Prosperity Real Estate Investment Trust · HKEX:808
Prosperity Real Estate Investment Trust — H1 2017 Earnings Presentation
24 slides from Prosperity Real Estate Investment Trust's earnings presentation, August 2017
Slide 1: Interim Results
Interim Results For the six months ended 30 June 2017 August 2017
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 ProsperityREIT Prosperity REIT2016 2017Interim InterimResults ResultsPresentation Presentation 3
Slide 4: Results Highlights
Results Highlights Prosperity REIT 2016 Interim Results Presentation 4
Slide 5: 1. Unlock Asset Value
1. Unlock Asset Value Disposal of Harbourfront Landmark (“HFL”) completed on 3 March 2017 ● Net proceeds from disposal: HK$871.4 million; ● Disposal gain: HK$299.7 million. Enable us to recycle capital and enhance value for unitholders ● Seek for expansion opportunities. ProsperityREIT Prosperity RE
Slide 6: 2. Financials
2. Financials Revenue Net Property Distributable Distribution Income Income Per Unit 0.2% 0.6% 2.1% 1.0% HK$177.0m HK$222.9m HK$176.0m HK$134.1m HK$0.0906 HK$0.0915 HK$222.5m HK$131.4m 1H16 1H17 1H16 1H17 1H16 1H17 1H16 1H17 Rental Occupancy Cost-to- Average Reversion Rate revenue Effective Rate Rat
Slide 7: 3. Unit Price
3. Unit Price Unit price growth: 8.5%1 HK$3.32 HK$3.06 30-Dec-16 30-Jun-17 Attractive yield: 5.5%2 5.5%2 3.4%3 3.4%3 1.4%3 0.3%3 0.3%3 Prosperity REIT's HS Index Dividend HS Property Index HK 10-year Gov’t HK Composite RMB Savings Deposit Dividend Yield Yield Dividend Yield Bond Yield Interest Rate
Slide 8: 4. Returns
4. Returns Stable and sustainable distribution to continue ● 100% payout ratio ● Defensive investment as proven in economic cycles ● 204.9%* total return since IPO DPU (HK$) 0.0906 0.0915 0.0871 0.0897 0.0871 0.0815 0.0815 0.0744 0.0751 0.0694 0.0660 0.0595 0.0607 0.0554 0.0544 0.0555 0.0546 1H09 2H
Slide 9: Financial Review
Financial Review Prosperity REIT 2016 Interim Results Presentation 9
Slide 10: 1. Income Statement
Income 1. IncomeStatement Statement (HK$’000) 1H17 1H16 (unaudited) (unaudited) Revenue 222,509 222,925 Total property operating expenses (45,468) (46,972) Net property income 177,041 175,953 NPI increased by 0.6% Interest Income 2,654 23 Manager’s fee (25,661) (26,328) Trust and other expenses (4,5
Slide 11: 2. Financial Position
2. Financial Position As at 30 Jun As at 31 Dec Change 2017 2016 Out of HK$10,335m investment properties4, Total assets (HK$m) 11,298.9 10,928.8 +3.39% HK$5,713m was pledged Borrowings1 (HK$m) 2,838.8 2,853.3 -0.51% Interest Rate 5 Other liabilities (HK$m) 542.7 559.8 -3.05% Fixed : Floating 74% : 2
Slide 12: 3. Debt Maturity Profile
3. Debt Maturity Profile No major refinancing needs until 2019 3,000 2,500 430 2,000 HK$ million 1,500 1,000 2,070 500 800 0 Nov 2019 Aug 2021 Secured RCF @ HIBOR+135 bps Unsecured 5-yr term loan @ HIBOR+105 bps Secured 5-yr term loan @ HIBOR+135 bps ProsperityREIT Prosperity REIT2016 2017Interim In
Slide 13: 4. Portfolio Valuation
4. Portfolio Valuation Valuation by Property Type As at 30 Jun 2017 Commercial HK$1,707m ● Portfolio valuation at HK$10,335m, up Grade A Office 16.5% 1.5% compared to 31 Dec 2016 HK$6,387m ● Cap rates remain unchanged 61.8% 18.6% Industrial/Office HK$1,917m 3.1% Industrial HK$324m (HK$m) 30 Jun 2017
Slide 14: Operations Review
Operations Review Prosperity REIT 2016 Interim Results Presentation 14
Slide 15: 1. Property Income
1. Property Income Revenue Net Property Income Trendy Centre Trendy Centre HK$24.3m HK$17.8m Prosperity Prosperity Center Prosperity Prosperity Center Place HK$19.6m Place HK$15.2m HK$34.1m 11.0% HK$25.5m 10.1% 8.8% New Treasure 15.3% Centre 14.4% 8.5% New Treasure HK$7.7m Harbourfront Centre Harbou
Slide 16: 2. Occupancy Rates
2. Occupancy Rates Portfolio Occupancy Rates Above 95% Since 2006 (As at 30 Jun 2017) The Metropolis Tower 98.5% Prosperity Millennia Plaza 97.5% 9 Chong Yip Street 93.8% Prosperity Place 94.1% Trendy Centre 97.8% Prosperity Center (portion) 100.0% New Treasure Centre (portion) 92.4% Portfolio 96.7%
Slide 17: 3. Commercial Tenants at Prosperity Place
3. Commercial Tenants at Prosperity Place Diversified retail/services tenants, accounted for around 43% of gross rentable area of Prosperity Place as at 30 Jun 2017. Susweet Beauty Education Wall Street English Sports Dining Corner T-Club ProsperityREIT Prosperity REIT2016 2017Interim InterimResults
Slide 18: 4. Marketing Campaigns - Prosperity Place
4. Marketing Campaigns - Prosperity Place Chinese New Year Easter Promotion Summer Promotion Greetings ProsperityREIT Prosperity REIT2016 2017Interim InterimResults ResultsPresentation Presentation 18
Slide 19: Key Takeaways
Key Takeaways Prosperity REIT 2016 Interim Results Presentation 19
Slide 20: Key Takeaways
Key Takeaways 1. Asset disposal ● Revenue drop due to the revenue loss from the disposal of HFL Property on 3 March 2017; ● Disposal gain allows us to enhance value for unitholders and take advantage of growth opportunity. 2. Steady organic growth to continue ● Portfolio rental reversion rate at 8.1
Slide 21: Appendix
Appendix Prosperity REIT 2016 Interim Results Presentation 21
Slide 22: Portfolio Map
Portfolio Map The Metropolis 1 Trendy 5 Total Gross Rentable Area: 1.28m sq.ft. Tower Centre GRA: 271,418 sq. ft. GRA: 173,764 sq. ft. Prosperity Prosperity Millennia Plaza 2 Center Property 6 GRA: 217,955 sq. ft. GRA: 149,253 sq. ft. 9 Chong Yip New Treasure Street 3 Centre Property 7 GRA: 136,595
Slide 23: Key Facts
Key Facts Key Facts as at 30 Jun 2017 IPO Date 16 Dec 2005 IPO Price HK$2.16 5.5% Indicative Yield (based on 1H17 DPU of HK$0.0915 and closing unit price of HK$3.32 as at 30 Jun 2017) Number of Issued Units 1,461,840,453 Market Capitalization HK$4.85 billion (US$621.6 million)1 Average Daily Trading
Slide 24: Contacts
Contacts ARA Asset Management (Prosperity) Limited (as manager of Prosperity REIT) Ms. Mavis Wong Chief Executive Officer maviswong@ara.com.hk Mr. Vicho Chung Manager, Investments & Investor Relations vichochung@ara.com.hk Mr. Alex Lao Senior Analyst alexlao@ara.com.hk Units 5508-10, 55/F, The Cente
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