[ET Net News Agency, 9 November 2017] Moody's Investors Service saidys that Link Real
Estate Investment Trust's (Link REIT)(00823) interim results for the six months between 1
April 2017 and 30 September 2017 (H1 2018) - including its increased debt leverage - were
in line with Moody's expectations and continue to support its A2 issuer rating and the
stable outlook on the rating.
"Link REIT's adjusted debt/EBITDA increased to 4.8x for the 12 months to 30 September
2017 from 4.1x for the fiscal year ended 31 March 2017, mainly because of the higher debt
to fund its acquisition of the Metropolitan Plaza in Guangzhou," said Stephanie Lau, a
Moody's Vice President and Senior Analyst. "Nevertheless, this level of leverage remains
in line with its A2 rating category."
"In addition, Link REIT's robust EBITDA growth, strong occupancy levels and stable
margins continue to support its credit profile," added Lau.
Link REIT's reported debt increased notably by 21.4% to HK$33.4 billion at 30 September
2017 from HKD27.5 billion at 31 March 2017, driven by its RMB4.0 billion acquisition of
Metropolitan Plaza, which was completed in May 2017.
On the other hand, Link REIT reported strong interim operating performance, which partly
mitigated the increase in debt. For instance, year-on-year, its revenue grew 7.4% and
adjusted EBITDA increased 9.1% for H1 2018. Such earnings growth was supported by a 7.9%
year-on-year increase in overall retail rentals - excluding asset disposals - and
strong occupancy rates, which were maintained at 96.3% in Hong Kong, as well as stable
margins. (KL)