Prosperity Real Estate Investment Trust · HKEX:808
Prosperity Real Estate Investment Trust — H1 2023 Earnings Presentation
25 slides from Prosperity Real Estate Investment Trust's earnings presentation, August 2023
Slide 1: Interim Results
Interim Results For the half year ended 30 June 2023 August 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 2023 Interim Results Presentation 3
Slide 4: Results Highlights
Results Highlights The Metropolis Tower Prosperity REIT 2023 Interim Results Presentation 4
Slide 5: Financials
1. Financials Revenue Net Property Distributable Distribution Income Income Per Unit 0.5% 2.6% 13.4% 14.9% HK$218.6m HK$217.4m HK$172.2m HK$131.4m HK$0.0875 HK$167.8m HK$113.8m HK$0.0745 1H22 1H23 1H22 1H23 1H22 1H23 1H22 1H23 Tenant Occupancy Cost-to- Average Retention Rate revenue Effective (as at
Slide 6: Returns
2. Returns ● 100% payout ratio and 160.7%1 total return since IPO. ● Unit buyback continues to be our strategy to support DPU. Attractive yield2,3 8.5% 5.2% 3.5% 3.7% 2.4% Prosperity REIT's HS Property Index HSI Dividend Yield HK 10-year Gov't HK Composite Dividend Yield Dividend Yield Bond Yield In
Slide 7: Financial Review
Financial Review Prosperity Millennia Plaza Prosperity REIT 2023 Interim Results Presentation 7
Slide 8: Income Statement
1. Income Statement 1H23 1H22 Revenue decreased by 0.5% mainly (HK$’000) due to the frictional tenancy (Unaudited) (Unaudited) movements in certain properties, Revenue 217,395 218,568 though the negative impact was partly offset by the increase in rental Total property operating expenses (49,578) (4
Slide 9: Financial Position
2. Financial Position As at As at Change 30 Jun 2023 31 Dec 2022 All bank loan facilities are Total assets (HK$’m) 9,870.8 9,982.5 -1.1% unsecured with no investment properties pledged. Borrowings1 (HK$’m) 2,311.2 2,306.8 0.2% Interest Cost4 Other liabilities (HK$’m) 589.4 577.2 2.1% Fixed : Floatin
Slide 10: Capital Management
3. Capital Management • 100% of our loan facilities are sustainability-linked. • Debt maturity profile evenly spread. • No refinancing needs till 2025 and no interest rate swap expiry till 2024. Debt Maturity Profile (HK$ million) Interest Coverage Ratio1 262 4.4x 168 938 800 Weighted 602 Average De
Slide 11: Portfolio Valuation
4. Portfolio Valuation Valuation by Property Type Industrial As at 30 Jun 2023 HK$345m 3.5% Industrial/Office ● Portfolio valuation at HK$9,703m, HK$1,900m down 1.0% compared to 31 Dec 2022. 19.6% ● Capitalization rates unchanged from 3.7% to 4.3%. Grade A Office HK$5,808m 59.9% 17.0% Commercial HK$
Slide 12: Operations Review
Operations Review 9 Chong Yip Street Prosperity REIT 2023 Interim Results Presentation 12
Slide 13: Property Income
1. Property Income Revenue Net Property Income (NPI) New Treasure Centre New Treasure Centre HK$8.9m HK$6.6m Prosperity Center Prosperity Center HK$19.4m HK$14.9m The Metropolis Tower 4.1% 4.0% HK$61.6m 8.9% The Metropolis Tower 8.9% HK$47.8m 28.4% 28.5% Trendy Centre Trendy Centre HK$27.3m HK$20.7m
Slide 14: Occupancy Rates
2. Occupancy Rates Portfolio Occupancy Rate Above 95% Since 2006 (As at 30 Jun 2023) The Metropolis Tower 98.2% Prosperity Millennia Plaza 96.0% 9 Chong Yip Street 96.5% Prosperity Place 93.8% Trendy Centre 97.1% Prosperity Center (portion) 100.0% New Treasure Centre (portion) 100.0% Portfolio 97.0%
Slide 15: Capitalizing on Decentralization Trends
3. Capitalizing on Decentralization Trends Benefitting from the office decentralization trend, PREIT saw 25% GRA of new letting1 in 1H23 relocated from prime districts largely due to cost savings and changes in business operation mode. 15% 30% Prime District 8% Central Causeway Bay New Letting From
Slide 16: Trade Mix of New Letting
4. Trade Mix of New Letting IT / Technology and retail services1 trades accounted for 53% of new letting GRA in 1H23. Others 9% Consultancy / Research 6% IT / Technology 29% Finance / Investment 14% New Letting By Trade Manufacturing / Trading 18% Retail Services 24% Note: 1. Retail services trades
Slide 17: AEIs @ The Metropolis Tower & Prosperity Millennia Plaza
5. AEIs @ The Metropolis Tower & Prosperity Millennia Plaza The AEIs include the renovation of main lobbies and typical floors, the replacement of chiller plants, the installation of smart building management systems and solar panels, and the launching of a tenant app to demonstrate our continuous E
Slide 18: Key Takeaways
Key Takeaways Prosperity Place Prosperity REIT 2023 Interim Results Presentation 18
Slide 19: Key Takeaways
Key Takeaways 1. Distribution per unit (DPU) decreased by 14.9% Y-o-Y ● Decrease mainly driven by the sharp rise in interest expense Y-o-Y due to rate hikes. ● Annualized distribution yield of 8.5%1. ● Maintained 100% payout ratio since listing. 2. Revenue decreased by 0.5% Y-o-Y ● Mainly due to the
Slide 20: ESG Achievements
ESG Achievements MSCI ESG Rating “B” Rated as “Low Risk” in Global Real Estate Sustainability Sustainalytics ESG Risk Rating Benchmark (GRESB) 2022 Achievements ✓ Highest Five-Star Rating ✓ Green Star ✓ Highest “A” Ranking in Public Disclosure BEAM Plus Certificates by Hong 100% of Prosperity REIT’s
Slide 21: Appendix
Appendix Prosperity REIT 2023 Interim Results Presentation 21
Slide 22: Key Milestones since IPO
Key Milestones since IPO 100% of financing sustainability- Inclusion in FTSE linked Sustainalytics Listed on Hong Kong Acquired 9 Chong Yip Street for Secured first sustainability- EPRA Nareit Global ❖ Secured HK$1,970 million ESG Risk Rating Stock Exchange with 7 approx. HK$1 billion, expanding lin
Slide 23: Portfolio Map
Portfolio Map The Metropolis Trendy Centre (TC) Tower (MT) 1 5 Total Gross Rentable Area: 1.28m sq. ft. GRA: 271,418 sq. ft. GRA: 173,764 sq. ft. Prosperity Millennia Prosperity Center Plaza (PMP) 2 Property (PC) 6 GRA: 217,955 sq. ft. GRA: 149,253 sq. ft. CBD2 9 Chong Yip Street New Treasure Centre
Slide 24: Key Facts
Key Facts Key Facts as at 30 Jun 2023 IPO Date 16 Dec 2005 Unitholder Structure IPO Price HK$2.16 8.5% Public CKAH2 Indicative Yield (based on 1H23 annualized DPU of HK$0.0745 and closing unit price of HK$1.76 as at 30 Jun 2023) 81.9% 18.1% Number of Issued Units 1,520,055,214 Market Capitalization
Slide 25: 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
Prosperity Real Estate Investment Trust — H1 2023 Earnings Presentation on 6ix