Link Real Estate Investment Trust (823) H1 2026 earnings summary

Executive summary

• Delivered resilient results amid macroeconomic and market challenges, with revenue for the six months ended 30 September 2025 at HK$7,023 million, down 1.8% year-over-year, and net property income decreasing 3.4% to HK$5,178 million due to negative rental reversions in Hong Kong and the Chinese Mainland.

• Operational efficiency initiatives and cost management targeted annualized savings of over HKD 200 million, supporting resilience.

• International retail and car park segments remained strong, offsetting softness in Hong Kong and Chinese Mainland retail.

• CEO transition underway, with interim management in place and a global search for a new leader ongoing.

• Expansion of real estate investment management, with the launch of Link Real Estate Partners (LREP) and close to $1 billion in third-party capital managed.

Financial highlights

• Net property income declined 3.4% year-over-year to HK$5,178 million; revenue down 1.8% to HK$7,023 million.

• Distribution per unit fell 5.9% to HK126.88 cents; total distributable amount down 5.6% to HK$3,283 million.

• Portfolio valuation at HKD 223 billion as of September 2025, down 1.3% from six months prior.

• Net gearing at 22.5%, with average borrowing cost reduced to 3.22%.

• Ample liquidity of HK$9.4 billion and strong credit ratings (A2/A/A from Moody’s/S&P/Fitch).

Outlook and guidance

• Negative rental reversions in Hong Kong and the Chinese Mainland expected to persist in the short term, with operating conditions likely to worsen slightly before bottoming out.

• Gradual recovery anticipated, supported by market stabilisation, rising consumer confidence, and potential US interest rate cuts.

• Continued focus on cost restructuring, operational efficiency, and supplier collaboration to preserve margins.

• Non-discretionary retail and car park assets anticipated to remain resilient.

• Optimism for retail sector recovery driven by rising incomes, lower interest rates, and improving sentiment.