Link REIT (0823) Stabilization on the horizon, but valuation appears fair

研报英文原文证据摘录

Link REIT (0823) Stabilization on the horizon, but valuation appears fair

J P M O R G A N Asia Pacific Equity Research

29 May 2026

Link REIT (0823) Neutral

0823.HK, 823 HK

Stabilization on the horizon, but valuation appears fair Price (28 May 26):HK$40.30

▲Price Target (Jun-27):HK$42.00

Prior (Dec-26):HK$36.00

At the results briefing, management emphasized a “Back to Basics” strategy, with

a renewed focus on the core portfolio (i.e., HK retail), cost discipline, and capital Mainland China/Hong Kong Property

& Conglomeratesrecycling. We are encouraged by this direction (over “Link 3.0”). For HK retail,

Link REIT is seeing green shoots with tenant sales and spot rents stabilizing. Karl Chan AC

However, a high-single-digit % negative rental reversion will likely extend into (852) 2800-8513

karl.chan@jpmorgan.com

FY27E, and the threat of cross-border e-commerce remains. That said, with

expected cost savings of HK$200 million, we forecast the DPU Y/Y decline to Venus Choi

(852) 2800-8599

narrow from 7% in FY26 to 1% in FY27. Link REIT is now trading at 6.2% yield. venus.choi@jpmorgan.com

While this looks high compared to HK property peers (average: 4.1%), its 175bps

Jocelyn Gao

yield spread over the US 10-year treasury yield (~0.7 S.D. below historical (852) 2800-8529

average of 230bps) (Figure 9LinkREIT–DividendyieldspreadoverUS10-yeartreasurybondyield) appears to have already largely factored in the jocelyn.gao@jpmorgan.com

stabilization in tenant sales/spot rents. Looking beyond to FY28, we forecast a J.P. Morgan Securities (Asia Pacific) Limited/ J.P.

continually flattish DPU as the impact of negative rental reversion will still drag Morgan Broking (Hong Kong) Limited

down rental income, with uncertainty on staff costs after the new CEO onboards

(potentially in FY28).