Link Real Estate Investment Trust (823) H1 2025 earnings summary

Executive summary

• Achieved solid financial results with revenue up 6.4% to HK$7,153M and NPI up 5.8% to HK$5,359M, driven by acquisitions, especially Link Plaza Qibao, and improved performance across APAC markets.

• Distribution per unit increased 3.7% to HK$1.3489, while NAV per unit declined 4.6% to HK$66.80 due to asset valuation decreases from cap rate expansion.

• Maintained a strong balance sheet with net gearing at 20.6% and ample liquidity of HK$11.7B, supporting future growth and resilience.

• Portfolio diversification and operational excellence remain central, with all major markets contributing to growth and a focus on resilience through the Link 3.0 strategy.

Financial highlights

• Revenue: HK$7,153M (+6.4% YoY); NPI: HK$5,359M (+5.8% YoY); DPU: HK$1.3489 (+3.7% YoY); distributable amount: HK$3,476M (+4.3% YoY).

• Net asset value per unit: HK$66.80 (down 4.6% YoY); net assets attributable to unitholders: HK$172,133M.

• Net gearing: 20.6%; average all-in borrowing cost: 3.69%; EBITDA interest coverage: 4.8x; fixed-debt ratio: 66.4%.

• Portfolio value declined by 2.1% half-on-half to HK$231,128M, mainly due to cap rate expansion.

• NPI margin (Hong Kong): 76.5%.

Outlook and guidance

• Macroeconomic uncertainty persists due to demographic, geopolitical, and technological shifts, with gradual and uncertain global interest rate cuts.

• Hong Kong and China stimulus measures, as well as policy easing, may support recovery; APAC markets show signs of stabilisation.

• Diversification and active management to continue, with focus on accretive investments in Australia, Japan, and Singapore.

• Rental reversions in Hong Kong expected to deteriorate in the second half, with focus on maintaining high occupancy.