First Read Link Real Estate Investment Trust Disposal of 50% Stake in 100 Market Street, Sydney

Research evidence excerpt

First Read Link Real Estate Investment Trust Disposal of 50% Stake in 100 Market Street, Sydney

03/27E 2.54 2.50

and assumes a buyback yield of 6.3% based on our pro forma FY27 DPU forecast of HK

03/28E 2.55 2.52

$2.49.

03/29E 2.59 2.56

Proceeds will be used for unit buyback and HK retail AEI capex Mark Leung

In addition to buybacks, management indicated that part of the disposal proceeds will Analyst

mark.leung@ubs.combe allocated towards reinvestment in its existing Hong Kong retail portfolio, with a focus

+852-2971 8636

on asset enhancement initiatives (AEIs), tenant repositioning, and retail space

reconfiguration. Management noted that stabilizing retail rents in Hong Kong have John Lam, CFA

increased the attractiveness of reinvestment opportunities within the existing portfolio. Analyst

john-za.lam@ubs.comAt the same time, management sees limited acquisition opportunities across the region,

+852-2971 6358

with Singapore being one of the few markets that remains attractive due to favourable

yield spreads. Nevertheless, any acquisition must satisfy Link's investment hurdles and Vera Gong, CFA

exceed its cost of capital. Meanwhile, management confirmed that the disposal Analyst

vera.gong@ubs.com

processes for its mainland China logistics portfolio and London office assets remain

+852-2971 8950

ongoing. In Australia, management reiterated that it remains open to disposing of

additional non-core assets over time, including the IGO office portfolio.

Valuation:

Our DDM-based price target is based on 7.2% cost of equity and terminal yield of 5.1%.

Highlights (HK$m) 03/24 03/25 03/26 03/27E 03/28E 03/29E 03/30E 03/31E

Net rental income 10,070 10,619 10,230 10,198 10,211 10,334 10,445 10,524

EBITDA (UBS) 9,949 9,819 9,743 9,959 10,075 10,188 10,290 10,359