Hong Kong's SFC Sets Timeline for REIT Connect as Link REIT Soars

The Hong Kong Securities and Futures Commission (SFC) has announced that it plans to launch 'REIT Connect' in the first half of next year, providing a clear timeline for the long-anticipated cross-border investment channel. The initiative aims to allow mainland investors to invest in Hong Kong-listed real estate investment trusts through the Stock Connect mechanism.

JPMorgan has given Link REIT (0823.HK) an 'Overweight' rating with a target price of HK$43, arguing that it would be the primary beneficiary of this new mechanism. The bank believes that Link REIT is the most liquid Hong Kong-listed real estate investment trust and would be best positioned to attract mainland capital inflows once included in REIT Connect.

HSBC Global Research has also expressed a positive view on the REIT Connect timeline, maintaining a 'Buy' rating on Link REIT with a target price of HK$46.5. The bank believes that Link REIT would benefit from an expanded mainland investor base and improved trading liquidity, which could drive yield compression, a positive factor for REIT valuations.