Strategy

The Manager’s key objective is to provide Unitholders of Hui Xian REIT with stable and sustainable distributions per Unit. To fulfill this objective, the Manager’s principal investment strategy is to hold and invest in high quality commercial properties in the PRC. Stable and attractive total returns to Unitholders will be generated through managing the REIT’s portfolio and maintaining a high level of investment discipline and financial flexibility. The Manager intends to hold Beijing Oriental Plaza on a long-term basis while, if opportunity arises, complementing it with additional income-producing properties through acquisitions.

The main tenets of the Manager’s strategy are as follows:

  • Asset Management Strategy
  • Acquisition Strategy
  • Capital Management Strategy

Asset Management Strategy

The Manager intends to actively manage Hui Xian REIT’s property portfolio to optimize rental income growth, maintain an optimal tenant mix, capture property enhancement opportunities, optimize occupancy levels, and prudently control property expenses.

The Manager will formulate leasing strategies and pursue initiatives to optimise the market potential and long-term income of Hui Xian REIT’s property portfolio. The Manager will set optimal rental benchmarks for each component of the property and will develop proactive marketing plans for each property component to enhance the visibility of the property and maximise tenant interest. The Manager also plans to manage lease renewals effectively and to minimise downtime arising from either lease expiries or early terminations.

The Manager will actively manage lease expiries to identify opportunities to optimize Beijing Oriental Plaza’s tenant mix. The Manager will also work closely with the Property Manager to continue to improve the rental income and value of Hui Xian REIT’s property portfolio by undertaking asset enhancement initiatives.

Working closely with the Property Manager of Beijing Oriental Plaza, the Manager will continue to improve the rental income and value of Hui Xian REIT’s property portfolio by undertaking asset enhancement initiatives. Property operating expenses will also be controlled through the implementation of cost control management systems that do not compromise the quality of services to tenants.

Acquisition Strategy

The Manager will from time to time consider appropriate acquisition opportunities in investment properties in the PRC that provide stable cash flow yields and the potential for long term capital appreciation.

Capital Management Strategy

The Manager aims to optimise returns on Hui Xian REIT’s portfolio and distributions to Unitholders while maintaining appropriate levels of financial prudence. The Manager will seek to optimize the capital structure and cost of capital of BOP by using a combination of debt and equity to fund property enhancements and, should appropriate opportunities arise, future acquisitions. In relation to the use of debt, the REIT Code limits Hui Xian REIT’s debt to 45.0% of its total gross asset value. Where applicable, the Manager will also seek to adopt a hedging strategy to manage the risks associated with changes in interest rates relating to its borrowings. The Manager also intends to capitalize on opportunities that may arise to raise additional equity capital for Hui Xian REIT through the issue of additional Units, should there be an appropriate use for such proceeds and if it is in the interest of Unitholders.