Prosperity Real Estate Investment Trust · HKEX:808
Prosperity Real Estate Investment Trust — FY2022 Earnings Presentation
27 slides from Prosperity Real Estate Investment Trust's earnings presentation, March 2023
Slide 1: Final Results for the year ended 31 December 2022
Final Results For the year ended 31 December 2022 March 2023
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 Prosperity REIT 2022 Annual Results Presentation 3
Slide 4: Results Highlights
Results Highlights The Metropolis Tower Prosperity REIT 2022 Annual Results Presentation 4
Slide 5: 1. Financials
1. Financials Revenue Net Property Distributable Distribution Income Income Per Unit 2.5% 4.0% 8.4% 7.8% HK$445.0m HK$267.6m HK$434.0m HK$352.1m HK$245.0m HK$0.1763 HK$337.9m HK$0.1625 FY21 FY22 FY21 FY22 FY21 FY22 FY21 FY22 Tenant Occupancy Cost-to- Average Retention Rate revenue Effective (as at 3
Slide 6: 2. Returns
2. Returns ● 100% payout ratio and 150.7%1 total return since IPO. ● Resilient investment tool amidst difficult times. ● Unit buyback supports DPU. FY22 Buyback Execution No. of units bought back 14.89 million (~ 1.0% of total issued units) Total buyback amount HK$42.84 million Attractive yield2,3 8
Slide 7: Financial Review
Financial Review Prosperity Millennia Plaza Prosperity REIT 2022 Annual Results Presentation 7
Slide 8: 1. Income Statement
1. Income Statement (HK$’000) FY22 FY21 Revenue decreased by 2.5% due to Revenue 434,007 444,981 negative rental Total property operating expenses (96,102) (92,895) reversions Net property income 337,905 352,086 NPI decreased by Other income 806 580 4.0% Manager’s fee (49,691) (50,580) Trust and oth
Slide 9: 2. Financial Position
2. Financial Position As at As at Change 31 Dec 2022 31 Dec 2021 All bank loan facilities are unsecured with no Total assets (HK$’m) 9,982.5 10,185.6 -2.0% investment properties pledged Borrowings1 (HK$’m) 2,306.8 2,323.2 -0.7% Interest Rate4 Other liabilities (HK$’m) 577.2 599.8 -3.8% Fixed : Float
Slide 10: 3. Capital Management
3. Capital Management • 100% of our loan facilities are sustainability-linked. • Debt maturity profile evenly spread. • No refinancing needs till 2025 and no interest rate swap expiry till 2024. Debt Maturity Profile (HK$ million) 262 168 938 800 602 Nov-25 Aug-26 Nov-27 Term loans RCF Finance cost:
Slide 11: 4. Portfolio Valuation
4. Portfolio Valuation Valuation by Property Type Industrial As at 31 Dec 2022 HK$339m Industrial/Office 3.5% HK$1,886m ● Portfolio valuation at HK$9,801m, 19.2% down 1.7% compared to 31 Dec 2021. ● Capitalization rates from 3.7% to 4.3%. Grade A Office HK$5,926m 60.5% 16.8% Commercial HK$1,650m (HK
Slide 12: Operations Review
Operations Review 9 Chong Yip Street Prosperity REIT 2022 Annual Results Presentation 12
Slide 13: 1. Property Income
1. Property Income Revenue Net Property Income (NPI) New Treasure Centre New Treasure Centre HK$17.3m HK$12.9m Prosperity Center Prosperity Center HK$39.2m HK$30.1m The Metropolis Tower 4.0% 3.8% HK$121.8m 9.0% The Metropolis Tower 8.9% HK$93.6m 28.1% 27.7% Trendy Centre Trendy Centre HK$52.4m 12.1%
Slide 14: 2. Occupancy Rates
2. Occupancy Rates Portfolio Occupancy Rate Above 95% Since 2006 (As at 31 Dec 2022) The Metropolis Tower 95.7% Prosperity Millennia Plaza 94.5% 9 Chong Yip Street 94.8% Prosperity Place 95.0% Trendy Centre 98.3% Prosperity Center (portion) 99.2% New Treasure Centre (portion) 100.0% Portfolio 96.3%
Slide 15: 3. Lease Expiry Profile
3. Lease Expiry Profile Portfolio Lease Expiry Profile as at 31 Dec 2022 41.8% 41.7% 36.9% 37.3% 17.5% 17.7% 3.8% 3.3% 31-Dec-22 2023 2024 2025 and beyond By Gross Rental Area (GRA) By Gross Rental Income (GRI) Expiry Profile as at 31 Dec 2022 By Gross Rental Area By Gross Rental Income Period % of
Slide 16: 4. Capitalizing on Decentralization Trends
4. Capitalizing on Decentralization Trends • Change in business operation mode, size demand and cost savings drove office space reconfiguration and relocation. Prospective tenants continued to seek for high quality decentralized office buildings. • PREIT registered 35% GRA of new letting1 in FY22 re
Slide 17: 5. Trade Mix of New Letting
5. Trade Mix of New Letting IT / Technology and services trades accounted for 36% GRA of new letting1 in FY22. 13% 12% IT / Technology 3% Services Consultancy / Research 24% Finance / Investment New Letting by Trade Logistics 28% Manufacturing / Trading Textile / Garment 5% Others 3% 12% Note: 1. Ex
Slide 18: 6. AEIs at The Metropolis Tower
6. AEIs at The Metropolis Tower • Strategic Hung Hom MTR location, being interchange station of Tuen Ma Line & East Rail Line with cross harbour extension • Spacious main lobby recently refurbished with contemporary ✓ Unlock larger tenant base design and green element, typical floors renovation in p
Slide 19: 6. AEIs at The Metropolis Tower (Cont'd)
6. AEIs at The Metropolis Tower (Cont’d) New Main Lobby New Typical Floor Prosperity REIT 2022 Annual Results Presentation 19
Slide 20: Key Takeaways
Key Takeaways Prosperity Place Prosperity REIT 2022 Annual Results Presentation 20
Slide 21: Key Takeaways
Key Takeaways 1. Distribution per unit (DPU) decreased by 7.8% Y-o-Y ● Distribution yield of 8.2%1. ● Maintained 100% payout ratio since listing. ● Stable investment as proven in different economic cycles. 2. Net Property Income (NPI) decreased by 4.0% Y-o-Y ● Mainly due to negative rental reversion
Slide 22: ESG Achievements
ESG Achievements MSCI ESG Rating “B” Global Real Estate Sustainability Rated as “Negligible Risk” in Benchmark (GRESB) 2022 Sustainalytics ESG Risk Rating Achievements ✓ Highest Five-Star Rating ✓ Green Star ✓ Highest “A” Ranking in Public Disclosure BEAM Plus Certificates by Hong 100% of Prosperity
Slide 23: Appendix
Appendix Prosperity REIT 2022 Annual Results Presentation 23
Slide 24: Key Milestones since IPO
Key Milestones since IPO 100% of financing sustainability-linked Acquired 9 Chong Yip Secured first Inclusion in FTSE Sustainalytics ESG ❖ Secured HK$1,970 million Street for approx. HK$1 sustainability-linked EPRA Nareit Risk Rating sustainability-linked Listed on Hong Kong Stock billion, expanding
Slide 25: Portfolio Map
Portfolio Map The Metropolis Trendy Tower 1 Centre 5 Total Gross Rentable Area: 1.28m sq. ft. 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 GRA: 136,595
Slide 26: Key Facts
Key Facts Key Facts as at 30 Dec 20221 IPO Date 16 Dec 2005 Unitholder Structure IPO Price HK$2.16 8.17% Public CKAH3 Indicative Yield (based on FY22 DPU of HK$0.1625 and closing unit price of HK$1.99 as at 30 Dec 20221) 81.8% 18.2% Number of Issued Units 1,508,461,255 Market Capitalization HK$3.0 b
Slide 27: Contacts
Contacts ARA Asset Management (Prosperity) Limited (as manager of Prosperity REIT) Ms. Mavis Wong Chief Executive Officer Mavis.Wong@esr.com Mr. Vicho Chung Manager, Investments & Investor Relations Vicho.Chung@esr.com Mr. Kenny Kwong Senior Analyst Kenny.Kwong@esr.com Unit 901, Level 9, Fortune Met
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