Core Viewpoint - Hong Kong-listed REITs, represented by Link REIT, are expected to become important investment targets for domestic investors seeking stable cash flow and optimized asset allocation due to their inclusion in the Stock Connect program [2][10][15] Group 1: Market Context - The global financial market is transitioning into a low-interest-rate environment, with the US 10-year Treasury yield around 4% and Hong Kong banks offering deposit rates between 1%-2% [2] - Domestic REITs have seen rapid growth, with 73 public REITs listed as of August 14, totaling approximately 200 billion RMB, surpassing those in Hong Kong, Singapore, and Japan, making it the largest market in Asia [2] Group 2: Investment Highlights of H-REITs - H-REITs provide stable dividend yields ranging from 6% to 9%, significantly higher than traditional low-risk investment products [3][4] - These funds are required to distribute at least 90% of their annual income to unit holders, ensuring consistent cash flow [6] - H-REITs offer high liquidity as they are publicly traded, allowing investors to buy and sell like stocks [6] - They possess natural risk diversification by investing in a variety of properties, reducing concentration risk [6] - H-REITs have good inflation-hedging properties, as real estate values and rental incomes typically rise with inflation [6] Group 3: Link REIT's Performance and Strategy - Link REIT has a property portfolio valued at 226 billion HKD, including retail, parking, office, and logistics properties, with a strong management system developed over 20 years [8] - The REIT has maintained a high occupancy rate of 97.8% in its Hong Kong properties, despite challenges in the retail sector [12] - Link REIT has consistently distributed 100% of its distributable income as dividends, achieving an annualized return rate of nearly 11% and a total distributable amount growth rate of 7.1% [9] Group 4: Policy and Market Expansion - The inclusion of H-REITs in the Stock Connect program is seen as a significant milestone, enhancing market connectivity between mainland China and Hong Kong [10] - This policy is expected to attract long-term capital from index funds, ETFs, and pension funds, increasing market activity and liquidity [11] - The launch of new products, such as the Southbound Asia Pacific REITs ETF, indicates growing investor interest in REIT assets [11] Group 5: Future Outlook - The ongoing low-interest-rate environment presents dual opportunities for H-REITs, enhancing both their financing conditions and the capital appreciation potential of quality rental assets [9][10]

Core Viewpoint - Hong Kong-listed REITs, represented by Link REIT, are expected to become important investment targets for domestic investors seeking stable cash flow and optimized asset allocation due to their inclusion in the Stock Connect program [2][3][18] Group 1: Market Context - The global financial market is transitioning into a low-interest-rate environment, with the US 10-year Treasury yield around 4% and Hong Kong banks offering deposit rates between 1%-2% [2] - Domestic REITs have seen rapid growth, with 73 public REITs listed as of August 14, totaling approximately 200 billion RMB, making it the largest market in Asia [2] Group 2: Investment Highlights of H-REITs - H-REITs provide stable dividend yields ranging from 6% to 9%, significantly higher than traditional low-risk investment products [3][5] - They offer robust returns due to income primarily from rental and management fees, maintaining stability even during economic downturns [6] - H-REITs are publicly traded, providing high liquidity, allowing investors to trade like stocks [6] - They inherently possess risk diversification by investing in a variety of properties, reducing concentration risk [6] - H-REITs have good inflation-hedging properties, as real estate values and rental incomes typically rise with inflation [6] Group 3: Link REIT's Performance and Strategy - Link REIT has a property portfolio valued at 226 billion HKD, including retail, parking, office, and logistics properties, with a strong focus on major cities in China [8] - The REIT has maintained a high distribution payout, consistently distributing 100% of its distributable income, achieving an annualized return rate of nearly 11% [8] - Link REIT's average borrowing cost has decreased from 3.8% to 3.6%, improving its financing environment amid a potential interest rate decline [9] Group 4: Policy and Market Expansion - The inclusion of H-REITs in the Stock Connect program is seen as a significant milestone, enhancing market connectivity and potentially increasing liquidity and market activity [12][13] - The anticipated influx of long-term capital from index funds and high-dividend asset investors is expected to further boost market activity [13] Group 5: Resilience and Growth - Link REIT has demonstrated resilience with a rental occupancy rate of 97.8% in Hong Kong, despite structural changes in the retail sector [15] - The REIT has successfully completed over 100 asset enhancement projects since its listing, achieving an average investment return rate of 18% [17] - The property portfolio valuation has increased from 33.8 billion HKD at listing to 226 billion HKD, reflecting a growth of approximately 5.7 times over 20 years [17]