The Link REIT property fund has set aside HK$600 million for the renovation of its retail portfolio this year.

And facelifts on 20 of its shopping mall projects are expected to be completed in 2010.

The renovations of five shopping malls managed by Link REIT have been completed. The fund is working on adding value to the malls, which will result in higher rents for tenants. Bloomberg

Fund Chairman Nicholas Smith revealed the latest renovation timetable Friday for the fund's shopping malls, saying five projects are already completed, three are partially completed.

Owing to the change of legal and regulatory procedure, HKHA (the Hong Kong Housing Authority) has delayed the transfer of 58 properties to the Link group until 2010.

HKHA had planned to complete the injection of several properties into the group this year, but 80 of them were delayed because of the hitch.

Smith said that 22 of the 80 properties have been transferred.

In the past financial year, the fund recorded an 11.2 percent growth in distributable income to HK$1.6 billion.

The valuation of the fund rose 12 percent to HK$44.3 billion, and the net asset value per unit was HK$14.16, up 13 percent.

The distribution yield was 4.3 percent, which was based on the end-of-March closing unit price of HK$17.26.

Smith dismissed the 4.3 percent yield being lower-than-the-average, saying the low return yield was due to the accumulated surge in the share price.

Meanwhile, the average rent shot up 22.64 percent to HK$27.70 per square foot, but the fund's executive director and CEO, Ian Robins, sidestepped a question regarding the rental adjustment this year.

He said the fund is working on adding value to its shopping malls, which will boost the incomes of the tenants and lead to rent increases.

"We'll monitor the trend between their income and rent in the future," he said.

The occupancy rate dropped from 90.3 to 89.3 percent in the 2006-07 fiscal year. Smith attributed the fall to the construction of the enhancement plan.

When asked about the disposal of assets, the fund's executive director and CFO, Chew Fook-aun, said the board of directors doesn't discuss the topic in meeting. He said the fund puts its focus on the enhancement plan.

The share price of the Link REIT dropped 0.5 percent, or HK$0.10 Friday, closing at HK$19.40.

(HK Edition 06/07/2008 page2)