STOCKS | JPMorgan Keeps Link REIT At Overweight, Cuts Quarterly Rent Decline View

JPMorgan said Link REIT (00823) reported first-quarter operating data for fiscal 2027, with Hong Kong spot rents remaining stable and the quarterly decline in unit rents narrowing to 0.5% from 1.5% previously, according to ETNet. The broker said tenant sales fell 1.1% year on year in the quarter, reversing from a 0.7% increase it estimated for the fourth quarter of fiscal 2026 and lagging Hong Kong staple retail sales growth of 3.7%. It kept an Overweight rating on Link REIT and a target price of HK$43. JPMorgan said food and beverage continued to outperform, while supermarkets and general retail remained a drag. Management expects rental reversions to trend toward the mid-negative single digits in the first half of fiscal 2027, but kept its full-year guidance at the high-negative single digits, implying a weaker second half. The report also said Link REIT's Link Plaza is 80% pre-leased, with anchor tenants committed, and is scheduled to open in October 2026. Management plans to retain some vacant space to capture potential upside from nearby residential development. JPMorgan estimated the project could add about 0.5% to Link REIT's incremental rental income after full ramp-up.