STOCKS | UBS Sees Positive Reaction To Link REIT's Q1 FY2027 Update

UBS said Link REIT (00823) released its first-quarter FY2027 operating update, with Hong Kong retail rental reversions for the first half of FY2027 guided at negative mid-single digits, an improvement from negative 8.2% in FY2026. The bank kept a Buy rating and a target price of HK$47.2, saying management remained cautious on full-year reversions but reiterated that Hong Kong retail spot rents and occupancy have stabilized. UBS also said it sees potential for higher share buybacks at the interim results, after the planned sale of a 50% stake in 100 Market Street is completed before the third quarter of FY2027, according to ETNet. Management said it has deployed more than HK$1 billion for buybacks year to date, while HK$500 million of the authorized repurchase amount remained unused after the sale of Thomson Plaza. UBS said Link REIT's Link Plaza has strong pre-leasing and is now 80% occupied, which could ease investor concerns about the sustainability of FY2028 distribution per unit. Management reiterated its FY2027 guidance for stable distribution per unit.