Spring Real Estate Investment Trust · HKEX:1426
Spring Real Estate Investment Trust — FY2024 Earnings Presentation
27 slides from Spring Real Estate Investment Trust's earnings presentation, Mar 24, 2025
Slide 1: Annual Results 2024 Presentation
ANNUAL RESULTS 2024 PRESENTATION 24 Mar 2025
Slide 2: Disclaimer
Disclaimer This presentation may contain information which is proprietary, confidential and/or legally privileged and has been prepared by Spring Asset Management Limited, in its capacity as the manager (the “Manager”) of Spring Real Estate Investment Trust (the “Trust”). This presentation is being
Slide 3: FY2024 RESULTS HIGHLIGHTS CCP PROPERTY OPERATION REVIEW HUAMAO PLACE OPERATION REVIEW
1 FY2024 RESULTS HIGHLIGHTS 2 CCP PROPERTY OPERATION REVIEW 3 HUAMAO PLACE OPERATION REVIEW 4 UK PORTFOLIO OPERATION REVIEW 5 OUTLOOK & STRATEGIC PRIORITIES
Slide 4: FY2024 Results Highlights
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Slide 5: FY2024 Results Highlights
FY2024 Results Highlights Spring REIT demonstrated its resilience and registered a 5.1% YoY decrease in net property income (NPI), primarily attributable to the pressures in the Beijing office market. Conversely, Huamao Place shopping mall in Huizhou delivered an encouraging performance with NPI inc
Slide 6: Financial Summary
Financial Summary Operating Results (in RMB million) FY2024 FY2023 YoY Chg Revenue 702.47 732.45 (4.1%) Property operating expenses (187.18) (189.19) (1.1%) Net property income 515.29 543.26 (5.1%) Net property income margin 73.4% 74.2% -0.8 ppts G&A expenses (88.73) (89.01) (0.3%) Cash interest exp
Slide 7: Proven DPU Track Record
Proven DPU Track Record Maintained a steady distribution for unitholders amid challenging macroeconomic environment, with an full-year DPU yield of 8.9%1. (HK cents) Full-year DPU yield of 8.9%1 11.2 11.2 10.5 10.8 10.0 10.0 10.0 9.5 8.9 9.0 9.0 7.6 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 2019 2020 2021
Slide 8: Capital Management
Capital Management Debt profile (notional amounts) Unhedged HKD loan of HKD190mn, 3.3% 97% of loans either hedged or at stable rate RMB loan under LPR, 12.7% RMB668mn GBP47.8mn Hedged HKD loan, 75.7% Hedged GBP loan, 8.3% HKD4,305mn Weighted average cash interest rate 3.6%(vs FY2023: 3.6%) p.a. Benc
Slide 9: CCP Property Operation Review
CCP PROPERTY OPERATION REVIEW
Slide 10: Beijing Leasing Market Condition
Beijing Leasing Market Condition • Transactions were primarily driven by relocation and renewal demand from existing tenants. New demand for space remained limited, and many existing tenants opted to reduce expenses or scale back their operations. • Competition among landlords was intense, with aggr
Slide 11: Beijing Future Grade-A Office Supply
Beijing Future Grade-A Office Supply • No new supply in CBD in 2025. • Of the 699,000 sqm GFA of new supply in 2026, 510,000 sqm will be located in the CBD area, representing for 4 properties in Zhongfu area, with 48% of this CBD supply designated for self-use. Grade-A office supply by year (sqm, GF
Slide 12: Comparison of Grade-A Office Markets across China
Comparison of Grade-A Office Markets across China • Beijing has highest office occupancy of 87%. All other reference cities have occupancy rate under 80% • Low new supply in Beijing in the next 4 years, only 1.9% p.a. of existing stock (vs avg. 7.5% p.a. of other reference cities) Grade-A office mar
Slide 13: The CCP Property: Operations Summary
The CCP Property : Operations Summary • Beijing office market has remained subdued, with limited new lettings and many existing tenants looking to cut costs or downsize. Most landlords focused on retaining their existing tenants through rent reductions and other tenant-friendly initiatives. • Proper
Slide 14: The CCP Property: Leasing Performance
The CCP Property : Leasing Performance • Average monthly unit rent decreased slightly by 1.7% HoH and 2.2% YoY in 2H 2024 owing to mild negative rental reversion • Average occupancy rate decreased to 84.4% for 2H 2024, but rebounded to 88.5% as at 31 Dec 2024 • FY2024 Retention rate: 68% (FY2023: 75
Slide 15: The CCP Property: Diverse and High-quality Tenant Mix
The CCP Property : Diverse and High-quality Tenant Mix Tenants by industry Top 5 tenants As % of leased office GFA Tenants % of total leased GFA Epson 6.3% Education/ Technology media/sports/ Zhong De Securities 4.5% Business center and others 4% 3% Financial institution/ Global Law Office 4.4% 22.8
Slide 16: Huamao Place Operation Review
HUAMAO PLACE OPERATION REVIEW
Slide 17: Huizhou Retail Market Overview
Huizhou Retail Market Overview • Huizhou’s shopping mall industry has experienced robust growth, driven by high economic growth potential, ongoing urbanisation, consumption upgrading, expanding retail facilities, and continued government support. • 35 shopping malls in Huizhou with overall retail GF
Slide 18: Huamao Place in Huizhou: Financial Summary
Huamao Place in Huizhou : Financial Summary • Huamao Place in Huizhou delivered an encouraging 2024 performance. Despite the muted economy, total revenue and NPI increased by 3.0% and 1.7% YoY respectively. • Property operating expenses increased by 5.9% YoY, mainly attributable to provision for ren
Slide 19: Huamao Place in Huizhou: Operations Summary
Huamao Place in Huizhou : Operations Summary • Continued to enhance Huamao Place’s positioning as a unique high-end lifestyle mall, further strengthening its reputation as a premier shopping and leisure destination • To differentiate the mall from competitors and reinforce its exclusivity, a variety
Slide 20: Huamao Place in Huizhou: Leasing Strategies
Huamao Place in Huizhou : Leasing Strategies Debut brands in Huizhou Sustainability VIP loyalty programme Tenant reconfigurations Green building Marketing Social media and events exposure 19
Slide 21: Huamao Place in Huizhou: Tenant Mix
Huamao Place in Huizhou : Tenant Mix Tenants by industry Top 5 tenants As % of leased GFA Tenants’ trade sector % of total leased GFA F&B 4.6% Others Tech and Automobiles 2.0% Lifestyle Entertainment Healthcare and Beauty 2% 3% Household 1.9% 11.7% 4% Food and Beverages 5% Household 1.6% Household 6
Slide 22: Huamao Place in Huizhou: Case Study
Huamao Place in Huizhou : Case Study The growing popularity of anime culture has created new demand in shopping malls. In response, we introduced relevant tenants and hosted multiple themed events which generated significant buzz and footfall. 21
Slide 23: UK Portfolio Operation Review
UK PORTFOLIO OPERATION REVIEW
Slide 24: Location of the properties
POSTCODE Location of the properties 0 fe o° : 13 Guach Soest WATE abe ee, Kwik Ft_| Middlesbrough | 3 Lansdowne Road Ts4 20 Kwik Fit | Plymouth 125-129 Alexandra Road | PL47EG Po. Kwik Fit | Loughborough | 24-29 The Rushes LE11 58G Kwik Ft | Truro Treaswalls Road TRI 3PY o q CartralTyes | Gloucester
Slide 25: UK Portfolio: Long-term and quality cash flow
UK Portfolio : Long-term and quality cash flow Annual contract Occupancy rate rental income 100% GBP4.64 mn • As at 31 Dec 2024, Spring REIT’s UK Portfolio comprises 83 separate commercial properties, following the expiration of the ground lease and the commercial lease of the property located in Is
Slide 26: Outlook & Strategic Priorities
OUTLOOK & STRATEGIC PRIORITIES
Slide 27: Outlook & Strategic Priorities
Outlook & Strategic Priorities Beijing: Prioritize occupancy and deliver exceptional service to thrive in a subdued market • The Beijing office market is likely to remain subdued in 2025. Competition among landlords is expected to remain fierce as tenants prioritise cost-saving measures or seek high
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