|
Rental reversion is expected to stay solid. Rental reversion is still very positive so far in the 2H of FY13 (25.9% in 1H). Webelieve the reversion can remain solid for some time, driven by 1) above-averagereversions in the second rental cycle for malls that have undergone AEI 3 yearsago and 2) larger rental increase for under-priced leases, as Link has more tenantsales data now. Currently, Link has sales data for 90% of its tenants vs. 70-80% ayear ago. Despite a slowdown in overall retail sales growth in HK, retail sales atLink¡¯s malls have stayed solid, given its high exposure to non-discretionary tradesand a strong labor market for the blue collar group; it has little exposure to the realestate category.
Car park rates still have room to grow. There is still likely room to raise car park monthly rates next year, as Link¡¯s carpark rates are typically at the low end of the competitors¡¯ range in theirneighborhoods. (Its average monthly car park rate was HK$1,338 per month in 1HFY13.) We also note that there is likely room for Link¡¯s valuer to lower the cap ratefor Link¡¯s car parks, given rising unit prices of car parks post the introduction ofthe Buyer¡¯s Stamp Duty (BSD). The cap rate applied by the valuer for Link¡¯s carpark at Sep 2012 was 7.21%. NPI margins could expand by a further 1-2ppts. Given strong rental reversion and cost-control initiatives, Link believes NPImargins could expand by a further 1-2ppts in the medium term from the 70.6%level in 1H FY13. While occupancy is already quite high at its largest malls(97.7%), there is still room to improve at its smallest 50 malls (88.5%), whichcould drive further margin expansion. Similarly, car parks could see highermargins (64.5%) if occupancy continues to rise.ÃÀÁÖ֤ȯ
| 
¡¾