Prosperity Real Estate Investment Trust · HKEX:808
Prosperity Real Estate Investment Trust — FY2013 Earnings Presentation
31 slides from Prosperity Real Estate Investment Trust's earnings presentation, March 2014
Slide 1: Final Results For the year ended 31 December 2013
Final Results For the year ended 31 December 2013 March 2014
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 2013 Final Results Highlights Financial Review Operations Review Strengths and Prospects Acquisition of 9 Chong Yip Street Appendix Prosperity REIT 2013 Final Results Presentation 3
Slide 4: 2013 Final Results Highlights
2013 Final Results Highlights 4
Slide 5: 2013 Final Results Highlights
2013 Final Results Highlights DPU Growth of 10.4% DPU (HK$) 0.1495 0.1354 FY12 FY13 Underpinned by Strong Revenue and Stable Costs Revenue Distributable Income (HK$m) 341.9 (HK$m) 308.4 209.1 186.9 FY12 FY13 FY12 FY13 Prosperity REIT 2013 Final Results Presentation 5
Slide 6: Offers a distribution yield of 6.6%
2013 Final Results Highlights Offers a distribution yield of 6.6% Yield as at 31 December 2013 6.6% 6.1% 4.8% Yield spread of 430 bps 3.2% 2.8% 2.3% Prosperity REIT ¹ HS REIT Index HS High Dividend Yield HS Index HS Property Index HK 10 year Exchange Fund Index Notes Source: Bloomberg, Hang Seng Ind
Slide 7: Diversifying Tenant Base and Expanding Kowloon East Presence
2013 Final Results Highlights Diversifying Tenant Base and Expanding Kowloon East Presence Prosperity Place Following land use conversion from industrial/office to commercial, first-time retail, services trade and F&B tenants moved in and commenced business. 9 Chong Yip Street Proposed acquisition w
Slide 8: Financial Review
PROSPERITY REIT &S @ & feat Financial Review
Slide 9: Revenue and NPI Increase
Financial Review Revenue and NPI Increase Revenue Net Property Income (HK$m) (HK$m) 341.9 308.4 Cost-to-revenue 266.9 239.5 ratio improved to 21.9% FY12 FY13 FY12 FY13 Net Property Income Property Valuation FY2013 Trendy Centre As at 31 Dec 2013 Prosperity HK$30.1m Commercial Place Prosperity Center
Slide 10: Capital Management
Financial Review Capital Management Facility As at For 9 Chong Yip Street Acquisition 31 Dec 2013 (completed on 22 Jan 2014) Maturity Aug 2015 Aug 2015 Jan 2017 Jan 2019 HK$1,770m Term Loan HK$1,770m 5 years from 2010 80% hedged at 1.335%, excluding 81 bps spread 20% at HIBOR + 81 bps HK$430m Revolv
Slide 11: Capital Management
Financial Review Capital Management As at As at Change 31 Dec 2013 31 Dec 2012 (%) (audited) (audited) Total assets (HK$m) 8,584.8 8,004.0 +7.3% Total liabilities (HK$m) 2,223.4 2,184.8 +1.8% Net assets (HK$m) 6,361.4 5,819.2 +9.3% NAV per unit1 (HK$) 4.57 4.24 +7.8% Gearing ratio 20.9% 22.4% -1.5%2
Slide 12: Operations Review
PROSPERITY REITH SER Bat Operations Review 12
Slide 13: Portfolio Occupancy Rates Above 95% Since 2006
Operations Review Portfolio Occupancy Rates Above 95% Since 2006 Property As at As at 31 Dec 2013 31 Dec 2012 The Metropolis Tower 97.6% 97.9% Prosperity Millennia Plaza 99.1% 99.6% Harbourfront Landmark (portion) 100.0% 100.0% Rental Reversion Prosperity Place 99.3% 96.1% Rate¹ Trendy Centre 99.2%
Slide 14: Diversified Tenant Base
Operations Review Diversified Tenant Base Trade Mix by Gross Rentable Area (As at 31 Dec 2013) 33.3% Electronic/Technology 27.9% Manufacturing/Trading Introduced to the portfolio for 9.4% Textile/Garment 3.0% Logistics the first time 3.3% Advertising/Media 4.9% Consultancy/Research following Prosper
Slide 15: Lease Expiry Profile by Gross Rental Income
Operations Review Lease Expiry Profile by Gross Rental Income 31 Dec 2013 (As at 31 Dec 2013) 2015 2016 and Beyond and 2014 The Metropolis Tower 15.7% 54.9% 29.4% Prosperity Millennia Plaza 51.8% 31.9% 16.3% Harbourfront Landmark (portion) 99.9% 0.1% 0.0% Prosperity Place 47.9% 31.7% 20.4% Trendy Ce
Slide 16: AEIs in 2013: Prosperity Place Wholesale Conversion
Operations Review AEIs in 2013 Prosperity Place Wholesale Conversion New commercial tenants accounted for 19.7% of gross rentable area at Prosperity Place as at 31 Dec 2013. Prosperity REIT 2013 Final Results Presentation 16
Slide 17: AEIs in 2013: Prosperity Place
Operations Review AEIs in 2013 Prosperity Place Before After A new 400-square-foot green wall in the ground floor lobby to provide environmental friendly workspace. Renovated passenger lift lobbies and common corridors on selected floors to attract high quality commercial tenants. Prosperity REIT 20
Slide 18: AEIs in 2013: Prosperity Place (con't)
Operations Review AEIs in 2013 Prosperity Place (con’t) Before After Renovated lift lobbies on the car park floors to create a retail outlook. Replaced the concrete parapet wall on 3/F flat roof with a tempered glass wall to enhance marketability to commercial tenants. Prosperity REIT 2013 Final Res
Slide 19: AEIs in 2013: Trendy Centre
Operations Review AEIs in 2013 Trendy Centre Before After Before Renovated cargo lift lobbies to increase the competitiveness of the building. After Renovated common washrooms to improve the working environment for the tenants. Prosperity REIT 2013 Final Results Presentation 19
Slide 20: Strengths and Prospects
Strengths and Prospects 20
Slide 21: Stable distributions
Strengths and Prospects Stable distributions 100% payout ratio Stable distribution and defensive investment as proven in economic cycles DPU (HK$) 0.1495 0.1354 0.1202 0.1098 0.1101 2009 2010 2011 2012 2013 6.6%* yield as at 31 Dec 2013 * Based on the closing unit price of HK$2.26 as at 31 Dec 2013
Slide 22: Strengths and Prospects
Strengths and Prospects Decentralized locations Rentals in decentralized market maintain a competitive edge, prompting ongoing relocation Ongoing developments in Kowloon East, to be the “CBD2” of Hong Kong Wholesale conversion Unique opportunity to upgrade portfolio at no land premium Rental and pro
Slide 23: Acquisition of Chong Yip Street
Acquisition of 9 Chong Yip Street 23
Slide 24: First Major Acquisition Property Profile
Acquisition of 9 Chong Yip Street First Major Acquisition Property Profile Location 9 Chong Yip Street, Kwun Tong, Kowloon Property Type Grade A Office Year of Completion 2004 Gross Rentable Area 136,595 sq.ft. 64 private car parking spaces and 4 loading / Number of Car Park Spaces unloading spaces
Slide 25: Acquisition of Chong Yip Street: Completion in January 2014
Acquisition of 9 Chong Yip Street Completion on 22 January 2014 Operating Fully funded by Increased portfolio synergies debt Expands Kowloon size by 11.2% to & East Presence 1,352,174 sq.ft. Economies of yield-accretive scale Planned AEIs Focus on renovation of the ground floor lobby, lift lobbies a
Slide 26: Appendix
PROSPERITY REITH SER Bat Appendix 26
Slide 27: Portfolio Map
Portfolio Map The Metropolis 1 Prosperity 5 Total Gross Rentable Area: 1.35m sq.ft. Tower Place GRA: 271,418 sq. ft. GRA: 240,000 sq. ft. Prosperity Trendy 6 Millennia Plaza 2 Centre 6 8 GRA: 217,955 sq. ft. GRA: 173,764 sq. ft. 9 Chong Yip Prosperity Street * 3 Center Property 7 GRA: 136,595 sq. ft
Slide 28: Portfolio
Portfolio The Metropolis Tower Prosperity Millennia Plaza 9 Chong Yip Street Harbourfront Landmark Prosperity Place Trendy Centre Prosperity Center New Treasure Centre Prosperity REIT 2013 Final Results Presentation 28
Slide 29: Income Statement
Income Statement 2013 2012 For the year ended 31 December (HK$’000) (HK$’000) audited audited Revenue 341,883 308,366 Total property operating expenses (74,952) (68,895) Net property income 266,931 239,471 Interest income 25 84 Manager’s fee (41,353) (36,837) Trust and other expenses (9,834) (7,060)
Slide 30: Key Facts
Key Facts Key Facts as at 31 December 2013 IPO Date 16 Dec 2005 IPO Price HK$2.16 6.6% Indicative Yield (based on FY13 DPU of HK$0.1495 and closing unit price of HK$2.26 as at 31 December 2013) Number of Issued Units 1,396,178,197 Market Capitalization HK$3.2 billion (US$404.5 million) Average Daily
Slide 31: Contacts
Contacts ARA Asset Management (Prosperity) Limited (as manager of Prosperity REIT) Ms. Mavis Wong Chief Executive Officer maviswong@ara.com.hk Ms. Carey Kwan Manager, Investor Relations careykwan@ara.com.hk Mr. Abel Mak Property Analyst abelmak@ara.com.hk Units 5508-10, 55/F, The Center 99 Queen’s R
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