Prosperity Real Estate Investment Trust · HKEX:808
Prosperity Real Estate Investment Trust — H1 2013 Earnings Presentation
33 slides from Prosperity Real Estate Investment Trust's earnings presentation, Aug 22, 2013
Slide 1: Interim Results
Interim Results For the six months ended 30 June 2013 22 August 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 2013 Interim Results Highlights Financial Review Operations Review Strengths and Prospects Appendix Prosperity REIT 2013 Interim Results 3
Slide 4: 2013 Interim Results Highlights
2013 Interim Results Highlights 4
Slide 5: 2013 Interim Results Highlights
2013 Interim Results Highlights DPU Growth of 12.7% DPU (HK$) 0.0744 0.0660 1H12 1H13 Underpinned by Strong Revenue and Stable Costs Revenue Distributable Income (HK$m) 167.1 (HK$m) 149.3 103.6 90.8 1H12 1H13 1H12 1H13 Prosperity REIT 2013 Interim Results 5
Slide 6: Outperformance in Unit Price and Yield
2013 Interim Results Highlights Outperformance in Unit Price and Yield Unit Price vs Index increase in 1H13 Yield as at 30 June 2013 5.1% 2.8% 6.0% 5.6% Prosperity REIT HS REIT Index HS Index HS Property Index 5.2% -8.2% -9.4% 3.6% Unit Price vs Index increase during 2.8% 29 June 2012 – 28 June 2013
Slide 7: Financial Review
PROSPERITY REIT hh S & # Sat Financial Review
Slide 8: Revenue and NPI Increase
Financial Review Revenue and NPI Increase Revenue Net Property Income (HK$m) (HK$m) 167.1 130.4 Cost-to-revenue 149.3 116.5 ratio remained at a healthy level of 22.0% 1H12 1H13 1H12 1H13 Net Property Income Property Valuation 1H2013 Trendy Centre As at 30 June 2013 Prosperity HK$15.2m Commercial Pla
Slide 9: 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$10m drawn as at 30 June 2013) Facility e
Slide 10: Capital Management
Financial Review Capital Management As at As at Change 30 Jun 2013 31 Dec 2012 (%) (unaudited) (audited) Total assets (HK$m) 8,500.3 8,004.0 +6.2% Total liabilities (HK$m) 2,204.7 2,184.8 +0.9% Net assets (HK$m) 6,295.5 5,819.2 +8.2% NAV per unit1 (HK$) 4.55 4.24 +7.3% Gearing ratio 20.9% 22.4% -1.5
Slide 11: Operations Review
PROSPERITY REIT ith FR fs ot 11
Slide 12: Portfolio Occupancy Rates Above 95% Since 2006
Operations Review Portfolio Occupancy Rates Above 95% Since 2006 Property As at As at 30 June 2013 30 June 2012 The Metropolis Tower 97.5% 99.2% Prosperity Millennia Plaza 99.1% 100.0% Harbourfront Landmark (portion) 100.0% 100.0% Prosperity Place 95.5% 97.7% Trendy Centre 98.0% 97.4% Prosperity Cen
Slide 13: Strong Assets Performance
Operations Review Strong Assets Performance Rental Reversion Rate Average Effective Unit Rent (HK$ psf) 37.8% 18.54 16.22 33.1% 1H12 1H13 1H12 1H13 * Absolute change Prosperity REIT 2013 Interim Results 13
Slide 14: Lease Expiry Profile by Gross Rental Income
Operations Review Lease Expiry Profile by Gross Rental Income 31 Dec 2012 (As at 31 Dec 2012) 2014 and 2013 The Metropolis Tower 33.6% 22.1% Prosperity Millennia Plaza 33.1% 46.8% Harbourfront Landmark (portion) 0.0% 99.9% Prosperity Place 35.8% 50.0% Trendy Centre 44.9% 41.6% Prosperity Center (por
Slide 15: AEIs Update: Prosperity Place Wholesale Conversion
Operations Review AEIs Update Prosperity Place Wholesale Conversion Following the wholesale conversion approval for Prosperity Place in 4Q2012, commercial tenants have been successfully introduced. New commercial tenants include a café, dancing school, education centers, beauty centers and retail sh
Slide 16: AEIs Update: Prosperity Place Wholesale Conversion (Con't)
Operations Review AEIs Update Prosperity Place Wholesale Conversion (Con’t) Commercial tenants already commenced business Café Playgroup Health Products Computer Products Dancing School Health Products Children Furnitures Commercial tenants under renovation Sin May Beauty Centre Beauty Products Spa
Slide 17: AEIs Update: Prosperity Place
Operations Review AEIs Update Prosperity Place Installation of the Elevator Management System (EMS) (Completed) Renovation of passenger lift lobbies and common corridors on selected floors (In Progress) After: Renovated passenger lift Before lobbies to attract high quality tenants Before After: Reno
Slide 18: AEIs Update: Prosperity Place (con't)
Operations Review AEIs Update Prosperity Place (con’t) Renovation of the lift lobbies on the car park floors (In Progress) Replacement of the concrete parapet wall on 3/F flat roof with a tempered glass wall (In Progress) After: Renovated lift lobbies on car park Before floors to upgrade building im
Slide 19: Strengths and Prospects
Strengths and Prospects 19
Slide 20: 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$) 0.0744 0.0694 0.0660 0.0595 0.0607 0.0554 0.0555 0.0544 0.0546 1H09 2H09 1H10 2H10 1H11 2H11 1H12 2H12 1H13 6.0%* yield as at 28 June 2013
Slide 21: Decentralization trend
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 22: Appendix
PRosreriy REITM SEX isa Appendix
Slide 23: Portfolio Map
Portfolio Map The Metropolis Trendy Tower 1 Centre 5 Total Gross Rentable Area: 1.22m sq.ft. GRA: 271,418 sq. ft. GRA: 173,764 sq. ft. Prosperity Prosperity 5 Millennia Plaza 2 Center Property 6 GRA: 217,955 sq. ft. GRA: 149,253 sq. ft. 7 Harbourfront New Treasure Landmark 3 Centre Property 7 Proper
Slide 24: The Metropolis Tower
The Metropolis Tower Property Profile (As at 30 June 2013) Location 10 Metropolis Drive, Hung Hom, Kowloon Year of Completion 2001 Gross Rentable Area 271,418 sq.ft. Appraised Value HK$2,923m (34.7% of total) Net Property Income HK$43.4m (33.3% of total) (1H13) Occupancy Rate 97.5% Prosperity REIT 2
Slide 25: Prosperity Millennia Plaza
Prosperity Millennia Plaza Property Profile (As at 30 June 2013) Location 663 King’s Road, North Point, Hong Kong Year of Completion 1999 Gross Rentable Area 217,955 sq.ft. Appraised Value HK$1,708m (20.3% of total) Net Property Income HK$28.7m (22.0% of total) (1H13) Occupancy Rate 99.1% Prosperity
Slide 26: Harbourfront Landmark Property
Harbourfront Landmark Property Property Profile (As at 30 June 2013) Location 11 Wan Hoi Street, Hung Hom, Kowloon Year of Completion 2001 Gross Rentable Area 77,021 sq.ft. Appraised Value HK$456m (5.4% of total) Net Property Income HK$9.2m (7.0% of total) (1H13) Occupancy Rate 100.0% Prosperity REI
Slide 27: Prosperity Place
Prosperity Place Property Profile (As at 30 June 2013) Location 6 Shing Yip Street, Kwun Tong, Kowloon Year of Completion 1996 Gross Rentable Area 240,000 sq.ft. Appraised Value HK$1,385m (16.4% of total) Net Property Income HK$17.6m (13.5% of total) (1H13) Occupancy Rate 95.5% Prosperity REIT 2013
Slide 28: Trendy Centre
Trendy Centre Property Profile (As at 30 June 2013) 682 Castle Peak Road, Lai Chi Kok, Location Kowloon Year of Completion 1998 Gross Rentable Area 173,764 sq.ft. Appraised Value HK$903m (10.7% of total) Net Property Income HK$15.2m (11.6% of total) (1H13) Occupancy Rate 98.0% Prosperity REIT 2013 I
Slide 29: Prosperity Center Property
Prosperity Center Property Property Profile (As at 30 June 2013) Location 25 Chong Yip Street, Kwun Tong, Kowloon Year of Completion 1999 Gross Rentable Area 149,253 sq.ft. Appraised Value HK$776m (9.2% of total) Net Property Income HK$11.7m (8.9% of total) (1H13) Occupancy Rate 100.0% Prosperity RE
Slide 30: New Treasure Centre Property
New Treasure Centre Property Property Profile (As at 30 June 2013) Location 10 Ng Fong Street, San Po Kong, Kowloon Year of Completion 1995 Gross Rentable Area 86,168 sq.ft. Appraised Value HK$283m (3.4% of total) Net Property Income HK$4.8m (3.7% of total) (1H13) Occupancy Rate 100.0% Prosperity RE
Slide 31: Income Statement
Income Statement 2013 2012 For the six months ended 30 June (HK$’000) (HK$’000) unaudited unaudited Revenue 167,098 149,317 Total property operating expenses (36,680) (32,830) Net property income 130,418 116,487 Interest income - 44 Manager’s fee (20,167) (17,759) Trust and other expenses (3,693) (3
Slide 32: Key Facts
Key Facts Key Facts as at 30 June 2013 IPO Date 16 Dec 2005 IPO Price HK$2.16 6.0% Indicative Yield (based on 1H13 DPU of HK$0.0744 and closing unit price of HK$2.47 as at 28 June 2013) Number of Issued Units 1,387,398,843 Market Capitalization HK$3.4 billion (US$439.3 million) Average Daily Trading
Slide 33: 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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