Link Reit should list a Singapore Reit on SGX soon
This might allow it to achieve a better trading multiple and grow its fund management business
The size of Hong Kong’s real estate investment trust (Reit) market pales in comparison with Singapore’s. However, Hong Kong-listed Link Reit is a leader in the Reit universe.
Managed by Link Asset Management, the Reit lays claim to being Asia’s largest by many measures, including asset value. The trust has been entirely owned by independent investors since listing in November 2005 as the first Reit in Hong Kong.
Starting with a portfolio of shopping centres and car parks in Hong Kong at the time of going public, Link Reit’s portfolio today includes retail facilities, car parks, offices and logistics assets which span Hong Kong, China, Australia, Singapore and the UK, with a total valuation of around HK$237 billion (S$40.7 billion) as at end-September 2024.
However, despite its size, high free float, inclusion in key stock indices, wide coverage by equities analysts and ample trading liquidity, the trust is trading poorly versus its book value.
Perhaps investors are wary of prospects for Hong Kong properties because of economic challenges facing the city. Amid retail headwinds in the territory, tenant sales at Link Reit’s Hong Kong retail spaces fell year on year for the six months ended Sep 30, 2024, while occupancy cost of retail tenants rose.
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