Link REIT's Choi Yuen Plaza (Photo: Link REIT)Link REIT's Choi Yuen Plaza (Photo: Link REIT)

Amid difficult business conditions brought about by the coronavirus outbreak, Link REIT is expanding the size of its support scheme for its tenants in Hong Kong by HKD300 million (USD39 million).

This is in addition to the HKD80 million support scheme that was announced in mid-February 2020.

The support scheme offers targeted relief measures to tenants.

These includes rent reductions, rent-free periods, rent payment by instalments, waiving late payment interests and service charges, and additional parking concessions.

The scheme runs in parallel with other support provided to tenants, such as lease restructuring.

“We have been working closely with our tenants to offer support during these difficult times and we understand the prolonged impact from the coronavirus has resulted in a greater need for relief measures”, said Link REIT’s CEO, George Hongchoy.

“The uncertainty of the situation means that we regularly review the type and quantum of the support scheme. The Board of Directors has approved that we substantially expand our support scheme to echo the HKSAR Government’s economic relief package” added, Nicholas Allen, Chairman of the Board of Link REIT.

Link REIT’s mass market-oriented retail portfolio largely consists of non-discretionary trades, and provides for the daily necessities to the public at large.

Roughly 50% of the REIT’s tenants have seen relatively minor impact from the pandemic, and some sectors such as fresh markets, supermarkets and pharmacies have fared well in recent months, said Link REIT.

However, trades encompassing education centres, food and beverage outlets, especially Chinese restaurants, fitness centres and game centres have been significantly impacted by the pandemic and related social distancing measures, it explained.

To date, the REIT has offered support in various forms to some 1,900 tenants, representing over one third of its rental income in Hong Kong.

In particular, Link REIT has approximately 130 education centres in its portfolio, almost all of which have received assistance including rental concessions.

In this period, Link REIT has also carried out a range of marketing measures to help boost tenants’ sales.

In March, Link announced a 50% discount on the monthly car park fee for school bus patrons of Link REIT’s car parks from April to September to mitigate the impact of class suspensions.

In addition, the REIT intends to suspend monthly car park fee adjustments in the short term despite soaring operating costs for increased hygiene measures and labour costs from minimum wage increases.

“Link will remain vigilant in face of the challenging market conditions and respond on a timely basis to support our tenants, shoppers and the community. We are committed to working in concert with the government and other concerned parties to ride out this challenging period”, Hongchoy added.

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.