Link Real Estate Investment Trust · HKEX:823
Link Real Estate Investment Trust — FY2021/22 Earnings Presentation
56 slides from Link Real Estate Investment Trust's earnings presentation, Jun 1, 2022
Slide 1: Annual Results Analyst Presentation 2021/2022
Annual Results Analyst Presentation 2021/2022 1 June 2022
Slide 2: 2021/2022 Highlights
2021/2022 Highlights
Slide 3: Resilient Financial Performance
3 Resilient Financial Performance United Mainland Australia Hong Kong Kingdom China HK$11,602M HK$8,776M REVENUE +8.0% YoY NPI +6.5% YoY (1) HK$3.0567 HK$77.10 DPU +8.2% YoY (2) NAV per unit +1.1% YoY ▪ Link’s diversified portfolio coupled with active asset (1) (2) (3) (4) management delivered a cre
Slide 4: Robust Operational Performance
4 Robust Operational Performance Occupancy Reversion Retail Retail Office (1) 97.7% 92.3% +4.8% +8.8% -8.1% Hong Kong Mainland China Hong Kong Mainland China Mainland China Office Rental Collection Sau Mau Ping Shopping Centre (2) Hong Kong 96.6% 97.0% 98% 97% Hong Kong Mainland China Hong Kong Main
Slide 5: Proactive Responses to Fifth Pandemic Wave in Hong Kong
5 Proactive Responses to Fifth Pandemic Wave in Hong Kong Responses and priorities for resilience and long-term sustainability ✓ Tenant Support Scheme subsequently upsized to ~HK$220M from HK$120M in view of the prolonged disruption ✓ Amount expected to be sufficient at this stage ✓ Gradual relaxati
Slide 6: Strengthening Portfolio with Diversification
6 Strengthening Portfolio with Diversification 2005 2022 151 investments across sectors & locations ~HK$36B Hong Kong CHINA retail and HONG KONG 74.8% Hong Kong 53.9% 17.6% 3.3% car park Car park Office Retail assets & related (1) business(2) HK$228B 17.4% 13.1% 3.0% 1.3% Portfolio value 2015 Beijin
Slide 7: Vision 2025 Achievement – Portfolio Growth
7 Vision 2025 Achievement – Portfolio Growth Achieving high single-digit CAGR in AUM while growing DPU and maintaining strong credit ratings Organic Portfolio Inorganic Drivers Financial Strength High occupancy of >90% (1) 17 investments (2) “A” credit ratings from S&P, across portfolio in spite of
Slide 8: Vision 2025 Achievement – Culture of Excellence
8 Vision 2025 Achievement – Culture of Excellence Become “employer of choice” Preparing for next phase of growth ✓ Strengthened ✓ Established group leadership bench organisation structure strength at group level with new leaders(1) ✓ Undertook in-depth bringing in additional review of our capabiliti
Slide 9: Vision 2025 Achievement – Visionary Creativity
9 Vision 2025 Achievement – Visionary Creativity Placemaking through innovation Continue to progress towards 2035 Net Zero Target ↓467tonnes (4) Carbon Emission ✓ Ceased distribution of single-use plastic umbrella bags Through collection of across our 75 shopping centres (1) 934 tonnes of organic wa
Slide 10: Operational Updates
02 Operational Updates
Slide 11: Hong Kong Retail
11 Hong Kong Retail Retail +2.7% 97.7% FY2021/22 NEW OFFERINGS Revenue growth YoY Occupancy rate Impressive number of new leases despite COVID challenges and uncertainties +4.8% +0.5% Food and beverage Average unit rent per square Reversion rate (2) 6.1% foot (3) YoY 7.7% 20.5% Services Supermarket
Slide 12: Hong Kong Office
12 Hong Kong Office Office (1) 96.6% Occupancy rate ▪ Encouraging leasing progress with committed occupancy rate of the office tower improving to 96.6% ▪ “Flight-to-quality” trend expected to prevail benefitting The Quayside with its best‐in‐class building specifications and accredited green feature
Slide 13: Resilient Hong Kong Retail Tenant Performance
13 Resilient Hong Kong Retail Tenant Performance Tenant Sales Growth (1) Occupancy Cost (3) Apr 21 – Mar 22 (Link) Apr 21 – Mar 22 (HK) Food & beverage Supermarket & foodstuff (2) General retail Overall 16.6% 13.8% 10.3% 7.8% 5.9% 14.6% 6.9% 14.4% 13.1% -2.3% -3.3% 10.7% (2) Food & Supermarket & Gen
Slide 14: Hong Kong Car Park and Related Business
14 Hong Kong Car Park and Related Business Car Park and Related Business Hing Wah +13.2% +10.4% ~HK$607k Hong Kong Car park income per Average car park Revenue growth YoY space per month YoY valuation per space ▪ Revenue growth was fuelled by the addition of 2 institutional grade car park/car servic
Slide 15: Mainland China Retail and Office
15 Mainland China Retail and Office Retail Office +24.4% 92.3% +8.8% 97.0% -8.1% Revenue growth YoY Occupancy rate (2) Reversion rate (3) Occupancy rate Reversion rate (3) ▪ Our five wholly-owned shopping malls delivered promising reversion at 8.8% despite market turmoil ▪ JV Qibao Vanke Plaza (4) r
Slide 16: Mainland China Logistics
16 Mainland China Logistics Donguan Property Dongguan Foshan 100% 2.5 years 100% 3.4 years Occupancy WALE Occupancy WALE ▪ Acquisition of a 75% interest in two recently-developed modern warehouses situated in highly sought-after logistic hubs in Greater Bay Area, Dongguan and Foshan, was completed i
Slide 17: Overseas Offices
17 Overseas Offices Office 100% Office occupancy rate 97% Rental collection rate >7 years 100 Market Street, Sydney The Cabot, London 100 Market Street WALE ▪ Full year contribution from 100 Market Street and The Cabot ▪ Positive outlook with reopening and return of office workers, coupled with >9 y
Slide 18: Asset Enhancement Programme
18 Asset Enhancement Programme Link CentralWalk - 1st AE in Mainland China Target Estimated CAPEX RMB 286M ROI 11.0% Underway Completion Costs Date Tai Yuen Market $22M Mid 2022 Lok Fu Market $32M Mid 2022 Tak Tin Market $73M Mid 2022 Under planning >$1.0B ▪ While return of Link CentralWalk was affe
Slide 19: Transformation of Link CentralWalk
19 Scan QR Code or Transformation of Link CentralWalk click here to view virtual tour G/F Southeast Entrance – Enhanced ambience Main Atrium – Ideal for events Before After Before After East Piazza – A new leisure space UG/F Arcade – Improved circulation Before After Before After
Slide 20: Happy Valley Asset Enhancement Update
20 Happy Valley Asset Enhancement Update Work Scope To capture the spending from middle-income households that is underserved in Tianhe and Zhujiang New Town ▪ Re-position and rebrand under Link Plaza series ▪ Unlock value from the vacant department store space Rendering of facade ▪ Improve the visi
Slide 21: Prudent Capital Management
21 Prudent Capital Management Strong capital base and liquidity Active debt management (2) (61.4%) HK$ billion Medium Term Notes Convertible Bond Bank Loans 2.3% Average borrowing costs 8.9 9.4 8.3 2.0 7.7 7.9 6.7 4.5 0.8 1.7 0.1 22.0% HK$25.5B 3.2 8.3 6.6 5.8 6.2 1.2 6.6 Gearing ratio(3) Available
Slide 22: Favourable Capital Access and Value Creation
22 Favourable Capital Access and Value Creation Financing arranged since October 2021 Apr-May • A$600M 5Y loan facilities ▪ Distribution reinvestment scheme: 2022 • A$500M bridge loan facility ~HK$1,267M of cash distribution was Mar 2022 • 4Y & 5Y sustainability-linked HK$12B syndicated loan reinves
Slide 23: Valuation Backed by Portfolio Resilience
23 Valuation Backed by Portfolio Resilience Valuation Capitalisation rate As at As at As at As at HK$’M 31 Mar 2022 31 Mar 2021 31 Mar 2022 31 Mar 2021 Hong Kong Retail properties 122,878 124,581 3.10% – 4.50% 3.10% – 4.50% ↑ 4.1% Hong Kong Car parks and related Due to addition in car park related 4
Slide 24: Strategies and Priorities
03 Strategies and Priorities
Slide 25: Delivering on Growth and Diversification
25 Delivering on Growth and Diversification Steady pace of acquisition totalled ~HK$26B (1) Apr 21 PRC Jun 21 PRC Oct 21 PRC Dec 21 HK - Qibao Vanke Plaza, - Happy Valley Shopping Mall, - Two Logistic Assets in GBA (2) - Two Institutional Grade Car Park/Car Shanghai (50% interest) Guangzhou (75% int
Slide 26: Tapping into Growing Logistics Sector in Mainland China
26 Tapping into Growing Logistics Sector in Mainland China Jiaxing Asset Changshu North Asset Changshu South Asset Agreed Property Value RMB 1,106M Changshu North Changshu South Jiaxing Asset Asset Asset ▪ Acquired 3 new modern Land Tenure 50 years expiring in 50 years expiring in 50 years expiring
Slide 27: Acquiring Landmark Australian Retail Assets
27 Acquiring Landmark Australian Retail Assets 50% interest in three retail properties Agreed Portfolio Value Property Sydney A$538.2M (1) ➢ The Strand Arcade ➢ Queen Victoria Building The Strand Arcade ➢ The Galeries Partner Net passing A$29.8M (1) Vicinity Income Leading Australian retail operator
Slide 28: Deepening in Australia with Prime Grade Office Assets
28 Deepening in Australia with Prime Grade Office Assets 151 Clarence St 126 Phillip St Joint venture in a prime office portfolio Agreed Portfolio Value Sydney Melbourne ➢151 Clarence St ➢ 567 Collins St A$1,131.1M (1) Property ➢126 Phillip St ➢388 George St 347 Kent St 388 George St ➢ 347 Kent St P
Slide 29: Driving Value from Our Platform
29 Driving Value from Our Platform BUILDING ON Resilient, non-discretionary STRATEGICALLY Implement asset management portfolio to navigate through and enhancement plans to economic cycles address evolving operating landscape OPERATING Under business as mutual CONTINUING TO Create delightful experien
Slide 30: Maintaining Financial Strength For Growth
30 Maintaining Financial Strength For Growth PRUDENT CAPITAL MANAGEMENT RETURNING TO • Well managed maturity profile UNITHOLDERS • Capacity to support strategic and opportunistic goals • ~60% of debt portfolio with interest rates hedged • 2H 2021/2022 Discretionary distribution of HK7 cents will be
Slide 31: Executing Vision 2025 Strategy Steadily
31 Executing Vision 2025 Strategy Steadily CURATING A PRODUCTIVE PORTFOLIO UNDERPINNED BY ORGANIC GROWTH 60-70% 20-25% 10-15% ~70% • Organic portfolio remains core to support growth HONG KONG MAINLAND OVERSEAS RETAIL & CHINA CAR PARK (1) and long term value creation … ALONG THE THREE AXES SUPPLEMENT
Slide 32: Growing Beyond with Strength and Resilience
32 Growing Beyond with Strength and Resilience THREE PILLARS TO DRIVE LONG-TERM GROWTH PROVEN TRACK RECORD OF VALUE CREATION ~15% compound annual total unitholder return since IPO (3) (1) (1) Asset 97.7% 98% 900 Management Retail occupancy Rental collection 800 700 600 (2) Link Capital 22.0% A 500 M
Slide 33: Our Sustainable Growth Journey
33 Our Sustainable Growth Journey Link Today Link Tomorrow ➢ Largest REIT in Asia ➢ To be a leading global REIT in terms of market capitalisation ➢ To achieve financial target of ➢ ~15% compound annual total high single-digit CAGR in AUM unitholder return since public listing set under Vision 2025 i
Slide 34: Distribution Calendar
34 Distribution Calendar Distribution period October 2021 – March 2022 Last day of trading on a “cum” basis 15 June 2022 Ex-distribution date 16 June 2022 20 June – 23 June 2022 Distribution book close (both days inclusive) Record date for entitlement to distribution 23 June 2022 Ten trading days to
Slide 35: Appendix
04 Appendix
Slide 36: We Link People to a Brighter Future
Appendix 1 We Link People to a Brighter Future Starting in 2005, Link transformed from an Vision To be a world class real estate investor and manager, serving and improving the lives of those around us investor and manager of community shopping centres and car parks in public Building relationships
Slide 37: Our Unique Characteristics
37 Appendix 2 Our Unique Characteristics Track record of operational Strong financial position and √ stability through economic cycles prudent management to fulfil and challenges, occupancy strategic needs with low reaching a high level of 97.7% (1) borrowing cost at 2.3% Long-term sustainable growt
Slide 38: Key Financial Data
38 Appendix 3 Key Financial Data Percentage contribution Year ended FY 21/22 FY 20/21 YoY 31 Mar 2022 Consolidated HK$’M HK$’M % % Revenue 11,602 10,744 +8.0 - Net property income 8,776 8,238 +6.5 - Rentals Hong Kong retail properties 6,223 6,159 +1.0 53.6 Hong Kong car parks and related business 2,
Slide 39: Financials – Income Statement Summary
39 Appendix 4 Financials – Income Statement Summary Year ended Year ended 31 Mar 2022 31 Mar 2021 YoY HK$’M HK$’M % Revenue(1) 11,602 10,744 +8.0 Property operating expenses (2,826) (2,506) +12.8 Net property income 8,776 8,238 +6.5 General and administrative expenses (512) (428) +19.6 Interest inco
Slide 40: Financials – Distribution Statement Summary
40 Appendix 5 Financials – Distribution Statement Summary Year ended Year ended 31 Mar 2022 31 Mar 2021 YoY HK$’M HK$’M % Profit for the year, before transactions with Unitholders 6,894 1,185 +481.8 attributable to Unitholders Change in fair values of investment properties and (714) 4,910 -114.5 imp
Slide 41: Financials – Financial Position & Investment Properties
41 Appendix 6 Financials – Financial Position & Investment Properties Financial Position Summary As at As at As at HK$’M 31 Mar 2022 30 Sep 2021 31 Mar 2021 Total assets 225,716 217,895 209,885 Total liabilities 62,726 54,828 51,192 Non-controlling interest 302 27 (27) Net assets attributable to Uni
Slide 42: Financials – Capital Management
42 Appendix 7 Financials – Capital Management HK$ B % Committed Debt Facilities Mar-22 Sep-21 Mar-22 Sep-21 HK$ Bank loans 11.3 9.8 22.5 23.1 RMB Bank loans 3.6 3.6 7.2 8.5 AUD Bank loans 4.0 3.7 8.0 8.7 GBP Bank loans 3.8 3.8 7.5 8.9 HK$ Medium Term Notes 21.5 16.5 42.8 38.8 RMB Medium Term Notes 2
Slide 43: HK Portfolio – Retail Revenue Analysis
43 Appendix 8 HK Portfolio – Retail Revenue Analysis Percentage contribution Year ended Year ended Year ended 31 Mar 2022 31 Mar 2021 YoY 31 Mar 2022 (HK$’M) (HK$’M) % % Retail rentals: Shops (1) 4,919 4,881 +0.8 69.4 Markets / cooked food stalls 977 954 +2.4 13.8 Education / welfare and ancillary 1
Slide 44: HK Portfolio – Car Park and Related Business Revenue Analysis
44 Appendix 9 HK Portfolio – Car Park and Related Business Revenue Analysis Percentage contribution Year ended Year ended Year ended 31 Mar 2022 30 Mar 2021 YoY 31 Mar 2022 (HK$’M) (HK$’M) % % Rental income: Monthly car park 1,517 1,432 +5.9 71.0 Hourly car park 561 451 +24.4 26.2 (1) Car park and r
Slide 45: HK Portfolio – Property Operating Expenses Analysis
45 Appendix 10 HK Portfolio – Property Operating Expenses Analysis Percentage contribution Year ended Year ended Year ended 31 Mar 2022 31 Mar 2021 YoY 31 Mar 2022 (HK$’M) (HK$’M) (%) (%) Property managers’ fees, security 599 592 +1.2 26.7 and cleaning Staff costs (1) 460 367 +25.3 20.5 Repair and m
Slide 46: HK Portfolio – Retail Portfolio Data
46 Appendix 11 HK Portfolio – Retail Portfolio Data Retail properties Retail Average monthly No. of Total area Valuation rentals unit rent (1) Occupancy rate properties (’000 sq. ft.) (HK$’M) (HK$’M) (HK$ psf) (%) As at As at As at Year ended As at As at As at As at 31 Mar 31 Mar 31 Mar 31 Mar 31 Ma
Slide 47: HK Portfolio – Retail and Car Park and Related Business Portfolio Data
47 Appendix 12 HK Portfolio – Retail and Car Park and Related Business Portfolio Data As at As at 31 Mar 2022 31 Mar 2021 Change Average monthly unit rent (psf pm)(1) ◼ Shops HK$61.2 HK$61.2 - ◼ Overall (ex self use office) HK$62.7 HK$62.4 +0.5% Occupancy rate ◼ Shops 98.1% 97.0% +1.1% ◼ Markets/coo
Slide 48: HK Portfolio – Retail Lease Expiry Profile
48 Appendix 13 HK Portfolio – Retail Lease Expiry Profile (1) As % of total area As % of monthly rent As at 31 March 2022 % % FY22/23 31.4 34.1 FY23/24 26.2 28.5 FY24/25 22.6 19.9 FY25/26 and beyond 10.4 9.7 Short-term lease and vacancy 9.4 7.8 Total 100.0 100.0 Note : (1) Refers to base rent (exclu
Slide 49: HK Portfolio – Trade Mix
49 Appendix 14 HK Portfolio – Trade Mix 3.6% 15.4% 13.7% 27.9% 6 7 8 0.7% 1.9% 1.0% 67 1 5 5.4% 5 1 6.9% 48.3% 4 5 Retail Trade Mix Office Trade Mix (by rent) (1) (by rent)(1) 1 10.7% 4 3 10.5% 4 2 22.1% 2 3 16.8% 15.1% Retail Mar-22 Sep-21 Office Mar-22 Sep-21 1. Food and beverage 27.9% 27.9% 1. Fi
Slide 50: HK Car Park Demand and Supply
50 Appendix 15 HK Car Park Demand and Supply No. of Registration of Vehicles and Private Car Demand and Supply (YoY) Parking Spaces (Private Cars) 693,779 5.4% 632,824 3.1% 656,973 2.7% 2.0% 2.3% 1.5% 1.2% 1.3% 1.4% 0.5% 0.8% 0.6% 0.8% -0.2% 449,400 2015 2016 2017 2018 2019 2020 2021 No. of private
Slide 51: Mainland China Portfolio – Trade Mix
51 Appendix 16 Mainland China Portfolio – Trade Mix 3.5% 5.1% 6 5 36.2% 4 3 30.2% 21.8% 1 29.6% Office Trade Mix Retail Trade Mix (by rent)(1) (by rent) (1) 1 5 2 18.0% 4 3 2 5.7% 31.6% 13.3% 5.0% Retail Mar-22 Sep-21 Office Mar-22 Sep-21 1. Food and beverage 30.2% 31.4% 1. Professional services 21.
Slide 52: Mainland China Portfolio – Lease Expiry Profile
52 Appendix 17 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 2022 (%) (%) (%) (%) FY22/23 24.4 29.8 38.2 41.4 FY23/24 13.0 20.6 17.5 19.2 FY24/25 13.2 25.9 15.7 16.3 FY25/26 and bey
Slide 53: Overseas Office Portfolio – Tenant Mix
53 Appendix 18 Overseas Office Portfolio – Tenant Mix 4.1% 12.4% 3 3 1 100 Market Street 53.7% 30.5% The Cabot 1 57.1% (by rent)(1) (by rent) (1) 2 2 42.2% 100 Market Street Mar-22 Sep-21 The Cabot Mar-22 Sep-21 1. Government 53.7% 53.7% 1. Finance 57.1% 57.1% 2. Real estate 42.2% 42.2% 2. Governmen
Slide 54: Expanded Management Bandwidth to Capture Growth Opportunities
54 Appendix 19 Expanded Management Bandwidth to Capture Growth Opportunities Greg Chubb Ronald Tham Kenny Lam Zhu Haiqun Chief Operating Chief Corporate Chief Investment Managing Director Officer – Development Officer Officer (Strategic Mainland China International Investment) We continuously evalua
Slide 55: Our Strategic Investment Partners
55 Appendix 20 Our Strategic Investment Partners Welcomed 6 out of 7 strategic partners in 2021/2022 First Priority Group Fujian Dongbai Group Investa Nan Fung Group Oxford Properties Group Vanke Vicinity
Slide 56: Disclaimer
56 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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