Link Reit issues highest-ever interim dividend
Shares of the Link Real Estate Investment Trust rose to a record high yesterday as the company declared its highest-ever interim distribution of 71.08 HK cents.
Link Reit shares rose up to HK$39.70 before closing at HK$39.60, a gain of 2.19 per cent or 85 HK cents from Tuesday. The stock has jumped nearly 40 per cent this year.
The record high came as the trust - which owns 182 retail and car park properties, most of them formerly owned by the Hong Kong Housing Authority - announced its results for the six months to September.
Interim distributable income rose 14.4 per cent to HK$1.62 billion. The distribution per unit to shareholders increased 12.6 per cent to 71.08 HK cents, the highest since its listing.
Link Reit's reversion rate, or the change in rents between leases, reached 25.9 per cent for three-year leases on average that were signed in the six months. This equates to an increase of about 8.63 per cent in rents per year, compared with about 7 per cent for the full year last year.
"We look into our tenants' business every time we adjust the rent, and their sales rose 11.6 per cent in the last six months," chief executive George Hongchoy said.
"When we adjust our rent, we want a rate that they can afford."
The property trust's average monthly rent increased 3.9 per cent to HK$37.20 per square foot while revenue grew 10.7 per cent to HK$3.2 billion.
"The strong income growth rate for households living in public housing and consistent retail sales growth for daily necessities, together with the widening gap between prime shopping malls and Link Reit's malls, favour Link to raise its rental rates," said Patrick Wong, an associate director of property research at BNP Paribas Securities (Asia).