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 any part of the world, including but not limited to 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 the existing properties 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
The Manager intends to actively manage Hui Xian REIT’s property portfolio to optimise rental income growth, maintain an optimal tenant mix, capture property enhancement opportunities, optimise 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 optimise the properties’ 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, 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.
The Manager will from time to time consider appropriate acquisition opportunities in commercial properties that provide stable cash flow yields and the potential for long term capital appreciation.
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 optimise the capital structure and cost of capital 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 50% 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 capitalise 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.
In August 2021, the SFC published the “Circular to licensed corporations, management, and disclosure of climate-related risks by fund managers”, requiring fund managers to further enhance the management and disclosure of climate-related risks. Hui Xian REIT has relevant policies and procedures in place to ensure that we can address and mitigate the risks that climate change poses to our business.
The Board has overall responsibility for Hui Xian REIT’s ESG strategy, management, progress review and reporting. Our Sustainability Steering Committee, led by the Legal and Compliance Department to oversee the climate-related issues of Hui Xian REIT and its Asset Companies, delivers regular updates to the Board on any actions required. With the support of the Enterprise Risk Management system, the results of annual risk assessments will be reviewed by the executive officers and actions to manage the risks will be proposed.
Hui Xian REIT has a Climate Risk Policy in place to assert our commitment in (i) aligning our climate risk strategies with local and international best-practices; and (ii) identifying, assessing and managing climate risks in a systematic and proactive approach. The investment strategy of Hui Xian REIT will be reviewed on a periodic basis and reported to the Board in light of prevailing market and economic conditions and other factors as appropriate. The ESG Delegated Committee will review the Climate Risk Policy regularly and update the policy to give effect and comply with the rules, regulations or guidelines issued by SFC, HKEX or other relevant regulatory authorities from time to time.