UBS Group released a report stating that Link REIT (00823.HK) is cautious about the outlook for the second half of the next fiscal year ending in March 2025. Although the recent decline in tenant sales has stabilized and narrowed, management indicated that the rental growth in the second half of the 2025 fiscal year will be lower than the 0.7% in the first half ending in September of this year. The latest overall rent-to-sales ratio has reached 13.1%, and the company aims to maintain it below 14%. Meanwhile, Link REIT's primary task is to maintain occupancy rates and cultivate good relationships with tenants.

UBS Group pointed out that several leading listed retail tenants, such as Just Kitchen (02217.HK) and Cafe de Coral (00052.HK), have issued profit warnings. Therefore, due to the higher sales base of tenants three years ago, it is expected that the renewal rents of Link REIT may turn negative in the second half of the current fiscal year and further accelerate the decline to 5% in the 2026 fiscal year.

UBS Group mentioned that due to the increase in the yield of the U.S. 10-year Treasury bonds from 3.6% in mid-September to 4.5%, they believe that there are limited short-term catalysts for Link REIT's stock price and hence maintain a 'Neutral' rating. The target price has been raised from 38 yuan to 39.4 yuan.