Link Real Estate Investment Trust : Interim Results Announcement for the Six Months Ended 30 September 2016

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 unaudited interim results of Link and its subsidiaries (the Group) for the six months ended 30 September 2016.

The interim results and the condensed consolidated interim financial information of the Group for the six months ended 30 September 2016, after review by the Audit and Risk Management Committee of the Manager (the Audit and Risk Management Committee), were approved by the Board on 9 November 2016.

OVERALL FINANCIAL RESULTS

During the six months under review, total revenue and net property income increased by 10.1% and 11.1% year-on-year to HK$4,608 million (six months ended 30 September 2015: HK$4,185 million) and HK$3,440 million (six months ended 30 September 2015: HK$3,096 million), respectively. Interim distribution per unit (DPU) for the period amounted to HK111.75 cents (six months ended 30 September 2015: HK98.99 cents), representing a year-on-year increase of 12.9%.

Valuation of the property portfolio (including property under development and properties in Mainland China) reached HK$167,475 million, representing an increase of 4.2% compared to 31 March 2016. Net asset value per unit increased by 2.5% to HK$58.20 (31 March 2016: HK$56.79).

MANAGEMENT DISCUSSION AND ANALYSIS

In the six months under review, our business strategy, property portfolio and team performed well against the headwind of an increasingly uncertain macroeconomic environment. By continuing to execute a proven business strategy that focuses on building a productive and resilient portfolio, Link has delivered another strong performance for the first half of 2016/2017 while strengthening our position for future growth.

Building a More Productive and Higher Quality Portfolio Asset Management

Managing our properties well is our core growth driver which is inevitably the most important in driving profit and extracting value from the portfolio. The management of our retail and car park facilities has evolved to be our strength and expertise. Through scalable innovation, we continue to leverage on this competitive advantage. This strategy is supported by close monitoring and analysis of changes in district demographics and shopper preferences. Augmenting this is our proactive marketing approach which drives footfall, raises brand awareness and encourages shopper loyalty.

Hong Kong Portfolio

Retail

In the silhouette of a challenging retail market, our portfolio showed resilience in performance as we continued to focus on mass market non-discretionary trades. Occupancy rate for the portfolio as at 30 September 2016 remained stable at 95.9%. "Food and Beverage" sector continued to outperform other trades. Reversion rate for the overall portfolio stood at 21.0% and we recorded a 6.6% year-on-year growth in retail rentals. Average monthly unit rent improved from HK$50.0 psf as at 31 March 2016 to HK$52.5 psf as at 30 September 2016.

As at

31 March

2016

As at

31 March

2016

Properties HK$'M HK$'M HK$ psf (2) HK$ psf (2) % %

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. As at 30 September 2016, the tower portion and retail podium were vacant in preparation for renovation. Only several street shops were leased and those leases will expire before the end of 2016.

(4) Disposal was completed in May 2016.

(As at 30 September 2016)

%

%

2016/2017 14.8 16.6

2017/2018 26.5 29.9

2018/2019 and Beyond 50.8 49.4

Short-term Lease and Vacancy 7.9 4.1

Car Parks

Car parks, which represented 17.6% of our business by value, saw consistent rental growth and recorded a year-on-year increase of 6.4% during the period. This was supported by continuously growing demand in car park spaces and increased visitations to our shopping centres, driven by the enhanced shopping environment and stimulated by our Park & Dine mobile application.

Individual car park income per space per month increased by 11.1% year-on-year to HK$2,206 for the period ended 30 September 2016.

Six months

ended 30 September

2015

Car park income per space per month (HK$) 2,206 1,986

As at 31 March

2016

Total valuation (HK$'M) 29,490 28,888 Average valuation per space (HK$'000) 409 384

Mainland China Portfolio

The two properties in Mainland China acquired last year - EC Mall in Beijing and Corporate Avenue 1 & 2 in Shanghai - have delivered strong performance. They contributed revenue of HK$289 million and net property income of HK$232 million during the period, representing a 124% and a 144% year-on-year increase respectively as Corporate Avenue 1 & 2 made full- period contribution.

Almost fully occupied, both properties have created better value and improved our portfolio quality. Retail reversion rate was 43.9% for EC Mall and office reversion rate was 8.3% for Corporate Avenue 1 & 2 during the financial period.