4 1.0% 67 1 5.5% 5 1 10.1% 3 5 Retail Trade Mix Office Trade Mix 55.4% (by rent) (1) (by rent)(1) 1 10.6% 4 4 2 2 3 21.6% 17.4% 16.6% Retail Mar-21 Sep-20 Office Mar-21 Sep-20 1. Food and beverage 28.0% 27.6% 1. Finance
Slide 40: Mainland China Portfolio – Trade Mix
40 Appendix 13 Mainland China Portfolio – Trade Mix 3.2% 28.5% 4.4% 4 5 29.5% 6 1 1 3 39.6% Retail Trade Mix Office Trade Mix (by rent)(1) (by rent) (1) 28.0% 3.6% 5 4 2 10.3% 3 2 34.9% 3.5% 14.5% Retail Mar-21 Sep-20 Office Mar-21 Sep-20 1. Food and beverage 29.5% 28.2% 1. Professional services 39.
Slide 41: Overseas Portfolio – Tenant Mix
41 Appendix 14 Overseas Portfolio – Tenant Mix 4.1% 3.5% 3 15.3% 4 3 1 100 Market Street The Cabot 1 53.7% (by rent) (1) (by rent)(1) 53.3% 42.2% 2 2 27.9% 100 Market Street Mar-21 Sep-20 The Cabot Mar-21 Sep-20 1. Finance 53.3% 52.3% 1. Government 53.7% 54.2% 2. Government 27.9% 27.3% 2. Real estat
Slide 42: Mainland China Portfolio – Lease Expiry Profile
42 Appendix 15 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 43: HK Car Park Demand and Supply
43 Appendix 16 HK Car Park Demand and Supply No. of Registration of Vehicles and Parking Spaces (Private Cars) 689,474 CAGR 0.9% (1) 617,732 656,453 CAGR 3.7% (1) 421,062 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 1Q 2021 No. of private car parking spaces No. of registration of
Slide 44: Disclaimer
44 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. Neither
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