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Link REIT: No short-term plans to sell assets due to 'robust' funds

Hong Kong-listed Link Real Estate Investment Trust said it has no plans to sell noncore assets in the near future after it disposed of 17 Hong Kong shopping malls for HK$23 billion in 2017.

"Our funding position is very robust at the moment... We are not in a position where we are looking at further disposals," Chairman Nicholas Allen said at Link REIT's annual results briefing June 6.

Link said the same day that its total distributable income increased by 5.8% year over year for the fiscal year ended March 31 to HK$5.28 billion. Its total distribution for the year reached 249.78 cents per unit, marking a 9.4% rise from 228.41 cents per unit in the year-ago period.

On the topic of Hong Kong's retail market, Link CEO George Hongchoy said market confidence was recovering and lease negotiations with their tenants are moving faster.

"We believe lease renewals will be satisfactory and [rents] will see a certain increase," Hongchoy said, but added that the rebound in rental rates from assets in Link's portfolio may be slower than the market average because its shopping centers mainly focus on selling daily necessities rather than costlier luxury goods.

Its new shopping mall, T.O.P., in Hong Kong's Mong Kok district in Kowloon — set to open mid-2018 — has about 70% of its available space already pre-leased or under advanced talks as at March 31, the REIT said in an annual results filing.

Wang said rents at T.O.P.'s retail units are slightly lower than expected, but added that the trust has received more inquiries in recent weeks as the mall's opening approaches.

Link's Hong Kong retail rentals recorded a 5.3% year-over-year growth during the fiscal period. Its average monthly unit rental level climbed 12.8% to HK$62.40 per square foot as at March 31.

Rental income from car parks also grew 5.5% in the same period. Monthly car park income per lot jumped 11.3% from the year-prior period and the company expects demand for parking lots to remain strong.

Link also said it would buy back up to 80 million of its units in the next few months to "neutralize losses in distribution from divestments." The REIT spent HK$4.35 billion to repurchase 64.5 million units during the fiscal year ended March 31.