LINK Real Estate Investment Trust, Hong Kong's biggest property trust, proposed a final dividend of 34.62 Hong Kong cents per unit yesterday as it benefited from rising rental income.
The trust, which runs 180 parking garages and shopping malls previously owned by Hong Kong's government, said total income for distribution to shareholders for the 12 months ending March 31 was HK$1.44 billion (US$184 million), without providing figures for the full previous year.
The HK$1.44 billion income matched the average forecast in a Bloomberg News survey of three analysts.
Management of Link REIT has been under pressure from largest unitholder Children's Investment Fund Management (UK) LLP, also called TCI, to raise rents. Link Chief Executive Officer Victor So last month said he'll quit on July 1 for health reasons, following former Chairman Paul Cheng's resignation in January.
"Management changes will have significant impact on strategy and public image of the Link going forward," said Eric Wong, a Hong Kong-based analyst at UBS. The impact will be bigger "especially in how the new team will carry out asset enhancement."
Cheng, who initially said he was retiring, later said he'd quit because of a disagreement with TCI over the pace of rent increases at its shopping malls, according to a report in Hong Kong's South China Morning Post.
The per-unit distribution yield was 6.55 percent, based on the trust's initial public offering price of HK$10.30, according to Link's statement to the Hong Kong stock exchange yesterday.
Shares of Link REIT fell 1.8 percent to HK$17.60 at 12:30pm in Hong Kong before the earnings were announced. The stock has risen 10 percent this year, compared with the 2.7 percent gain in the benchmark Hang Seng Index.
Link REIT held what was at the time the world's largest initial sale by a property trust, attracting US$47 billion of orders by promising to boost yields through cutting costs and adding shop space inside its malls.
The trust reported average rent of HK$23.60 per square foot during the year, compared with HK$23 a year earlier. TCI had demanded the trust almost double average rent to HK$40 as soon as possible, the Economic Times reported in December.
Occupancy rate at the trust's shopping malls fell to 90.3 percent at the end of March compared with 91.2 percent a year earlier. Utilization rate for the car parks during the year was 71.6 percent, compared with 72 percent the previous year.
The trust has began upgrade work at 23 of its shopping malls and has targeted another 16 for improvements, said Nicholas Sallnow-Smith, who replaced Cheng as chairman.