Annual Report 2007 - The Link REIT

Annual Report 2007
The Link Real Estate Investment Trust
15
CEO’s Report
Department (“HD”) offices and ancillary, the average unit
rent of the total portfolio as at 31 March 2007 was HK$25.9
psf (2006: HK$25.4 psf)
Leasing of market stalls continues with occupancies of
markets standing at 77.5% (2006: 82.2%) at the year end. In
order to improve the overall management and to increase
the occupancy of the markets, management has introduced
the concept of the Market Management Agent (“MMA”) in
a pilot scheme for eight directly managed markets starting
from May 2007. The MMA will work with management to
increase occupancy of the designated markets and also
assist with managing the markets to improve services
and eliminate tenancy malpractices. The MMA will be
remunerated on the basis of a base fee plus a performance
based revenue share, allowing both parties to share in the
upside. If successful, we will consider extending this pilot
scheme to other directly managed markets.
In line with our proactive leasing strategy, we have taken
steps to unlock the potential of our properties. For instance,
we have converted under utilised tennis courts on the roof
top of a carpark building into mini soccer pitches which
have proved to be very popular with customers.
Effective from 1 June 2007, we have started to apportion
management fees from rent for all new leases and renewals.
This will ensure that we align our leasing practices in line
with the commercial sector.
Carpark utilisation as at 31 March 2007 was 71.6% (2006:
72.0%). We are closely monitoring utilisation at our carparks
to ensure that our rates charged are competitive and to align
them with market rentals. To bring even more convenience
to our monthly carpark users, we have introduced an
e-payment scheme to facilitate payment of carpark fees.
■
Our customer service ambassadors welcome shoppers with tokens of
appreciation during special events such as Mother’s Day.
Portfolio Management
During the year, we have completed the regrouping
and reorganisation of the property management agents
and carpark operators through tendering. As a result, we
have appointed nine property management agents and
three carpark operators to provide management services
to our retail and carpark facilities. This has enabled us
to achieve cost savings and operational efficiencies. In
addition, installation of energy savings devices in our
carparks has helped to reduce electricity cost. The new
carpark automation system, together with the upgrading of
security systems will further enhance operational efficiency,
customer services and reduce operating costs.
Our cost to income ratio for the year was 40.3%, an
improvement since the interim results which showed a
figure of 40.5%. Excluding estate common area costs, the
cost to income ratio for our portfolio was 38.9%. We will
endeavour to control costs but it is inevitable, as more List 2
property titles are transferred to us, that government rent
will increase.