Prosperity Real Estate Investment Trust · HKEX:808
Prosperity Real Estate Investment Trust — H1 2021 Earnings Presentation
26 slides from Prosperity Real Estate Investment Trust's earnings presentation, August 2021
Slide 1: Interim Results
Interim Results For the half year ended 30 June 2021 August 2021
Slide 2: Disclaimer
Disclaimer This document was prepared by ARA Asset Management (Prosperity) Limited, in its capacity as the manager (“REIT Manager”) of Prosperity Real Estate Investment Trust (“Prosperity REIT”) solely for use at the presentation to analysts in relation to the announcement of the results of Prosperi
Slide 3: Table of Contents
Table of Contents Results Highlights Financial Review Operations Review Key Takeaways Appendix
Slide 4: Results Highlights
Results Highlights The Metropolis Tower
Slide 5: Financials
1. Financials Revenue Net Property Distributable Distribution Income Income Per Unit 1.9% 0.4% 1.2% 0.2% HK$228.7m HK$0.0899 HK$0.0901 HK$181.1m HK$138.1m HK$224.4m HK$180.4m HK$136.5m 1H20 1H21 1H20 1H21 1H20 1H21 1H20 1H21 Rental Occupancy Cost-to- Average Reversion Rate revenue Effective (as at 3
Slide 6: Unit Price and Yield
2. Unit Price and Yield Unit price change in 1H21: 22.7% 25.0% 22.7% 21.9% 19.1% 20.0% 13.5% 12.6% 15.0% 10.0% 6.6% 5.9% 5.8% 5.0% 0.0% -5.0% -2.2% -3.5% -3.9% -10.0% -15.0% -12.0% Prosperity Regal REIT Sunlight REIT CMC REIT Fortune REIT The Link REIT Spring REIT Yuexiu REIT Hui Xian REIT Champion
Slide 7: Returns
3. Returns Stable and sustainable distribution to continue ● 100% payout ratio ● Highly defensive investment as proven in economic cycles ● 239.5%* total return since IPO DPU (HK$) 0.0915 0.0920 0.0933 0.0906 0.0899 0.0901 0.0871 0.0897 0.0871 0.0865 0.0890 0.0895 0.0892 0.0815 0.0815 0.0744 0.0751
Slide 8: Financial Review
Financial Review Prosperity Millennia Plaza
Slide 9: Income Statement
Income 1. Statement Statement of Profit or Loss 1H21 1H20 (HK$’000) (Unaudited) (Unaudited) Revenue Revenue 224,389 228,731 decreased by 1.9% Total property operating expenses (43,962) (47,641) Net property income 180,427 181,090 NPI decreased by Interest Income 510 3,470 0.4% Manager’s fee (25,347)
Slide 10: Financial Position
2. Financial Position As at As at Change • All bank loan facilities 30 Jun 2021 31 Dec 2020 are unsecured. (Unaudited) (Audited) • None of the Total assets (HK$m) 10,314.0 10,511.8 -1.9% investment properties were pledged. Borrowings1 (HK$m) 2,331.9 2,327.9 0.2% Interest Rate4 Fixed : Floating Other
Slide 11: Portfolio Valuation
3. Portfolio Valuation Valuation by Property Type Industrial As at 30 Jun 2021 HK$328m Industrial/Office 3.3% HK$1,848m ● Portfolio valuation at HK$9,953m, 18.6% down 1.9% compared to 31 Dec 2020 Grade A Office HK$6,132m 61.6% 16.5% Commercial HK$1,645m (HK$’m) 30 Jun 2021 31 Dec 2020 Change The Met
Slide 12: Unit Buyback
4. Unit Buyback Sales proceeds from the disposal of Harbourfront Landmark property in 2017 were used for unit buyback to: • Return capital to unitholders • Enhance NAV and neutralize DPU dilution due to payment of manager fee • Show confidence in P-REIT business outlook, trading at ~6% attractive yi
Slide 13: Green Finance
5. Green Finance P-REIT closed its maiden sustainability-linked term loan of HK$800M with DBS to refinance term facility expiring in Aug 2021: • 5-year maturity • Interest margin: HIBOR + 1.05% p.a. • Reduction of interest margin for the extent of agreed “Sustainability KPI” achieved Sustainability
Slide 14: Operations Review
Operations Review 9 Chong Yip Street
Slide 15: Property Income
1. Property Income Revenue Net Property Income (NPI) New Treasure Centre New Treasure Centre HK$8.8m HK$6.6m Prosperity Center Prosperity Center HK$18.8m HK$13.6m The Metropolis Tower 3.9% The Metropolis Tower 3.7% HK$66.1m 8.4% HK$54.9m 7.5% Trendy Centre 29.5% Trendy Centre HK$20.2m HK$26.1m 30.4%
Slide 16: Occupancy Rates
2. Occupancy Rates Portfolio Occupancy Rates Above 95% Since 2006 (As at 30 Jun 2021) The Metropolis Tower 89.5% Prosperity Millennia Plaza 97.3% 9 Chong Yip Street 97.6% Prosperity Place 97.8% Trendy Centre 98.1% Prosperity Center (portion) 97.0% New Treasure Centre (portion) 100.0% Portfolio 96.0%
Slide 17: Lease Expiry Profile
3. Lease Expiry Profile Portfolio Lease Expiry Profile as at 30 Jun 2021 39.6% 40.6% 26.9% 24.4% 25.9% 24.6% 9.1% 8.9% 2H 2021 2022 2023 2024 and beyond By Gross Rental Area (GRA) By Gross Rental Income (GRI) Expiry Profile as at 30 Jun 2021 By Gross Rental Area By Gross Rental Income Period % of To
Slide 18: Robust Demand for Kowloon East Portfolio
4. Robust Demand for Kowloon East Portfolio FY20-1H21 New Lettings 24% Relocated from Other Districts / Other Kowloon East New set-up Properties Properties 50% 50% 26% Relocated from Same District • Kowloon East properties (CYS, PP & PC) took up 50% of total new lettings in FY20-1H21 • Our Kowloon E
Slide 19: Key Takeaways
Key Takeaways Prosperity Place
Slide 20: Key Takeaways
Key Takeaways 1. Distributable income increased by 1.2% ● Distribution per unit (DPU) was HK$0.0901, representing a distribution yield of 6.1%1 as at period-end ● Maintained 100% payout ratio since listing ● Highly defensive investment as proven in economic cycles 2. Net Property Income (NPI) decrea
Slide 21: ESG Efforts
ESG Efforts 1. 100% portfolio’s GFA recognized with green building 2. Two-star rating in 1st year of GRESB assessment certifications: ➢ “Excellent” in BEAM Plus Existing Buildings Version 2.0 (Management / Energy Use) 3. Rated “A+” in Hang Seng Corporate Sustainability Benchmark Index Prosperity REI
Slide 22: Appendix
Appendix Prosperity REIT 2021 Interim Results Presentation 22
Slide 23: Key Milestones since IPO
Key Milestones since IPO Listed on Hong Kong Stock Acquired 9 Chong Yip Street Disposed of Harbourfront Exchange with 7 properties. for approx. HK$1 billion, Landmark Property for expanding our portfolio size approx. HK$0.88 billion, by 11.2%. 49.1% premium over valuation. 2005 2007 2012 2014 2017 2
Slide 24: Portfolio Map
Portfolio Map The Metropolis 1 Trendy 5 Total Gross Rentable Area: 1.28m sq.ft. Tower Centre GRA: 271,418 sq. ft. GRA: 173,764 sq. ft. Prosperity Prosperity Millennia Plaza 2 Center Property 6 GRA: 217,955 sq. ft. GRA: 149,253 sq. ft. First Phase 9 Chong Yip New Treasure 第一階段 Street 3 Centre Propert
Slide 25: Key Facts
Key Facts Key Facts as at 30 Jun 2021 IPO Date 16 Dec 2005 Unitholder Structure IPO Price HK$2.16 6.07% Public CKAH2 Indicative Yield (based on 1H21 annualized DPU of HK$0.0901 and closing unit price of HK$2.97 as at 30 Jun 2021) 82.0% 18.0% Number of Issued Units 1,530,359,776 Market Capitalization
Slide 26: Contacts
Contacts ARA Asset Management (Prosperity) Limited (as manager of Prosperity REIT) Ms. Mavis Wong Chief Executive Officer MavisWong@ara-group.com Mr. Vicho Chung Manager, Investments & Investor Relations VichoChung@ara-group.com Mr. Justin To Senior Analyst JustinTo@ara-group.com Unit 901, Level 9,
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