Link Real Estate Investment Trust : Final Results Announcement for the Year Ended 31 March 2017

The Securities and Futures Commission of Hong Kong, Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

(a collective investment scheme authorised under section 104

of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong))

The board of directors (the Board) of Link Asset Management Limited (the Manager), as manager of Link Real Estate Investment Trust (Link), is pleased to report to unitholders (the Unitholders) the audited consolidated final results of Link and its subsidiaries (the Group) for the year ended 31 March 2017.

The final results and the consolidated financial statements of the Group for the year ended 31 March 2017, after review by the audit and risk management committee of the Manager (the Audit and Risk Management Committee), were approved by the Board on 7 June 2017.

OVERALL FINANCIAL RESULTS

During the year, revenue and net property income increased by 5.9% and 7.4% year-on- year to HK$9,255 million (2016: HK$8,740 million) and HK$6,994 million (2016: HK$6,513 million), respectively. Distribution per unit (DPU) for the year increased by 10.8% to HK228.41 cents (2016: HK206.18 cents), comprising an interim DPU of HK111.75 cents (2016: HK98.99 cents) and a final DPU of HK116.66 cents (2016: HK107.19 cents). The total DPU represents a distribution yield of 4.2% based on the closing market price of the units of HK$54.45 on 31 March 2017. As a result, Link delivered a total return (including unit price appreciation and distribution yield) of 23.3% for the year.

Valuation of the investment properties portfolio (including property under development and renovation and properties in Mainland China) continued to improve and reached HK$174,006 million, representing an increase of 8.3% compared to 31 March 2016. Net asset value per unit grew 10.0% year-on-year to HK$62.47 (31 March 2016: HK$56.79).

MANAGEMENT DISCUSSION AND ANALYSIS

Our four strategic priorities continued to guide us in delivering better returns for our stakeholders and moving us towards the vision of becoming a world class real estate investor and manager serving and improving the lives of those around us. During the year, we strengthened our operational platform through our growth drivers, practised a prudent capital management strategy and supported the growth of our staff, tenants and communities.

Building a More Productive and Higher Quality Portfolio

Improving our portfolio quality allows us to sustain growth and long-term value. With a portfolio of over 150 properties (with over 11,000 tenancies) in Hong Kong, and three properties in Mainland China, we provide a strong platform for our tenants to flourish. During the year under review, we maintained high occupancy and our tenants' sales outperformed the overall Hong Kong retail market and we continued to enhance our portfolio by our asset management know- how through our proven business growth drivers - management, enhancement, acquisition, disposal and development.

Management of our properties is our key growth driver. Through the asset management knowledge we gained over the decade, we continue to enhance our tenant mix, provide more and better retail offerings to shoppers and drive operational efficiency.

Leveraging on our asset management expertise, we rolled out our asset management model in April 2016. A dedicated team of experienced asset managers was established to drive customer focus and enhance productivity and financial returns on assets. Each asset manager has direct responsibility for the overall performance of the portfolio of assets assigned to him or her and coordinates leasing, property and customer services in a holistic approach for good customer experience and operational efficiency. This asset management expertise build-up drives asset performance and brings long-term value and growth. We will expand coverage of the model to over 40 retail properties under nine clusters and plan to extend the holistic asset management approach to the entire portfolio for better operational and financial performance.

Hong Kong Portfolio Retail

The Hong Kong retail market was challenging during the year. However, our portfolio continued to show resilience given our focus on mass market non-discretionary trades. Occupancy rate for the portfolio stood at 96.1% as at 31 March 2017. Reversion rate for the year remained strong at 23.8%, while retail rental recorded a 4.2% increase year-on-year. Average monthly unit rent improved from HK$50.0 psf as at 31 March 2016 to HK$55.3 psf as at 31 March 2017.

(1) Total excluding self use office.

Starting last year, we categorised our properties into three segments to better define the property management strategy and allocation of resources - Destination, Community and Neighbourhood - all of which demonstrated steady growth in the past year.

Destination Community Neighbourhood 700 Nathan

Road (3)

14 properties

disposed (4)

Notes:

(1) Average monthly unit rent represents the average base rent plus management fee per month per square foot of leased area.

(2) psf means per square foot.

(3) The acquisition of 700 Nathan Road was completed on 15 April 2016. Income above was derived from street shops from acquisition of the property to their leases expiry in November 2016. As at 31 March 2017, the tower and podium were vacant due to renovation.

(4) Represents revenue up to completion of disposals of the 14 properties in May 2016 and February 2017.

(As at 31 March 2017)

% %

2017/2018 28.4 30.7

2018/2019 28.0 26.8

2019/2020 and Beyond 32.7 36.1

Short-term Lease and Vacancy 10.9 6.4

Car Parks

Representing 18.9% of our business in Hong Kong by value, our car parks had consistently contributed income growth and recorded a year-on-year increase of 5.1%. Our Park & Dine mobile app and enhanced shopping environment helped drive visitations to our shopping centres, especially the hourly parking. The continuously increasing number of new private cars on the road also gave rise to a growing demand for car park spaces at our car parks - which led to growth in car park income.

Car park income per space per month increased by 10.7% year-on-year to HK$2,239 for the year ended 31 March 2017.

Year ended 31 March 2016

Car park income per space per month (HK$) 2,239 2,022

As at 31 March 2016

Total valuation (HK$'M) 30,813 28,888 Average valuation per space (HK$'000) 446 384