Bocom Intl's research report indicates that Link REIT (00823.HK) recorded a 6.4% and 5.8% year-on-year growth in revenue and net property income for the first half of the 2025 financial year, reaching 7.153 billion and 5.359 billion yuan respectively. Distributable income increased by 4.3% year-on-year to 3.476 billion yuan, with a per unit dividend growth of 3.7% year-on-year to 134.89 cents, exceeding market expectations.

The bank stated that the rental adjustment rate for Hong Kong's retail sector increased by 0.7% during the period, with an occupancy rate maintaining at a high level of 98%, leading to a 2.6% growth in total retail income to 3.829 billion yuan. Additionally, both the mainland and Singapore retail property portfolios reported a 3.2% decrease and an 18.9% increase in rental adjustment rates during the period. The bank expects the overall rental level for the 2025 financial year to remain relatively stable. As of the first half of the 2025 financial year, Link REIT's average borrowing cost is 3.69%, a slight decrease from 3.78% at the end of the 2024 financial year, with the company's future average borrowing cost expected to remain stable with a slight decrease.

The bank believes that the performance in the first half of the 2025 financial year is stable, exceeding market expectations in terms of dividends. Furthermore, it demonstrates Link REIT's resilience in the face of mainland consumers through its predominantly Hong Kong retail portfolio focused on essential consumer goods. The bank maintains a 'buy' rating and a target price of 47.7 yuan. (vc/u)

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