Prosperity Real Estate Investment Trust · HKEX:808
Prosperity Real Estate Investment Trust — H1 2014 Earnings Presentation
26 slides from Prosperity Real Estate Investment Trust's earnings presentation, Aug 14, 2014
Slide 1: Interim Results
Interim Results For the 6 months ended 30 June 2014 14 August 2014
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 2014 Interim Results Highlights Financial Review Operations Review Strategies Appendix Prosperity REIT 2014 Interim Results Presentation 3
Slide 4: 2014 Interim Results Highlights
2014 Interim Results Highlights 4
Slide 5: 2014 Interim Results Highlights
2014 Interim Results Highlights Revenue Distributable Distribution Income Per Unit 18.4% 11.3% 9.5% HK$197.8m HK$115.3m HK$103.6m HK$0.0815 HK$167.1m HK$0.0744 1H13 1H14 1H13 1H14 1H13 1H14 • Contribution from newly acquired 9 Chong Yip Street - Additional HK$15.6m revenue - Certain operating costs
Slide 6: Attractive yield: 6.7%
2014 Interim Results Highlights Attractive yield: 6.7%1 Yield as at 30 June 2014 6.7%1 6.2% 5.8% 3.6% 3.0% 2.9% 2.0% 0.16% 0.01% Prosperity REIT HS High Dividend HS REIT Index HS Index HS Property Hong Kong HK 10 year Bank fixed Bank savings Yield Index Index Office Market Exchange Fund deposit depo
Slide 7: Financial Review
PROSPERITY REIT &S @ & feat Financial Review
Slide 8: Income Statement
Income Statement Additional income from 9 Chong Yip Street and HK$’000 1H14 1H13 Change resilient operation Unaudited Unaudited results contributed to Revenue 197,793 167,098 +18.4% strong YoY increase Total property operating (42,637) (36,680) +16.2% expenses Net property income 155,156 130,418 +19
Slide 9: Portfolio Valuation
Portfolio Valuation Valuation by Property Type As at 30 Jun 2014 Portfolio Valuation Commercial HK$1,865m 19.4% HK$9,609m 12.8% in 1H14 59.9% 17.7% Industrial/Office HK$1,702m Grade A Office HK$5,751m 3.0% Industrial HK$291m Major contributor to portfolio valuation growth 9 Chong Yip Street Appraise
Slide 10: Debt Maturity Profile
Debt Maturity Profile ~55% borrowings on fixed rate1 Facility (As at 30 Jun 2014) Maturity Aug 2015 Jan 2017 Jan 2019 HK$1,770m Secured Term Loan HK$1,770m 5 years from 2010 New facilities obtained 80% (HK$1,416m) hedged at in Jan 14 for partly 1.335%, excluding 81 bps spread financing acquisition o
Slide 11: Financial Position
Financial Position Gearing still at healthy level As at As at Change 30 Jun 2014 31 Dec 2013 (%) (unaudited) (audited) Increase due to Total assets (HK$m) 9,678.8 8,584.8 +12.7% new borrowings to partly finance acquisition Borrowings1 (HK$m) 2,773.8 1,778.5 +56.0% Total liabilities (HK$m) 3,266.2 2,
Slide 12: Operations Review
PROSPERITY REITH SER Bat Operations Review 12
Slide 13: Property Income
Property Income Revenue Net Property Income 1H14 Trendy Centre 1H14 Prosperity Trendy Centre Prosperity HK$20.9m Place HK$14.4m Place HK$27.3m Prosperity Center HK$20.9m Prosperity Center HK$16.6m HK$12.8m 10.6% 9.3% 13.4% New Treasure 13.8% 8.4% New Treasure Harbourfront 8.3% Harbourfront Centre Ce
Slide 14: Occupancy Rates
Occupancy Rates Portfolio Occupancy Rates Above 95% Since 2006 Property As at 30 Jun 2014 The Metropolis Tower 99.5% Prosperity Millennia Plaza 95.3% 9 Chong Yip Street 95.8% Harbourfront Landmark (portion) 100.0% Prosperity Place 96.0% Trendy Centre 98.5% Prosperity Center (portion) 99.3% New Treas
Slide 15: AEIs Update
AEIs Update Prosperity Place Post Wholesale Conversion Chiller System Replacement New retail/service trade tenants Replaced with a more energy- accounted for over 20% of gross efficient chiller system, enabling up rentable area as at 30 Jun 2014. to ~15% in energy cost savings for air conditioning s
Slide 16: AEIs Update
AEIs Update Renovating the ground floor lobby and façade to fully unlock 9 Chong Yip Street its potential and reflect its strategic location in Kowloon East Before – Ground Floor Lobby Before – Façade After After Prosperity REIT 2014 Interim Results Presentation 16
Slide 17: AEIs Update
AEIs Update Renovating common corridors and passenger lift lobbies to 9 Chong Yip Street increase the competitiveness of the building Before – Lift Lobby Before – Common Corridor After After Prosperity REIT 2014 Interim Results Presentation 17
Slide 18: AEIs Update
AEIs Update Renovating common washrooms to improve the working 9 Chong Yip Street environment for the tenants Before – Female Washroom Before – Disabled Washroom After After Prosperity REIT 2014 Interim Results Presentation 18
Slide 19: Strategies
PERITY h BS EF T Yeh Os R R REI i=) 19
Slide 20: Strategies
Strategies Remain as defensive investment 100% payout ratio Stable and sustainable distributions Defensive investment as proven in economic cycles DPU (HK$) 0.0815 0.0744 0.0751 0.0660 0.0694 0.0555 0.0595 0.0607 0.0554 0.0544 0.0546 1H09 2H09 1H10 2H10 1H11 2H11 1H12 2H12 1H13 2H13 1H14 6.7%* yield
Slide 21: Strategies
Strategies Focus in decentralized locations Ongoing developments in Kowloon East, to be the “CBD2” of Hong Kong 32.8% of portfolio net property income came from Kowloon East AEIs and property management service Continuously improving property quality and management service to keep up with competitio
Slide 22: Appendix
PROSPERITY REITH SER Bat Appendix 22
Slide 23: Portfolio Map
Portfolio Map The Metropolis 1 Prosperity 5 Total Gross Rentable Area: 1.35m sq.ft. Tower Place GRA: 271,418 sq. ft. GRA: 240,000 sq. ft. Prosperity Trendy 6 Millennia Plaza 2 Centre 6 8 GRA: 217,955 sq. ft. GRA: 173,764 sq. ft. 9 Chong Yip Prosperity Street 3 Center Property 7 GRA: 136,595 sq. ft.
Slide 24: Portfolio
Portfolio The Metropolis Tower Prosperity Millennia Plaza 9 Chong Yip Street Harbourfront Landmark Prosperity Place Trendy Centre Prosperity Center New Treasure Centre Prosperity REIT 2014 Interim Results Presentation 24
Slide 25: Key Facts
Key Facts Key Facts as at 30 June 2014 IPO Date 16 Dec 2005 IPO Price HK$2.16 6.7% Indicative Yield (based on 1H14 DPU of HK$0.0815 and closing unit price of HK$2.42 as at 30 June 2014) Number of Issued Units 1,410,408,635 Market Capitalization HK$3.4 billion (US$437.6 million) Average Daily Trading
Slide 26: 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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