Prosperity Real Estate Investment Trust · HKEX:808
Prosperity Real Estate Investment Trust — H1 2011 Earnings Presentation
27 slides from Prosperity Real Estate Investment Trust's earnings presentation, Jun 30, 2011
Slide 1: Prosperity REIT 2011 Interim Results
Prosperity REIT 2011 Interim Results For the six months ended 30 June 2011
Slide 2: Contents
Contents Portfolio at a Glance 3-6 2011 Interim Results Highlights 7-9 Financial Review 10 - 14 Operations Review 15 - 20 Market Outlook 21 - 23 Growth Strategies g & Key y Facts 24 - 26
Slide 3: Portfolio at a Glance
P tf li att a Glance Portfolio Gl
Slide 4: Portfolio Map
Portfolio Map ¾ Prime beneficial of the continued decentralization trend in Hong Kong New Treasure Trendy Centre Centre GRA: GRA: 173,764 sq. ft. 86,168 sq. ft. No. of carpark p No. of carpark spaces: 79 spaces: 22 Prosperity Kowloon West Kowloon East Center GRA: , 149,253 sq. q ft. The M Th Metropo
Slide 5: Loyal and Diversified Tenant Base
Loyal and Diversified Tenant Base Proactive Lease Management Tenant Retention Rate 1H06 – 1H11 90.00% 80.00% 76.4% 70.4% 70.00% 60.3% 61.3% 60.00% 56.1% 51.3% 50.00% 50% 40.00% 30.00% 20.00% 10.00% 0.00% Jun‐06 Jun‐07 Jun‐08 Jun‐09 Jun‐10 Jun‐11 ¾ Tenant retention rate stays above 50% since IPO ¾ Lo
Slide 6: Portfolio Highlights
Portfolio Highlights Net Property Income 9.5% 3.7% For the six months ended 30 June 2011 The Metropolis Tower 32.4% Prosperity Millennia Plaza 12.6% Harbourfront Landmark ¾ Attractive portfolio of properties Prosperity Place that combines both growth and Trendy Centre stability Prosperity Center 14.
Slide 7: 2011 Interim Results Highlights
2011 IInterim t i R Results lt Hi Highlights hli ht
Slide 8: Results Highlights
Results Highlights Six months ended 30 June 2011 Unaudited (Y-o-Y Comparison) Sustainable Growth Distribution Per Unit HK$0.0595 ↑ 7.2% As at 30 June 2011 Unaudited (Compared with 31 December 2010) ¾ DPU increased byy 7.2% year-on-year Property Valuation HK$6,643 mil ↑11.9% Gearing Ratio 29.8% ↓(0.3
Slide 9: Benchmarking Performance
Benchmarking Performance R l ti Performance¹ Relative P f ¹ Att Attractive ti Yield Yi ld 120% Relative Performance of Prosperity REIT to 7.00% Hang Seng Index and Hang Seng REIT Index 115% 6.00% I 110% n 105% 5.00% d e 4.3% 100% 4.00% x 95% 6 50% 6.50% 3.00% 90% 1/1/2011 2/1/2011 3/1/2011 4/1/2011
Slide 10: Financial Review
PROSPERITY REITHS £5 Financial Review
Slide 11: Condensed Consolidated Statement of Comprehensive Income
Condensed Consolidated Statement of Comprehensive Income 1H11 1H10 For the six months ended 30 June unaudited unaudited (HK$’000) (HK$’000) Revenue 134,736 133,651 ¾ Cost to revenue Total property operating expenses (30,132) (27,849) ratio ti iincreasedd ffrom 20.8% (30 Jun 2010) Net property income
Slide 12: Condensed Consolidated Statement of Financial Position
Condensed Consolidated Statement of Financial Position Assets & Liabilities Unaudited as at 30 Jun 2011 (HK$’000) Investment p properties p 6,643,000 , , Property Bank balances and cash 319,644 HK$6,643 mil Valuation Other assets 10,049 Total Assets 6,972,693 Borrowings (2,038,165) Gearing Ratio1 29
Slide 13: Gearing Ratio
Gearing Ratio Gearing Ratio 29.8% Improved by 0.3%¹ (Compared to 31 December 2010) 40 0% 40.0% 38.0% 6643 6000 4864 5033 5225 4839 4887 36.0% 4548 5934 5529 5000 34.0% 5408 5256 4815 on 32.0% 4000 HK$ Millio 29.8% 30.0% 3000 28.0% 38.3% 36.0% 35.7% 35.0% 34.3% 33.3% 34.3% 33.5% 32.5% 31.7% 26.0% 200
Slide 14: Debt Management
Debt Management 2500 Total Debt: HK$ 2,200 mil Total Debt: Total Debt 1 HK$2,200 mil HK$ 1,900 mil 2000 Weighted Average 1.92% Cash Finance Cost 2 80% of the term loan was hedged at 1.335% 1500 Ò Term Loan due on 16 August 2015 excluding the interest K$ Million spread of 81bps Ò Free from financial
Slide 15: Operation Review
PROSPERITY REITHS £5 Operation Review
Slide 16: Occupancy Rate
Occupancy Rate Sustainable Occupancy Rate 100.0% 14.77 16.00 14.96 98.0% 15.00 96.0% 14.72 14.00 94.0% 14.07 92.0% 13.29 13.00 HK$ 90.0% 99.1% 12.00 98.3% 98.5% 88.0% 11.33 97.0% 11 00 11.00 93.2% 86.0% 10.00 84.0% 96.0% 82.0% 9.00 80.0% 8.00 Jun‐06 Jun‐07 Jun‐08 Jun‐09 Jun‐10 Jun‐11 Occupancy Rate
Slide 17: Asset Enhancement
PROSPERITY Asset Enhancement Page 17
Slide 18: Asset Enhancement
Asset Enhancement Prosperity p y Place – Lift Renovation Prosperity Place Lift Renovation – Before After (Design Stimulation) After (Actual) ¾ Replacement of new lift system controller and modernize the lift car to align to a commercial building Achievement… ¾ A speed increase ¾ Stable and comfortab
Slide 19: Asset Enhancement
Asset Enhancement Trendyy Centre – Façade ç and Main Lobbyy Renovation Trendy Centre Façade – Before After (Design Stimulation) After (Actual) ¾The lower portion of the façade and main lobby have been renovated Achievement… ¾A preeminent building landmark in the district ¾A modern commercial Grade A
Slide 20: Tenant Relations
Tenant Relations Excellent Tenant Relations The courteous and professional property management staff of Goodwell-Prosperity Property Services Limited create a friendly and caring atmosphere for the tenants, thereby strengthen our tenant relationships. During 1H11, Prosperity REIT maintained a close-
Slide 21: Market Outlook
PROSPERITY REITHS £5 Market Outlook
Slide 22: Economic Outlook for Hong Kong
Economic Outlook for Hong Kong GDP YoY growth (Quarterly) 15% 8.8% 10% 5% The EIU fforecasts Th t Hong H Kong Real GDP to grow 5.1% 0% in 2011 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 ‐5% 2005 2006 2007 2008 2009 2010 2011 ‐10% Source: Census and Statistics Department The Ec
Slide 23: Economic Outlook for Hong Kong
Economic Outlook for Hong Kong 9% 8.5% % Unemployment Rate 8% 7% 6% The unemployment rate is 5% trendingg down over the last 4% year. It was 3.5% for the 3 3% 2% 3.3% 3.5% months ended 30 June 11 1% 0% Dec‐00 Mar‐01 Jun‐01 Sep‐01 Dec‐01 Mar‐02 Jun‐02 Sep‐02 Dec‐02 Mar‐03 Jun‐03 Sep‐03 Dec‐03 Mar‐04
Slide 24: Growth Strategies & Key Facts
G Growth th Strategies St t i & K Key F Facts t
Slide 25: Growth Strategies
Growth Strategies Growth Focused Strategies Ò Organic Growth ; Proactive leasing efforts ; “Tip top” building management ; Close business relationships with tenants Ò Asset Enhancement Growth ; Aesthetic enhancements and upgrades ; Energy efficiency ; Prudent payback periods Ò Yield Accretive Acquis
Slide 26: Key Facts
Key Facts Key Facts as at 30 June 2011 IPO 16 December 2005 6.5% at $1.83 as at 30 June 2011 Indicative Yield (based on annualized DPU HK$0.0595 for 1H11) Total number of units 1 350 556 346 1,350,556,346 Market Capitalization HK$2.47 billion Average daily 1.5 million units (1H 2011) t di trading vo
Slide 27: Disclaimer
Disclaimer This document has been prepared by ARA Asset Management (Prosperity) Limited, in its capacity as the ARA Asset manager (“REIT Manager”) of Prosperity Real Estate Investment Trust (“Prosperity REIT”) solely for use at the Management presentation to analysts in relation to the announcement
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