Prosperity Real Estate Investment Trust · HKEX:808
Prosperity Real Estate Investment Trust — FY2021 Earnings Presentation
27 slides from Prosperity Real Estate Investment Trust's earnings presentation, March 2022
Slide 1: Final Results for the year ended 31 December 2021
Final Results For the year ended 31 December 2021 March 2022
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 2021 Annual Results Presentation 3
Slide 4: Results Highlights
Results Highlights The Metropolis Tower Prosperity REIT 2021 Annual Results Presentation 4
Slide 5: Financials
1. Financials Revenue Net Property Distributable Distribution Income Income Per Unit 1.7% 1.6% 1.9% 1.6% HK$452.9m HK$272.9m HK$445.0m HK$358.0m HK$267.6m HK$0.1791 HK$352.1m HK$0.1763 FY20 FY21 FY20 FY21 FY20 FY21 FY20 FY21 Rental Occupancy Cost-to- Average Reversion Rate revenue Effective (as at 3
Slide 6: Unit Buyback (24 May – 31 Dec)
2. Unit Buyback (24 May – 31 Dec) 1. Buyback Execution1 No. of Units bought back: 39.14 million (2.6% of total issued units) Total Buyback Amount (excluding expenses): HK$118.67 million % of Avg. Daily Volume: 17.8% (for buyback-traded days only) 2. Price Performance2 12.41% 0.46% -1.72% -2.61% -6.8
Slide 7: Unit Price and Yield
3. Unit Price and Yield Prosperity REIT’s unit price increment tops among HK REITs in FY21. Langham Prosperity Sunlight Fortune Champion Hospitality Hui Xian REIT REIT REIT CMC REIT Regal REIT Link REIT Spring REIT REIT Yuexiu REIT Trust REIT SF REIT1 40.0% 27.3% 20.0% 15.1% 8.4% 6.5% 4.4% 0.0% -2.8
Slide 8: Returns
4. Returns Stable and sustainable distribution to continue ● 100% payout ratio ● Highly resilient investment scheme as proven in different economic cycles ● 262.6%* total return since IPO year DPU (HK$) 0.0915 0.092 0.0933 0.0901 0.0906 0.0899 0.0871 0.0897 0.0871 0.0865 0.089 0.0895 0.0892 0.0862 0
Slide 9: Financial Review
Financial Review Prosperity Millennia Plaza Prosperity REIT 2021 Annual Results Presentation 9
Slide 10: Income Statement
Income 1. IncomeStatement Statement FY21 FY20 (HK$’000) Revenue Revenue 444,981 452,894 decreased by 1.7% Total property operating expenses (92,895) (94,856) Net property income 352,086 358,038 NPI decreased by 1.6% Interest Income 580 4,572 Manager’s fee (50,580) (53,267) Trust and other expenses (
Slide 11: Financial Position
2. Financial Position As at As at Change • All bank loan facilities 31 Dec 2021 31 Dec 2020 are unsecured Total assets (HK$’m) 10,185.6 10,511.8 -3.1% • None of the investment properties were pledged Borrowings1 (HK$’m) 2,323.2 2,327.9 -0.2% Interest Rate4 Other liabilities (HK$’m) 599.8 641.4 -6.5%
Slide 12: Green Finance
3. Green Finance Refinanced term loan facility of HK$800m through sustainability-linked term loan in August: • 5-year tenor • Interest margin: HIBOR + 1.05% p.a. • Reduction of interest margin for the extent of “Sustainability KPIs” achieved Some of the Sustainability KPIs 2021 KPIs Fully A. Green b
Slide 13: Debt Maturity Profile
4. Debt Maturity Profile Term Loan Facility Refinancing Needs • Existing 5-year HK$1,540m unsecured term loan and HK$430m RCF expiring in Nov 2022 under discussion with banks. 2,500 2,000 430 HK$ million 1,500 1,000 66% of total loan 1,540 facilities (excl. RCF) 500 800 0 Nov 2022 Maturity Date Aug
Slide 14: Portfolio Valuation
5. Portfolio Valuation Valuation by Property Type Industrial As at 31 Dec 2021 HK$333m Industrial/Office 3.3% HK$1,852m ● Portfolio valuation at HK$9,967m, 18.6% down 1.8% compared to 31 Dec 2020 ● Capitalization rates from 3.7% to 4.3% Grade A Office HK$6,132m 61.5% 16.6% Commercial HK$1,650m (HK$’
Slide 15: Operations Review
Operations Review 9 Chong Yip Street Prosperity REIT 2021 Annual Results Presentation 15
Slide 16: Property Income
1. Property Income Revenue Net Property Income (NPI) New Treasure Centre New Treasure Centre HK$17.2m HK$12.7m Prosperity Center Prosperity Center HK$38.4m HK$28.6m The Metropolis Tower 3.9% The Metropolis Tower 3.6% HK$129.0m 8.6% HK$103.3m 8.1% Trendy Centre 29.0% Trendy Centre 29.4% HK$40.9m HK$5
Slide 17: Occupancy Rates
2. Occupancy Rates Portfolio Occupancy Rates Above 95% Since 2006 (As at 31 Dec 2021) The Metropolis Tower 98.2% Prosperity Millennia Plaza 95.5% 9 Chong Yip Street 98.6% Prosperity Place 98.1% Trendy Centre 98.8% Prosperity Center (portion) 97.9% New Treasure Centre (portion) 97.2% Portfolio 97.7%
Slide 18: Lease Expiry Profile
3. Lease Expiry Profile Portfolio Lease Expiry Profile as at 31 Dec 2021 42.5% 40.6% 37.0% 34.9% 19.2% 19.2% 3.2% 3.4% 31-Dec-21 2022 2023 2024 and beyond By Gross Rental Area (GRA) By Gross Rental Income (GRI) Expiry Profile as at 31 Dec 2021 By Gross Rental Area By Gross Rental Income Period % of
Slide 19: Capitalizing on Decentralization Trends
4. Capitalizing on Decentralization Trends • Portfolio FY21 weighted average occupancy rate at 96.5% (FY20: 96.2%) despite intense decentralized office market vacancy rate of 11.8% in December 20211 and overall office market negative take-up rates for 3 consecutive quarters in FY212. • Electronic /
Slide 20: Key Takeaways
Key Takeaways Prosperity Place Prosperity REIT 2021 Annual Results Presentation 20
Slide 21: Key Takeaways
Key Takeaways 1. Net Property Income (NPI) decreased by 1.6% Y-o-Y ● Mainly due to drop in topline revenue, caused by negative rental reversion; ● Cost-to-revenue ratio maintained stable at 20.9% with operating cost well controlled. 2. Distribution per unit (DPU) decreased by 1.6% Y-o-Y ● Distributi
Slide 22: ESG Achievements
ESG Achievements Three-star rating in GRESB assessment as well as a Green Star 100% portfolio’s GFA recognized with green building certifications: • “Excellent” in BEAM Plus Existing Buildings Version 2.0 (Management / Energy Use) 10 Year Plus Caring Company Logo awarded by Hong Kong Council of Soci
Slide 23: Appendix
Appendix Prosperity REIT 2021 Annual Results Presentation 23
Slide 24: Key Milestones since IPO
Key Milestones since IPO Acquired 9 Chong Yip Street for Secured first sustainability- Inclusion in FTSE EPRA approx. HK$1 billion, expanding linked term loan of HK$800 Nareit Global Real Listed on Hong Kong Stock our portfolio size by 11.2% million with DBS Estate Developed Index Exchange with 7 pr
Slide 25: Portfolio Map
Portfolio Map The Metropolis Trendy Tower 1 Centre 5 Total Gross Rentable Area: 1.28m sq.ft. 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 26: Key Facts
Key Facts Key Facts as at 31 Dec 2021 IPO Date 16 Dec 2005 Unitholder Structure IPO Price HK$2.16 5.72% Public CKAH2 Indicative Yield (based on FY21 DPU of HK$0.1763 and closing unit price of HK$3.08 as at 31 Dec 2021) 81.7% 18.3% Number of Issued Units 1,503,747,330 Market Capitalization HK$4.63 bi
Slide 27: Contacts
Contacts ARA Asset Management (Prosperity) Limited (as manager of Prosperity REIT) Ms. Mavis Wong Chief Executive Officer MavisWong@ara-group.com Mr. Vicho Chung Manager, Investments & Investor Relations VichoChung@ara-group.com Mr. Kenny Kwong Senior Analyst KennyKwong@ara-group.com Unit 901, Level
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