Convenience Retail Asia (0831) says the rents in shopping malls of Link REIT (0823) have surged dramatically.

Chief executive of Convenience Richard Yeung Lap-bun said most shopping malls increased their rents by less than 10 percent and several malls even recorded a decline.

However, the malls of Link REIT increased rents by between 20 percent and 30 percent. He said Link REIT will eventually understand the market finds it hard to bear such high rents.

Hong Kong retailers are under great pressure, partly due to rising operation expenses and changing consumption habits, said Yeung, adding that the boom from 2004 to 2014 will never be seen again. In 2018, Convenience Retail Asia plans to open up to 30 new stores. He said the company will prepare funds for acquisitions, and will use half the cash reserve to distribute special dividends if there is no suitable target. He is confident of an increase of four percent to five percent in same-store sales.

The company saw its net profit gain 7.7 percent year-on-year, to HK$150.31 million for the year ended December 31, 2017, while revenue rose 4.6 percent to HK$5.09 billion.

Core operating profit rose 7.4 percent to HK$182.59 million in 2017.

The firm declared a final dividend of 14 HK cents per share and said it maintains a strong financial position with net cash of HK$452 million and no bank borrowings.