3 Things Investors Should Know Before Buying Link REIT’s Stock

I think that Link Real Estate Investment Trust (SEHK: 823) looks like a good REIT to hold for the long term. Here’s why. –

Link Real Estate Investment Trust (SEHK: 823), also known as Link REIT, is the largest REIT in Asia by market capitalisation.

The REIT manages a diversified portfolio comprising retail facilities, car parks, and offices.

In this article, I’ll share a few useful informational points about the REIT, which should give investors a good overview of the REIT and whether it’s worth investing in.

Overview of portfolio

Source: Link REIT’s Investor Presentation

The above presentation slide gives us a quick summary of Link REIT’s business.

Overall, the REIT generates about 86% of its income from Hong Kong properties and the remaining 14% from Mainland China and Australia’s investments.

The bulk of its income (75%) are from retail-related properties, while car park and office properties account for 16% and 9%, respectively.

Digging a little further, I also learned that its retail segment generates more than half of its rental income from food-related businesses, which as a segment is more resilient to the disruption of e-commerce activities.

Latest full-year performance

The next aspect that I’ll look at is Link REIT’s latest performance for the year ended 31 March 2020.

Source: Link REIT’s Investor Presentation

There are a few points worth mentioning here. To start with, the REIT reported solid numbers with improvement across most financial metrics, as we can see from the slide above.

Such performance was commendable considering the challenges that the REIT had to face, which include the year-long protests and also the Covid-19 outbreak.

Operationally, occupancy rates remained high across the board (96.5% for Hong Kong and 97.8% for mainland China) while rental reversion rates improved by double digits for retail properties in Hong Kong and Mainland China.

Overall, it was a solid performance amid a challenging year.

Strong balance sheet

Last but not least, investors should also note that Link REIT has a strong balance sheet as of 31 March 2020. Readers can see the details below.

Source: Link REIT’s Investor Presentation

Not only did Link REIT keep its gearing low but it also diversified the borrowings into multiple currencies, as well as a mix of fixed and variable debts.

Moreover, the average debt maturity of 4.0 years allows the company plenty of flexibility to overcome any temporary challenges post by the COVID-19 outbreak.

Foolish conclusion

There you go, that was a quick overview of Link REIT’s business.

Investors who find the REIT attractive can take the next step to learn more about this REIT, focusing on areas such as new property acquisitions, asset enhancement initiatives, and more.

More reading

The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Hong Kong contributor Lawrence Nga doesn’t own shares in any companies mentioned.

The Motley Fool Hong Kong Limited( 2020

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!