Key Takeaways:
- Announced sale of 56% stake in Singapore retail property for SGD250 million.
- Deal represents a 45% premium to the 2023 acquisition price.
- BofA Securities expects proceeds to fund share buybacks after the Q2 2026 close.
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Link REIT to net SGD250 million from Singapore asset sale
Link REIT agreed to sell its 56% interest in the Singapore retail property Swing By@Thomson Plaza for SGD250 million, a deal that represents a 45% premium to its acquisition price just last year.
"We predict that most of the proceeds will be used for share buybacks after the deal is completed in 2Q26," BofA Securities said in a research report, reiterating its Buy rating on the trust.
The transaction implies an attractive initial yield of 3.7% and is priced at a 23% premium to the property's book value, according to the broker's estimates. The deal is scheduled to be finalized in the second quarter of 2026.
The asset sale at a significant premium strengthens Link REIT's balance sheet and signals management's ability to recycle capital effectively. The expected use of proceeds for share buybacks could increase earnings per unit and provide upward support for the unit price, reflecting confidence in the REIT's current valuation.
BofA Securities maintained its target price of $44, arguing that headwinds in Hong Kong's non-essential retail sector have been largely priced into the units. The bank noted that Link REIT's tenant sales showed initial signs of stabilization in the fourth quarter of 2025, with resilient industry trends in the first two months of 2026 providing further encouragement.
Based on a projected dividend yield of 6.6% for 2027, BofA Securities highlighted that Link REIT offers the highest yield among the Hong Kong property companies under its coverage.
This article is for informational purposes only and does not constitute investment advice.
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