Prosperity Real Estate Investment Trust · HKEX:808
Prosperity Real Estate Investment Trust — FY2020 Earnings Presentation
24 slides from Prosperity Real Estate Investment Trust's earnings presentation, March 2021
Slide 1: Final Results for the year ended 31 December 2020
Final Results For the year ended 31 December 2020 March 2021
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
Slide 4: Results Highlights
Results Highlights The Metropolis Tower
Slide 5: Financials
1. Financials Revenue Net Property Distributable Distribution Income Income Per Unit 2.0% 2.2% 0.7% 2.0% HK$462.3m HK$365.9m HK$274.7m HK$0.1828 HK$452.9m HK$272.9m HK$0.1791 HK$358.0m FY19 FY20 FY19 FY20 FY19 FY20 FY19 FY20 Rental Occupancy Cost-to- Average Reversion Rate revenue Effective (as at 3
Slide 6: Unit Price and Yield
2. Unit Price and Yield Unit price change in FY20: -20.7% New China Langham Century Champion The Link Fortune Prosperity Sunlight Merchants Yue Xiu Hui Xian Hospitality REIT REIT REIT Spring REIT REIT REIT REIT Commercial REIT Regal REIT REIT Trust 0.0% -20.0% -11.9% -12.0% -14.4% -16.1% -18.7% -20.
Slide 7: Returns
3. Returns Stable and sustainable distribution to continue ● 100% payout ratio ● Highly defensive investment as proven in economic cycles ● 167.3%* total return since IPO DPU (HK$) 0.0906 0.0915 0.0920 0.0933 0.0899 0.0871 0.0897 0.0871 0.0865 0.0890 0.0895 0.0892 0.0815 0.0815 0.0744 0.0751 0.0660
Slide 8: Financial Review
Financial Review Prosperity Millennia Plaza
Slide 9: Income Statement
Income 1. IncomeStatement Statement FY20 FY19 (HK$’000) Revenue Revenue 452,894 462,314 decreased by 2.0% Total property operating expenses (94,856) (96,448) Net property income 358,038 365,866 NPI decreased by 2.2% Interest Income 4,572 5,773 Manager’s fee (53,267) (55,314) Trust and other expenses
Slide 10: Financial Position
2. Financial Position As at As at Change • All bank loan facilities 31 Dec 2020 31 Dec 2019 are unsecured. Total assets (HK$m) 10,511.8 11,552.2 -9.0% • None of the investment properties were pledged. Borrowings1 (HK$m) 2,327.9 2,319.9 0.3% Interest Rate4 Other liabilities (HK$m) 641.4 595.5 7.7% Fi
Slide 11: Debt Maturity Profile
3. Debt Maturity Profile Re-financing of Term Loan Facility • Existing 5-year HK$800M unsecured term loan expiring on 31 Aug 2021 • Accounts for 34% of total loan facilities of HK$2.34B (excl. RCF) 2,000 430 1,500 HK$ million 1,000 1,540 500 800 0 Aug 2021 Nov 2022 Maturity Date Unsecured 5-yr term
Slide 12: Portfolio Valuation
4. Portfolio Valuation Valuation by Property Type Industrial As at 31 Dec 2020 HK$328m Industrial/Office 3.2% HK$1,884m ● Portfolio valuation at HK$10,147m, 18.6% down 8.8% compared to 31 Dec 2019 Grade A Office HK$6,251m 61.6% 16.6% Commercial HK$1,684m (HK$’m) 31 Dec 2020 31 Dec 2019 Change The Me
Slide 13: Operations Review
Operations Review 9 Chong Yip Street
Slide 14: Property Income
1. Property Income Revenue Net Property Income (NPI) New Treasure Centre New Treasure Centre HK$17.0m HK$12.1m Prosperity Center Prosperity Center HK$38.6m HK$28.1m The Metropolis Tower 3.8% The Metropolis Tower 3.4% HK$138.2m 8.5% HK$115.1m 7.9% Trendy Centre Trendy Centre 30.5% HK$39.4m 11.6% HK$5
Slide 15: Occupancy Rates
2. Occupancy Rates Portfolio Occupancy Rates Above 95% Since 2006 (As at 31 Dec 2020) The Metropolis Tower 96.6% Prosperity Millennia Plaza 94.7% 9 Chong Yip Street 98.9% Prosperity Place 98.4% Trendy Centre 94.4% Prosperity Center (portion) 90.2% New Treasure Centre (portion) 100.0% Portfolio 96.1%
Slide 16: Lease Expiry Profile
3. Lease Expiry Profile Portfolio Lease Expiry Profile as at 31 Dec 2020 42.1% 39.8% 36.1% 36.2% 19.8% 17.8% 4.3% 3.9% 31-Dec-20 2021 2022 2023 and beyond By Gross Rental Area (GRA) By Gross Rental Income (GRI) Expiry Profile as at 31 Dec 2020 By Gross Rental Area By Gross Rental Income Period % of
Slide 17: Key Takeaways
Key Takeaways Prosperity Place
Slide 18: Key Takeaways
Key Takeaways 1. Net Property Income (NPI) decreased by 2.2% Y-o-Y ● Mainly due to drop in topline revenue, caused by negative rental reversion and drop in occupancy rate ● Cost-to-revenue ratio maintained stable at 20.9% with operating cost well controlled 2. Distribution per unit (DPU) decreased b
Slide 19: ESG Efforts
ESG Efforts 1. “Excellent” in BEAM Plus Existing Buildings 2. Two-star rating in 1st year of GRESB assessment Version 2.0 (Energy Use) – Prosperity Millennia Plaza 3. Rated “A” in Hang Seng Corporate Sustainability Index Prosperity REIT 2020 Annual Results Presentation 19
Slide 20: Appendix
Appendix Prosperity REIT 2020 Annual Results Presentation 20
Slide 21: Key Milestones since IPO
Key Milestones since IPO Listed on Hong Kong Stock Acquired 9 Chong Yip Street Disposed of Harbourfront Exchange with 7 properties. for approx. HK$1 billion, Landmark Property for expanding our portfolio size approx. HK$0.88 billion, by 11.2%. 49.1% premium over valuation. 2005 2006 2007 2008~2011 2
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. First Phase 9 Chong Yip New Treasure 第一階段 Street 3 Centre Propert
Slide 23: Key Facts
Key Facts Key Facts as at 31 Dec 2020 IPO Date 16 Dec 2005 Unitholder Structure IPO Price HK$2.16 7.40% Public CKAH2 Indicative Yield (based on FY20 DPU of HK$0.1791 and closing unit price of HK$2.42 as at 31 Dec 20201) 81.9% 18.1% Number of Issued Units 1,524,068,034 Market Capitalization HK$3.69 b
Slide 24: 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. Justin To Senior Analyst JustinTo@ara-group.com Unit 901, Level 9,
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