Link REIT: Acquisition of Remaining 50% Interest in Shanghai Qibao Vanke Plaza Is Accretive

No-moat Link REIT announced the acquisition of the remaining 50% interest in Qibao Vanke Plaza in Shanghai. The estimated consideration of CNY 2.4 billion is based on an agreed property value of CNY 5.2 billion, which represents a 26.3% discount to the appraised property value of CNY 7.1 billion as of end-January 2024. With a monthly passing income of CNY 40.6 million from the mall and the car park, we estimate an attractive net property income yield of around 7%. After updating our model for this acquisition, we raise our fiscal 2025 and 2026 (ending March) distribution per unit forecast slightly to HKD 2.63 and HKD 2.86, respectively, implying a fiscal 2025 distribution yield of 6.9%. We maintain our fair value estimate of HKD 59 as we previously assumed that the rights issue proceeds would be redeployed for acquisitions.