The Link Real Estate Investment Trust's distributable income for the year to March has increased by nearly a fifth on the back of strong consumer confidence and retail spending that boosted demand for retail space.
Distributable income rose 18.9 per cent to HK$2.92 billion. This resulted in a 17.3 per cent jump in total distribution per unit - dividends paid by reits - to 129.52 HK cents for the full year, including a final distribution of 66.41 HK cents for the second half.
'It's slightly better than expected, as the distribution per unit is 1-2 per cent higher than our forecast of 127 HK cents,' said Jeff Yau Check-man, analyst at DBS Vickers Hong Kong.
The property trust, which owns 182 retail and car park properties - most of them formerly owned by the Hong Kong Housing Authority - said revenue jumped 10.8 per cent to more than HK$5.93 billion. Net property income rose 14.8 per cent to nearly HK$4.19 billion.
Link Reit chief executive George Hongchoy said the trust last year achieved a 'reversion rate' of 21.7 per cent for three-year leases on average, translating into an increase of about 7 per cent in rents per year.
'This is just slightly above the inflation rate, while our tenants' revenue surged by about 10 per cent last year. Therefore, they can still afford the increase,' Hongchoy said. However, he refused to forecast the reversion rate for this year.