Prosperity Real Estate Investment Trust · HKEX:808
Prosperity Real Estate Investment Trust — H1 2018 Earnings Presentation
24 slides from Prosperity Real Estate Investment Trust's earnings presentation, August 2018
Slide 1: Interim Results
Interim Results For the half year ended 30 June 2018 August 2018
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 ProsperityREIT Prosperity REIT2016 2018Interim InterimResults ResultsPresentation Presentation 3
Slide 4: Results Highlights
Results Highlights The Metropolis Tower ProsperityREIT Prosperity REIT2016 2018Interim InterimResults ResultsPresentation Presentation 4
Slide 5: Financials
1. Financials Revenue Net Property Distributable Distribution Income Income Per Unit 0.6% 0.3% 1.6% 0.5% HK$177.0m HK$176.5m HK$136.3m HK$222.5m HK$221.1m HK$0.0915 HK$0.0920 HK$134.1m 1H17 1H18 1H17 1H18 1H17 1H18 1H17 1H18 Rental Occupancy Cost-to- Average Reversion Rate revenue Effective Rate Rat
Slide 6: Attractive yield: 5.8%
2. Yield Attractive yield: 5.8%1 5.8%1 3.7%1 3.3%1 2.2%2 0.6%1 Prosperity REIT's Dividend HS Index Dividend Yield HS Property Index Dividend HK 10-year Gov’t HK Composite Yield Yield Bond Yield Interest Rate Source: Bloomberg, Hang Seng Indexes Company Limited, Hong Kong Monetary Authority Notes: 1.
Slide 7: Returns
3. Returns Stable and sustainable distribution to continue ● 100% payout ratio ● Defensive investment as proven in economic cycles ● 200.1%* total return since IPO DPU (HK$) 0.0906 0.0915 0.0920 0.0871 0.0897 0.0871 0.0865 0.0815 0.0815 0.0744 0.0751 0.0694 0.0660 0.0595 0.0607 0.0554 0.0544 0.0555
Slide 8: Financial Review
Financial Review Prosperity Millennia Plaza ProsperityREIT Prosperity REIT2016 2018Interim InterimResults ResultsPresentation Presentation 8
Slide 9: Income Statement
Income 1. IncomeStatement Statement 1H18 1H17 (HK$’000) (Unaudited) (Unaudited) Revenue 221,104 222,509 Total property operating expenses (44,627) (45,468) Net property income 176,477 177,041 NPI decreased by 0.3% Interest Income 2,191 2,654 Manager’s fee (26,411) (25,661) Disposal gain Trust and ot
Slide 10: Financial Position
2. Financial Position As at As at Change All bank loan facilities are 30 Jun 2018 31 Dec 2017 unsecured; Total assets (HK$m) 11,225.2 10,884.0 +3.1% None of the investment properties were pledged. Borrowings1 (HK$m) 2,307.9 2,303.9 +0.2% Interest Rate 4 Other liabilities (HK$m) 552.2 526.4 +4.9% Fix
Slide 11: Debt Maturity Profile
3. Debt Maturity Profile No major refinancing needs until 2021 2,500 2,000 430 HK$ ’million 1,500 1,000 1,540 500 800 0 Aug 2021 Nov 2022 Year to Maturity Unsecured 5-yr term loan @ HIBOR+105 bps Unsecured RCF @ HIBOR+82 bps Unsecured 5-yr term loan @ HIBOR+82 bps ProsperityREIT Prosperity REIT2016
Slide 12: Portfolio Valuation
4. Portfolio Valuation Valuation by Property Type As at 30 Jun 2018 Commercial HK$ 1,815m ● Portfolio valuation at HK$10,800m, up Grade A Office 16.8% 3.0% compared to 31 Dec 2017 HK$ 6,650m 61.6% 18.4% Industrial/Office HK$1,985m 3.2% Industrial HK$350m (HK$m) 30 Jun 2018 31 Dec 2017 Change The Met
Slide 13: Operations Review
Operations Review 9 Chong Yip Street ProsperityREIT Prosperity REIT2016 2018Interim InterimResults ResultsPresentation Presentation 13
Slide 14: Property Income
1. Property Income Revenue Net Property Income (“NPI”) Trendy Centre Trendy Centre HK$26.3m HK$21.2m Prosperity Center Prosperity Center Prosperity HK$19.9m Prosperity HK$14.7m Place 11.9% Place 12.0% HK$37.4m New Treasure HK$29.9m New Treasure 9.0% 8.4% Centre Centre 16.9% 16.9% HK$8.1m HK$5.9m 3.6
Slide 15: Occupancy Rates
2. Occupancy Rates Portfolio Occupancy Rates Above 95% Since 2006 (As at 30 Jun 2018) The Metropolis Tower 88.3%* Prosperity Millennia Plaza 98.0% 9 Chong Yip Street 98.6% Prosperity Place 99.2% Trendy Centre 95.6% Prosperity Center (portion) 97.6% New Treasure Centre (portion) 100.0% Portfolio 96.0
Slide 16: Lease Expiry Profile
3. Lease Expiry Profile Portfolio Lease Expiry Profile 40.0% 36.2% 35.9% 35.0% 31.9% 31.1% 30.0% 25.0% 21.6% 21.8% 20.0% 15.0% 10.3% 11.3% 10.0% 5.0% 0.0% 2018 2019 2020 2021 and Beyond By Gross Rental Area By Gross Rental Income (GRA) (GRI) Expiry Profile in 2018 (As at 30 June 2018) 1H18 2H18 As %
Slide 17: Commercial Tenants at Prosperity Place
4. Commercial Tenants at Prosperity Place As at 30 Jun 2018, retail/service trade tenants accounted for around 47% of gross rentable area of Prosperity Place. Trade Mix of Retail Tenants (by Rental) 10% 11% Others F&B & Tea Club Cooking Kan’s Beauty 49% Beauty & Fitness Education 30% The Little Bee
Slide 18: Marketing Campaigns - Prosperity Place
5. Marketing Campaigns - Prosperity Place Chinese New Year Promotion Easter Promotion ProsperityREIT Prosperity REIT2016 2018Interim InterimResults ResultsPresentation Presentation 18
Slide 19: Key Takeaways
Key Takeaways Prosperity Place ProsperityREIT Prosperity REIT2016 2018Interim InterimResults ResultsPresentation Presentation 19
Slide 20: Key Takeaways
Key Takeaways 1. Prudent capital management to reduce finance cost ● Restructured and refinanced the term loan in November 2017; ● The reduced loan size and lowered interest margin attributed to substantial saving in finance cost in 1H2018. 2. Steady organic growth to continue ● Portfolio rental rev
Slide 21: Appendix - Key Milestones since IPO
Appendix - 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 2006 2007
Slide 22: Appendix - Portfolio Map
Appendix - 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. 9 Chong Yip New Treasure Street 3 Centre Property 7 GR
Slide 23: Appendix - Key Facts
Appendix - Key Facts Key Facts as at 29 Jun 20181 IPO Date 16 Dec 2005 Unitholder Structure IPO Price HK$2.16 5.79% Public CKAH3 Indicative Yield (based on 1H18 DPU of HK$0.0920 and closing unit price of HK$3.18 as at 29 Jun 2018) 81.4% 18.6% Number of Issued Units 1,477,126,162 Market Capitalizatio
Slide 24: Appendix - Contacts
Appendix - Contacts ARA Asset Management (Prosperity) Limited (as manager of Prosperity REIT) Ms. Mavis Wong Chief Executive Officer maviswong@ara.com.hk Mr. Vicho Chung Manager, Investments & Investor Relations vichochung@ara.com.hk Mr. Alex Lao Senior Analyst alexlao@ara.com.hk Units 5508-10, 55/F
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