INTERIM REPORT - The Link REIT

REPORT OF THE CHIEF EXECUTIVE OFFICER (CONTINUED)Valuation ApproachAs at30 September2011As at31 March2011Income Capitalisation Approach – Capitalisation RateRetail properties 5.00 – 7.00% 5.00 – 7.00%Retail properties: weighted average 5.88% 5.92%Car parks 5.50 – 9.25% 5.50 – 9.25%Car parks: weighted average 7.62% 7.63%Overall weighted average 6.11% 6.16%DCF ApproachDiscount rate 8.00% 8.00%CAPITAL MANAGEMENTDuring the period under review, the financial markets experienced a significant amount of volatility.The commercial banks in Hong Kong encountered a liquidity squeeze and increased credit margin.The Link REIT continued to focus on extending and spreading out debt maturity and loweringaverage interest cost. As a result, there will be no refinancing necessary in the next 18 months.Key financing transactions in the period are summarised below:• A new HK$2.5 billion 5-year club loan was put in place with various banks at an all-in cost ofHIBOR + 0.85% per annum of which HK$1.25 billion of the club loan is revolving in nature.• A total of HK$1.5 billion unsecured notes were issued under the Guaranteed Euro Medium TermNote Programme.• A further HK$500 million of the 2006 syndicated loan was prepaid.The overall average interest rate of the debt portfolio, after taking into account interest rate hedging,reduced from 3.72% as at 31 March 2011 to 3.45% as at 30 September 2011. Average outstanding lifeof the Group’s committed debt facilities was extended to 3.8 years as at 30 September 2011 from 3.4years as at 31 March 2011.14The Link Real Estate Investment Trust