Morgan Stanley: Expects LINK REIT (00823) to decrease its dividend per unit by 7.3% for the 2026 fiscal year. The target price is HK$37.

Morgan Stanley released a research report stating that LINK REIT (00823) was given a "in line with market" rating with a target price of 37 Hong Kong dollars. Link REIT is expected to announce its financial performance for the fiscal year 2026 ending in March 2026 in May. Despite the improvement in Hong Kong retail sales, the bank expects that the distribution per unit for the fiscal year 2026 will decrease by 7.3% year-on-year due to a decrease in rental income, compared to the market forecast of a 9.3% decrease. This means that the distribution per unit for the second half of 2026 is expected to decrease by 9.9% year-on-year. The report pointed out that due to the lagging effect and the slower-than-expected recovery of mass retail, the downward trend in renewal rental may continue until the first half of the fiscal year 2027. The growth of online sales and the increase in China's e-commerce penetration rate may impact Link REIT's retail property portfolio.