Prosperity Real Estate Investment Trust · HKEX:808
Prosperity Real Estate Investment Trust — FY2012 Earnings Presentation
31 slides from Prosperity Real Estate Investment Trust's earnings presentation, Feb 28, 2013
Slide 1: Final Results
Final Results For the year ended 31 December 2012 28 February 2013
Slide 2: Disclaimer
Disclaimer This document has been 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 Pro
Slide 3: Table of Contents
Table of Contents 2012 Final Results Highlights Financial Review Operations Review Strengths and Prospects Appendix Prosperity REIT 2012 Final Results 3
Slide 4: 2012 Final Results Highlights
2012 Final Results Highlights 4
Slide 5: 2012 Final Results Highlights: DPU Growth of 12.6%
2012 Final Results Highlights DPU Growth of 12.6% DPU (HK$) 0.1354 0.1202 2011 2012 Underpinned by Strong Revenue and Stable Costs Revenue Distributable Income (HK$m) (HK$m) 308.4 186.9 275.6 163.5 2011 2012 2011 2012 Prosperity REIT 2012 Final Results 5
Slide 6: Prosperity Place Wholesale Conversion Approved
2012 Final Results Highlights Prosperity Place Wholesale Conversion Approved In 4Q2012, special waiver was granted by the government to convert the use of Prosperity Place from industrial/office to commercial under the industrial buildings revitalization scheme Approval allows Prosperity Place to in
Slide 7: Outperformance in Unit Price and Yield
2012 Final Results Highlights Outperformance in Unit Price and Yield Unit Price vs Index Increase Yield as at 31 December 2012 in 2012 56.7% 5.8% 5.0% 4.4% 37.6% 35.9% 3.5% 3.2% 22.9% 2.2% 0.6% Prosperity Hang Seng Hang Seng Hang Seng Prosperity HS REIT HS High I-Bond due HS Index HS HK 10 REIT Prop
Slide 8: Financial Review
PROSPERITY REIT iS & & (5
Slide 9: Revenue and NPI Increase
Financial Review Revenue and NPI Increase Revenue Net Property Income (HK$m) (HK$m) 239.5 308.4 Cost-to-revenue 275.6 211.5 ratio reduced from 23.3% to 22.3% 2011 2012 2011 2012 Property Valuation As at 31 Dec 2012 Commercial HK$1,737m 21.8% Total: HK$7,952m 19.4% Industrial/Office Grade A Office (+
Slide 10: Capital Management
Financial Review Capital Management 1. Term Loan Facility HK$1,770m (fully drawn) Facility expires in Aug 2015 Interest rate: 80% – Hedged at 1.335%, excluding interest spread of 81 bps 20% – Floating at HIBOR + 81 bps 2. Revolving Credit Facility HK$430m (HK$20m drawn as at 31 Dec 2012) Facility ex
Slide 11: Capital Management
Financial Review Capital Management As at As at Change 31 Dec 2012 31 Dec 2011 (%) (restated) Total assets (HK$m) 8,004.0 7,052.3 +13.5% Total liabilities (HK$m) 2,184.8 2,145.6 +1.8% Net assets (HK$m) 5,819.2 4,906.71 +18.6% NAV per unit2 (HK$) 4.24 3.621 +17.1% Gearing ratio3 22.4% 25.6% -3.2%4 (T
Slide 12: Operations Review
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Slide 13: Portfolio Occupancy Rates Maintained at Above 95% Since 2006
Operations Review Portfolio Occupancy Rates Maintained at Above 95% Since 2006 Property As at As at 31 Dec 2012 31 Dec 2011 The Metropolis Tower 97.9% 98.5% Prosperity Millennia Plaza 99.6% 100.0% Harbourfront Landmark (portion) 100.0% 100.0% Prosperity Place 96.1% 98.8% Trendy Centre 99.2% 96.3% Pr
Slide 14: Strong Assets Performance
Operations Review Strong Assets Performance Rental Reversion Rate Average Effective Unit Rent (HK$ psf) 36.1% 16.94 15.05 14.8% 2011 2012 2011 2012 * Absolute change Prosperity REIT 2012 Final Results 14
Slide 15: Balanced Tenant Profile
Operations Review Balanced Tenant Profile Trade Mix by Gross Rentable Area (As at 31 Dec 2012) 31.0% Electronic / Technology Manufacturing / Trading 31.7% 9.9% Textile / garment Logistics 3.5% 2.9% Advertising / Media Consultancy / Research 5.0% 2.3% Finance / Investment Real Estate 0.2% 13.5% Other
Slide 16: Lease Expiry Profile by Gross Rental Income
Operations Review Lease Expiry Profile by Gross Rental Income 31 Dec 2012 (As at 31 Dec 2012) and 2013 The Metropolis Tower 33.6% Prosperity Millennia Plaza 33.1% Harbourfront Landmark (portion) 0.0% Prosperity Place 35.8% Trendy Centre 44.9% Prosperity Center (portion) 45.0% New Treasure Centre (po
Slide 17: AEIs Completed in 2012: Prosperity Place Rooftop Garden
Operations Review AEIs Completed in 2012 Prosperity Place Rooftop Garden Before: Concrete parapet wall After: Tempered glass wall providing unobstructed views of the Victoria Harbour and Kai Tak Cruise Terminal Prosperity REIT 2012 Final Results 17
Slide 18: AEIs Completed in 2012
Operations Review AEIs Completed in 2012 Prosperity Place Car Park Entrance Before After: Green wall creating an eco- friendly surrounding The Metropolis Tower Lobby Before After: Green wall adding green ambience to the building Prosperity REIT 2012 Final Results 18
Slide 19: AEIs In Progress: Prosperity Place Wholesale Conversion
Operations Review AEIs In Progress Prosperity Place Wholesale Conversion Under government’s “industrial buildings revitalization scheme”, approval to convert usage from industrial/office to commercial was granted in 4Q2012. Implications of Approval Benefits Introduction of commercial elements Wider
Slide 20: AEIs In Progress: Prosperity Place Lobby
Operations Review AEIs In Progress Prosperity Place Lobby Before After: Green wall to provide an environmental friendly workplace Before After: Electronic directory board for placing advertisements Prosperity REIT 2012 Final Results 20
Slide 21: AEIs In Progress: Trendy Centre
Operations Review AEIs In Progress Trendy Centre Common Washrooms and Cargo Lift Lobbies Before After: Renovated washrooms to provide better hygiene Before After: Renovated cargo lift lobbies to increase building’s competitiveness Prosperity REIT 2012 Final Results 21
Slide 22: Strengths and Prospects
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Slide 23: Stable distributions and high yield
Strengths and Prospects Stable distributions and high yield 100% payout ratio Stable distribution and defensive investment as proven in economic cycles DPU (HK$) 0.1354 0.1202 0.1098 0.1101 2009 2010 2011 2012 5.8%* yield as at 31 Dec 2012 * Based on the closing unit price of HK$2.35 as at 31 Dec 20
Slide 24: Decentralization trend and Wholesale conversion
Strengths and Prospects Decentralization trend Ongoing developments in Kowloon East, to be the “CBD2” of Hong Kong Ongoing relocation trend to decentralized areas Wholesale conversion Unique opportunity to upgrade portfolio at no land premium Rental and property valuation upside More diversified por
Slide 25: Appendix
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Slide 26: Portfolio Map
Portfolio Map The Metropolis Prosperity Tower 1 Center Property 5 Total Gross Rentable Area: 1.22m sq.ft. GRA: 271,418 sq. ft. GRA: 149,253 sq. ft. Prosperity Trendy 6 Millennia Plaza 2 Centre 6 GRA: 217,955 sq. ft. GRA: 173,764 sq. ft. 7 Harbourfront New Treasure Landmark 3 Centre Property 7 Proper
Slide 27: The Metropolis Tower
The Metropolis Tower Property Profile (As at 31 Dec 2012) Location 10 Metropolis Drive, Hung Hom, Kowloon Year of Completion 2001 Gross Rentable Area 271,418 sq.ft. Appraised Value HK$2,773m (34.9% of total) Net Property Income HK$81.9m (34.2% of total) (FY12) Occupancy Rate 97.9% Prosperity REIT 20
Slide 28: Prosperity Place
Prosperity Place Property Profile (As at 31 Dec 2012) Location 6 Shing Yip Street, Kwun Tong, Kowloon Year of Completion 1996 Gross Rentable Area 240,000 sq.ft. Appraised Value HK$1,301m (16.4% of total) Net Property Income HK$32.8m (13.7% of total) (FY12) Occupancy Rate 96.1% Prosperity REIT 2012 F
Slide 29: Income Statement
Income Statement 2012 2011 For the year ended 31 Dec (HK$’000) (HK$’000) (restated) Revenue 308,366 275,627 Total property operating expenses (68,895) (64,115) Net property income 239,471 211,512 Interest income 84 2,782 Manager’s fee (36,837) (32,569) Trust and other expenses (7,060) (6,728) Increa
Slide 30: Key Facts
Key Facts Key Facts as at 31 Dec 2012 IPO Date 16 Dec 2005 IPO Price HK$2.16 5.8% Indicative Yield (based on FY2012 DPU of HK$0.1354 and closing unit price of HK$2.35 as at 31 Dec 2012) Number of Issued Units 1,379,867,101 Market Capitalization HK$3.2 billion (US$415.7 million) Average Daily Trading
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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