LINK REIT (00823) tumbled more than 6% in afternoon trading, falling 6.22% to HK$38.88 with a turnover of HK$776 million by press time. The decline followed the company's release of interim results for the period ending September this year, showing a 5.6% year-on-year decrease in distributable amount to HK$3.283 billion and a 5.9% drop in distribution per unit to 126.88 cents.
Revenue declined 1.8% year-on-year to HK$7.023 billion, while net property income fell 3.4% to HK$5.178 billion, primarily due to negative rental reversion rates in both Hong Kong and mainland China, reflecting macroeconomic pressures and retail sector challenges. LINK REIT also stated it has not yet entered into any binding agreement regarding the acquisition of Australian shopping center interests.
Morgan Stanley had earlier reported rumors that LINK REIT planned to invest A$1.5 billion to acquire 50% stakes in three shopping centers: Sunshine Plaza in Queensland, Macarthur Square in New South Wales, and Lakeside Joondalup in Western Australia. The bank estimated the potential investment could yield approximately 5.4%, higher than the company's FY2025 effective borrowing rate of 3.6% and the Reserve Bank of Australia's cash rate of 3.6%. The acquisition was projected to increase the company's gearing ratio by about 4.6 percentage points.
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