Champion REIT Expected to Benefit From Lifting COVID-19 Measures; Link REIT Remains Preferred Pick

We continue to expect Champion REIT’s retail portfolio will benefit from a domestic recovery in the second half of 2022, and our long-term view on the REIT is unchanged. Previously, we noted that we expect Link REIT, Champion’s close peer, to benefit from a local recovery in the fiscal year ending March 31, 2023, given its Hong Kong retail portfolio consists mostly of suburban malls that rely more on domestic consumption. We believe Champion REIT’s performance is likely to lag that of Link REIT, as we think Langham Mall is more dependent on tourist consumption, and we expect recovery in the Three Garden Road office, in line with the rest of the market, to lag that of retail properties. That said, we expect the relaxation of COVID-19 measures from late April is likely to benefit overall Hong Kong retail assets.