Fortune Real Estate Investment Trust · HKEX:778
Fortune Real Estate Investment Trust — FY2024 Earnings Presentation
55 slides from Fortune Real Estate Investment Trust's earnings presentation, Mar 4, 2025
Slide 1: Financial Results
Financial Results For the year ended 31 December 2024 4 March 2025
Slide 2: Go Green and Paperless with us
Go Green and Paperless with us Scan the QR Codes for our Financial Results Presentation Announcement 中文版簡報 中文版公告
Slide 3: Results Overview
Results Overview CNY “Picking the Green” Tradition at Fortune Malls
Slide 4: FY2024 Results Overview
FY2024 Results Overview 8.9% Healthy Stabilizing Dividend Yield Balance Sheet Asset Performance 95.0% HK$723.4 M 25.6% Improved occupancy Distributable Income Gearing 79% High retention HK$0.3559 55% DPU Fixed Rate Debt Sustained Traffic FORTUNE REIT | FY2024 Financial Results | Page 4
Slide 5: FY2024 Financial Highlights
FY2024 Financial Highlights Revenue (HK$) NPI (HK$) Finance Cost1 (HK$) 1H $871.8M -4.1% YoY 1H $633.1M -5.8% YoY 1H $198.1M +30.2% YoY 2H $874.5M -0.3% YoY 2H $620.2M -1.2% YoY 2H $198.8M 0.0% YoY FY $1,746.3M -2.2% YoY FY $1,253.3M -3.5% YoY FY $396.9M +13.1% YoY Most revenue declines occurred in
Slide 6: High Base Rent Model Ensures Stable Revenue Stream
High Base Rent Model Ensures Stable Revenue Stream Over 90% of revenue from stable streams 78.0% Base rental1: HK$1,361.7M FY2024 Revenue 14.0% Charge-out income2: HK$245.4M HK$1,746.3M 7.0% Carpark income: HK$122.8M 0.6% Turnover rent: HK$10.2M 0.4% Other income: HK$6.2M Notes: 1. Including license
Slide 7: Capital Management
Capital Management Exterior of Fortune Metropolis
Slide 8: Prudent Debt Management
Prudent Debt Management Debt Maturity Profile1 (HK$M) Loan in SGD3 25.6% 4.0% Loan in HKD Gearing Effective borrowing cost2 3,800 2,500 1.9 yrs 2.0 yrs 571 1,800 Avg. debt maturity Avg. swap maturity 1,200 Oct 2025 2026 2027 2028 600 Un-committed 2.8x 55% Interest coverage Interest cost hedged 23.9%
Slide 9: Stable Portfolio Valuation
Stable Portfolio Valuation Portfolio Total Hong Kong Portfolio Singapore Asset HK$ 38,056M HK$ 37,513M SG$ 95M 2.4% from Dec 2023 2.4% from Dec 2023 Remains Unchanged Per sf (G) retail HK$11,800 psf NAV Per Unit Acquisition of Stars of HK$ 13.21 Per carpark lot HK$784,000 Kovan Property 5.2% from De
Slide 10: Portfolio Performance
Portfolio Performance New F&B tenant @Ma On Shan Plaza
Slide 11: Portfolio Performance Highlights
Portfolio Performance Highlights Occupancy A healthy and steady Occupancy picked up in +WOO 95.0% occupancy throughout and Fortune Metropolis, while the year as we prioritize Smartland secured anchor tenants As at 31 Dec 2024 income stability and its occupancy rebounded Retention Proactive leasing s
Slide 12: A Strategic Focus on Necessity Trades
A Strategic Focus on Necessity Trades Necessity Trades WALE Lease Expiry in 2025 72% 1.3 Yrs 1.1million sq.ft OR 44% of rental By rental income By rental income By Gross Rentable Area Tenant’s Trade Mix By Gross Rental Income (as at 31 Dec 2024) 27.7% Services & Education 25.7% 25.8% Food & Beverage
Slide 13: 10+ New-To-Portfolio F&B Brands
10+ New-To-Portfolio F&B Brands Continuous dining excitements to sustain mall appeal Grab & Go Michelin-recommended Bubble tea Bubble tea S’pore soy-based caterer opened 1st HK store @Metro Town Japanese Chains Popular yakiniku brand Renowned ramen chain “Sizzle-It-Your-Way” DIY Large gyudon chain o
Slide 14: Impactful Marketing
Impactful Marketing Christmas celebration event featuring a celebrity guest
Slide 15: Marketing & Events to Drive Footfall and Tenants' Sales
Marketing & Events to Drive Footfall and Tenants’ Sales Chinese New Year Easter Summer Holiday Christmas FORTUNE REIT | FY2024 Financial Results | Page 15
Slide 16: Targeted Campaigns and Rewards Programs
Targeted Campaigns and Rewards Programs Education showcase in carnival vibe Targeted promotional campiagns Wet market promotion Free parking promotion F&B promotion Spending rewards & lucky draws FORTUNE REIT | FY2024 Financial Results | Page 16
Slide 17: Customer Loyalty Empowered by Digital Engagements
Customer Loyalty Empowered by Digital Engagements Fortune Malls APP enhanced Effective marketing via social platforms customer retention, driving generate massive coverage, gain user- tenant sales from online to generated content (UGC), ultimately offline through Fortune+ loyalty engaging customers
Slide 18: Stable Mall Traffic Despite Market Challenges
Stable Mall Traffic Despite Market Challenges Resilience indicating strong mall appeal Sales Leakage to Improved Hourly Stable Competitive Markets Carpark Income Mall Footfall -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -
Slide 19: Enhancement Initiatives
Enhancement Initiatives Revitalized atrium space @+WOO
Slide 20: +WOO Completed AEIs in July 2024
+WOO Completed AEIs in July 2024 CAPEX HK$300M Enhanced ceiling aiming to save energy of main atrium LED screen and featured ceiling Completion July 2024 Occupancy 94.7% Dec 2024 Immediate Catchment 270K population & expanding Modernized interior with more prominent shop front Revamped entrance with
Slide 21: +WOO Revitalized with Upgraded Amenities
+WOO Revitalized with Upgraded Amenities Inclusive amenities New directory and service counter Improved accessibility with new ramp Kid’s playground, engaging games and visuals Nursery room Smart toilet with digital display Free filter water FORTUNE REIT | FY2024 Financial Results | Page 21
Slide 22: +WOO Picked Up Occupancy with New Move-ins
+WOO Picked Up Occupancy with New Move-ins Sportswear > < Outdoor fashions Homeware > < Food & Beverage > < Convenience FORTUNE REIT | FY2024 Financial Results | Page 22
Slide 23: +WOO Reinforced as the Leading Mall in Tin Shui Wai
+WOO Reinforced as the Leading Mall in Tin Shui Wai 30% 19 21% Lifestyle & F&B New-to-Mall F&B Entertainment (by GRA) (Target by GRA ) 26% Homewares Education & 12% 150 & Household Wellness (by GRA) Tenants (by GRA) others include fashion, retails etc 24H Gym F&B Education Cinema Game House FORTUNE
Slide 24: Waldorf Avenue – Enhancement of Space and Design
Waldorf Avenue – Enhancement of Space and Design CAPEX Commencement Target Completion HK$ 9M Feb 2025 3Q2025 One of Tuen Mun’s most bustling retail destinations ▪ Minimal rental downtime via phasing out of construction ▪ Shopping ambiance to be elevated with an inviting entrance, a brighten corridor
Slide 25: Laguna Plaza – Repositioning of Basement Floor
Laguna Plaza – Repositioning of Basement Floor CAPEX Commencement Target Completion HK$ 32M Feb 2025 4Q2025 12k apartments in Laguna City & Sceneway Garden nearby ▪ ~26,000 sq.ft. reconfiguration opportunity that involves downsizing a supermarket by 40% to ~13,500 sq.ft. and creates new F&B and reta
Slide 26: Outlook & Strategies
Outlook & Strategies Fortune City One
Slide 27: Outlook and Strategies
Outlook and Strategies Market Cost and Portfolio Dynamics Capital Management Optimization ▪ Frequent outbound travel by locals ▪ Cost optimization and operational ▪ Flexible leasing strategy focuses on and tourists’ changing spending efficiency initiatives to ease pressure maintaining stable occupan
Slide 28: Sustainability
Sustainability Solar panels @Fortune City One
Slide 29: Committed to Long-Term Sustainability Goals
Committed to Long-Term Sustainability Goals Emission Energy Water Waste Scope 1 & 2 Energy Water Waste GOALS GHG Emissions Consumption Intensity Recycling Rate Against a 2019 baseline 46% reduction 30% reduction 10% reduction 15% by 2030 by 2035 by 2035 by 2035 PROGRESS 39.7%1 15.7% 19.2% 7.7% By en
Slide 30: From Plate to Planet - Tackling Food Waste in Fortune Malls
From Plate to Planet - Tackling Food Waste in Fortune Malls Participating Fortune Malls since 2022 8 352 Fortune Malls tonnes Participated Food Waste Collected 219 +35% tonnes 2024 Reduction in GHG Emission Collection VS 2023 Delivery of food waste to organic resource recovery centre for recycling F
Slide 31: Persistent Commitments to Sustainability
Persistent Commitments to Sustainability 85% GRA 100% Equipped with BMS HK assets certified as Green Buildings 62 227 Events by NGOs & social Volunteer hours enterprises offered with in 2024 venue support 62% 216 kgs of produce Sustainability-linked Grown and donated by Loans Farm@Fortune in 2024 FO
Slide 32: Appendix
Appendix Festive displays and decoration @Ma On Shan Plaza
Slide 33: Investment Highlights
Investment Highlights HK$8.1B HK$38.1B HK$13.21 72% income MSCI index Highest 5-Star Market Portfolio NAV from non-discretionary Inclusion in World GRESB Rating Cap Valuation per Unit trades Small Cap Fortune City One Ma On Shan Plaza +WOO Fortune Metropolis Laguna Plaza 20+ years A pure-play in of
Slide 34: Sustainability Achievements Highlights
Sustainability Achievements Highlights 5-Star 1st HK REIT Received SBTi’s approval Highest rating in GRESB for near-term emission reduction for 4 consecutive years target 8-Yr AA- Low Risk in consecutive Sustainability Rating by Morningstar Hang Seng Corporate Hong Kong Quality Assurance Sustainalyt
Slide 35: A Hong Kong-Focused Neighborhood Mall Portfolio
A Hong Kong-Focused Neighborhood Mall Portfolio 17 Assets 2 Flagship Malls in HK 16 neighborhood malls in Hong Kong 1 suburban retail property in Singapore 1 Fortune City One New 3 10 2 +WOO Territories Tai Wai 1 City One 8 5 Fortune Metropolis 15 16 6 Tsuen Wan West 11 3 million sq.ft. 12 Kowloon D
Slide 36: Portfolio Valuation Breakdown
Portfolio Valuation Breakdown (13) Stars of Kovan Portfolio Valuation1 (HK$M) Property 1.4% (1) Fortune City One 7,808 Portfolio valuation (2) +WOO 7,529 (3) Ma On Shan Plaza 5,425 HK$38,056M (4) Metro Town 3,446 (9) 3.1% (1) 20.5% (5) Fortune Metropolis 2,366 (8) 4.5% (6) Belvedere Square 2,299 (7)
Slide 37: Stable Portfolio Occupancy
Stable Fortune REIT’s portfolio GRA(sq.ft.) Occupancy Portfolio 31 Dec 24 30 Jun 24 31 Dec 23 1. Fortune City One 414,469 95.2% 97.1% 97.8% Occupancy 2. +WOO 665,244 94.7% 93.4% 91.8% 3. Ma On Shan Plaza 310,084 98.2% 98.4% 98.7% 4. Metro Town 180,822 100.0% 100.0% 100.0% 5. Belvedere Square 276,862
Slide 38: Resilient Asset Class with Attractive Yield
Resilient Asset Class An attractive distribution yield of 8.9% with Attractive Yield 8.9% 6.5% 4.6% 3.6% 3.7% 2.2% 1.7% Fortune HS Property HS Index HK 10Y Govt. HK US 10Y China 10Y 2 REIT's Index Dividend Bond Yield Composite Treasury Govt. 2 2 Annualized Dividend Yield 2 Interest Rate 2 Yield Bond
Slide 39: Income Statement Illustrations
Income Statement Illustrations Finance Cost1 | Revenue NPI DPU Eff. Borrowing Cost HK$M HK$M HK$M HK cents 1,785.9 1,746.3 396.9 50. 00 50 1500 400.00 400 1,299.4 351.1 1750 FY 1450 1700 FY 1,253.3 FY 1,400. 00 1400 40.38 1650 45. 00 1350 1,600. 00 1600 1550 1300 350.00 350 1500 FY FY 1250 35.59 145
Slide 40: Income Statement (FY2024)
Income (HK$’M) 2024 2023 YoY% Statement Revenue 1,746.3 1,785.9 -2.2% Property operating expenses (454.2) (446.2) +1.8% (FY2024) Manager’s performance fee (38.8) (40.2) -3.5% Net property income 1,253.3 1,299.4 -3.6% Manager’s base fee (116.2) (118.2) -1.7% Finance costs 1 (501.7) (548.1) -8.5% Chan
Slide 41: Income Statement (2H2024)
Income (HK$’M) 2H2024 1H2024 HoH% 2H2023 YoY% Statement Revenue 874.5 871.8 +0.3% 877.2 -0.3% Property operating expenses (235.1) (219.1) +7.3% (230.2) +2.1% Manager’s performance fee (19.2) (19.6) -2.0% (19.4) -1.2% (2H2024) Net property income 620.2 633.1 -2.0% 627.5 -1.2% Manager’s base fee (58.1
Slide 42: Balance Sheet
Balance Sheet HK$’000 31 Dec 2024 31 Dec 2023 Gearing ratio Current assets 198,924 205,134 25.6% Non-current assets 38,260,513 39,305,164 Total assets 38,459,437 39,510,298 Portfolio valuation Current liabilities 4,310,885 1,744,536 HK$38,056M Non-current liabilities 7,217,799 9,685,662 Total liabil
Slide 43: Distribution Details
DISTRIBUTION DETAILS 20 March 2025 E x -d a te 17.36 HK cents 21 March 2025 F in a l D P U f o r the ye a r e n d e d 3 1 D e c 2 0 2 4 R e co r d D a te 25 April 2025 P a ym e nt D a te FORTUNE REIT | FY2024 Financial Results | Page 43
Slide 44: Acquisitions for Growth
Acquisitions for Growth Asset Portfolio grew >10 times in 20+ years AUM increased to HK$38.1 billion from HK$3.3 billion since IPO 17 17 17 14 16 Malls Malls 16 Malls Malls Malls 11 Malls Malls +WOO Laguna Plaza Stars of Kovan Property 5 Provident Square Malls Rhine Avenue Metro Town Caribbean Squar
Slide 45: Proven Track Record in AEIs
Proven Track Record in AEIs Property / Enhanced Area Completion CAPEX (HK$) ROI1 Metro Town –10,000 sf 1Q 2023 5.3M 11% +WOO Phase 1 – 200,000 sf 3Q 2019 150M 10.5% Belvedere Square - 126,000 sf 4Q 2015 80M 20.3% Ma On Shan Plaza - 59,000 sf 4Q 2013 15M 60% (previously a supermarket) Fortune City On
Slide 46: AEIs at +WOO – The transformation
AEIs at +WOO – The transformation BEFORE BEFORE BEFORE Escalator relocated to open up prime atrium space Connecting platform removed Iconic mascots as photo spots. New ceiling Create a coffee shop space and better retail to improve energy efficiency and ambience shopfront Brighter and modernized int
Slide 47: AEIs at Metro Town
AEIs at Metro Town CAPEX Completion Return on Investment HK$5.3M Jan 2023 11% ▪ Subdivided a 8,500 sq.ft. vacant kindergarten together with 2 adjacent shops into three shops to cater for new demand ▪ Introduced new F&B and household tenants ▪ More efficient layout with widen and more prominent shop
Slide 48: AEIs at Belvedere Square
AEIs at Belvedere Square Phase 3 CAPEX Completion ROI HK$80M 4Q2015 >20% Enhanced offerings after AEIs F&B Toy Shop Health Food FORTUNE REIT | FY2024 Financial Results | Page 48
Slide 49: AEIs at Fortune City One
AEIs at Fortune City One CAPEX Completion ROI HK$150M 3Q2013 >20% FORTUNE REIT | FY2024 Financial Results | Page 49
Slide 50: Hong Kong Economy – Macro Conditions
Hong Kong Economy – Macro Conditions 3.4 3.4 4.3 GDP 3.0 3.1 2.9 2.6 1.9 2.4 1.1 YoY % Change -3.6 -3.5 4.8 -4.3 +2.4% YoY GDP in real terms Q4 2024 4Q 4Q 4Q 4Q 4Q 4Q 4Q 4Q 4Q 4Q 4Q 4Q 4Q 4Q 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 5.7 4.3 4.9 Composite 3.7 2.9 2.4 2.5 2
Slide 51: Hong Kong Retail Sales and Restaurant Receipts
Hong Kong Retail Sales and Restaurant Receipts Retail Sales Value (YoY %) ▪ In 2024, total retail sales value decreased by 30% 7.3% YoY, reaching 73.2% of 2018-level in Dec 2024. 20% Supermarkets ▪ Impacted by increased outbound travels and 10% changing consumption preferences, sectors -3.1% Total R
Slide 52: Tourist Arrivals and Outbound Travels
Tourist Arrivals and Outbound Travels Inbound Tourist Arrivals 5,000,000 667.2% 100 0.0% ▪ 44.5 million tourists (i.e. an average of 3.7 173.7% million per month) visited HK in 2024, 4,000,000 marking a 30.9% YoY increase. 76% came 3,000,000 38.6% 100 .0% from Mainland China. 17.3% 20.2% 14.0% 18.3%
Slide 53: Singapore - Retail Market Performance
Singapore - Retail Market Performance S$B Retail sales picking up steadily post-covid +4.4% GDP 5.00 50% +5.0% YoY in 4Q2024 Retail Sales Value (Excl. Motor Vehicles) Online Sales Proportion YoY +5.7% YoY in 3Q2024 4.02 For 2024 4.00 40% 3.22 3.00 30% -0.9% Retail Sales1,2 2.00 20% -4.0% YoY in Dec
Slide 54: Disclaimer
Disclaimer This document has been prepared by ESR Asset Management (Fortune) Limited, in of the Fortune REIT’s financial or trading position or prospects. This document its capacity as the manager (“REIT Manager”) of Fortune Real Estate Investment may contain forward looking statements. Investors ar
Slide 55: Contact Us
CONTACT US ESR Asset Management (Fortune) Limited Justina Chiu Chief Executive Officer justina.chiu@esr.com Jenny Hung Deputy Chief Executive Officer jenny.hung@esr.com Maggie Mui Assistant Director, Investor Relations maggie.mui@esr.com www.fortunereit.com www.fortunemalls.com.hk
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