Champion Real Estate Investment Trust · HKEX:2778
Champion Real Estate Investment Trust — FY2022 Earnings Presentation
26 slides from Champion Real Estate Investment Trust's earnings presentation, 2023
Slide 1: Annual Results
ChampionREIT wed HE HE aE Annual Results
Slide 2: Agenda
Agenda 1 Results Summary 2 Properties Performance Review 3 Sustainability 4 Outlook 2
Slide 3: Results Summary
ChampionREIT wel A a SE fia Results Summary
Slide 4: Operating Environment Continued to be Impacted by COVID-19
FY22 Results Summary Operating Environment Continued to be Impacted by COVID-19 Total Rental Net Property Distributable Distribution Income Income Income per unit HK$mm HK$mm HK$mm HK$ 2,359 2,031 1,298 0.1956 ↓ 5.5% Y/Y ↓ 7.6% Y/Y ↓ 13.6% Y/Y ↓ 14.0% Y/Y Performance highlights Local market sentimen
Slide 5: Negative Rental Reversion Trend Remained
Rental Income Breakdown Negative Rental Reversion Trend Remained Rental Income by Property (HK$mm) Rental Income by Income Type (HK$mm) 2,495 2,359 3% 3% 2% 670 5% 650 Three Garden Road Base Rent 365 363 Langham Place Office Turnover Rent Langham Place Mall Carpark and Others 95% 92% 1,460 1,346 202
Slide 6: Lower Rental Driving Lower Valuation; Unchanged Cap Rates
Property Valuation Lower Rental Driving Lower Valuation; Unchanged Cap Rates Property Valuation: HK63.6bn HK$ bn Office: 37.4 Three Garden Road: HK$/sqft HK$38.9bn 23,646 Grade A office complex Cap Rate 61% 39% with GFA 1.6 million sq. ft. 3.7% Office Retail HK$ bn 8.8 15.3 Langham Place: HK$24.6bn
Slide 7: Stable Financial Position
Debt Profile Stable Financial Position Debt Maturity Profile (HK$mm) Debt by Fixed / Floating Rates as at 31 Dec 2022 After redemption of MTN due in January 2023 200 Bank loan MTN Fixed 45.6% Floating 54.4% 5,164 2,998 2,345 1,225 Gearing ratio: 22.5% (2021: 22.9%) 1,150 700 100 Average interest
Slide 8: Three Garden Road
Three Garden Road A Green and Wellness Hub in Central
Slide 9: Downsizing and Relocation Impacting Occupancy
Three Garden Road Office Downsizing and Relocation Impacting Occupancy Occupancy Tenant Profile as at 31 Dec 2022 as at 31 Dec 2022 Banking Flexible Workspace 30% 29% Asset Management Medical 89.0% 82.7% Corporate Consultancy Legal Others 3% 17% 5% Media Vacant 6% 1% 2% 2% 5% Dec-2021 Dec-2022 9
Slide 10: Market Rent Under Pressure
Three Garden Road Office Market Rent Under Pressure Passing Rent per sq. ft. (HK$) Lease Expiry as at 31 Dec 2022 as at 31 Dec 2022 Lease Expiring Rent Review Vacant 28.1% 108.3 99.7 22.7% 17.3% 15.0% 11.9% 5.0% Vacant 2023 2024 2025 2026 and after Dec-2021 Dec-2022 WAULT at 1.8 years 10
Slide 11: Langham Place Office Tower
Langham Place Office Tower A Lifestyle Hub in Mong Kok
Slide 12: Improving Demand from Beauty and Medical Segments
Langham Place Office Tower Improving Demand from Beauty and Medical Segments Occupancy Tenant Profile as at 31 Dec 2022 as at 31 Dec 2022 Healthcare & Corporate & 18% Medical Sales Services 30% Beauty Others 7% Fitness Centre Vacant 96.3% 93.3% 2% 2% Flexible Workspace 10% 31% Lifestyle 71% Dec-2021
Slide 13: Income Maintaining at Stable Level
Langham Place Office Income Maintaining at Stable Level Passing Rent per sq. ft. (HK$) Lease Expiry as at 31 Dec 2022 as at 31 Dec 2022 Lease Expiring Vacant 47.1 41.5% 46.0 28.7% 12.8% 10.3% 6.7% Vacant 2023 2024 2025 2026 and after Dec-2021 Dec-2022 WAULT at 1.6 years 13
Slide 14: Langham Place Mall
Langham Place Mall Retail trendsetter in town
Slide 15: Sales of Tenants Outperforming Market
Langham Place Mall Sales of Tenants Outperforming Market Retail Sales Y/Y Growth (%) Daily Mainland Visitor Arrivals Jan – Dec 2022 80,000 69,992 70,000 60,000 Langham Place Mall 50,000 Hong Kong Retail 40,000 8% 30,000 20,000 Jan average: 9,027 10,000 0 6-Feb 13-Feb 20-Feb 2-Jan 9-Jan 16-Jan 23-Jan
Slide 16: Beauty Segment Contributing to Turnover Rent Growth
Langham Place Mall Beauty Segment Contributing to Turnover Rent Growth Passing Rent per sq. ft. (HK$) Breakdown of Base Rent and Turnover Rent (HK$mm) as at 31 Dec 2022 38 6% 117 20% Base Rent Turnover Rent 165.9 157.1 575 94% 481 80% Dec-2021 Dec-2022 2021 2022 16
Slide 17: Expiry Profile Offering Upside Potential and Flexibility
Langham Place Mall Expiry Profile Offering Upside Potential and Flexibility Percentage of Turnover Rent Only Lease Expiry as at 31 Dec 2022 as at 31 Dec 2022 Lease Expiring Rent Review 12% 39.0% 32.9% 9% 23.5% 1.2% 3.4% 2023 2024 2025 2026 and after 2021 2022 WAULT at 1.4 years 17
Slide 18: Introducing First in Hong Kong Tenants
Langham Place Mall Introducing First in Hong Kong Tenants Tenant Profile as at 31 Dec 2022 14% Fashion & Accessories 30% First glamping-themed restaurant in HK, CAMPSITE, Food & Beverage bringing outdoor fun to indoor dining 16% Entertainment Others Health & Beauty 17% 23% Good Moment bringing “
Slide 19: Promotion Activities Driving Sales and Footfall
Langham Place Mall Promotion Activities Driving Sales and Footfall Disney & Pixar Fluffy Chinese New Year Sales Driven Christmas Festival Stay “Cat”ion Promotion 6-metre tall “fluffy ball” First official pop-up store in HK Lucky draw, sales rebate and Christmas tree made with for popular Japan
Slide 20: Sustainability
ChampionREIT wel A a SE fia Sustainability
Slide 21: Green Achievements
Sustainability Green Achievements Three Garden Road achieved highest 2045 Net Zero Commitment BEAM Plus Platinum Rating Highest score in Hong Kong Reinforced decarbonisation targets Full marks in five categories including Built up our resilience for climate risks and “innovations” and “energy use” o
Slide 22: Strengthening collaborations with stakeholders
Sustainability Strengthening collaborations with stakeholders Love · Play · Farm Musica del Cuore at Langham Place Mall Classical music concerts Launched pioneering “waste- Exclusive piano recital by Japanese pianist to-farm-to-table” mint lemonade Miyako Arishima to promote cross-cultural Multi-par
Slide 23: Awards and Recognitions
Sustainability Awards and Recognitions Distinction Award Special Awards in Social, Pandemic 2021 Green Star Recognition Resilience and Innovation Grade A on Public Disclosure ESG Leading Enterprise Award Theme Award: Crisis Management Outstanding ESG Improvement Commendation 2022 Constituent for sev
Slide 24: Outlook
ChampionREIT wel A a SE fia Outlook
Slide 25: 2023 Remains a Challenging Year
Outlook 2023 Remains a Challenging Year Portfolio Outlook Merge and Acquisition Office outlook remains -ve Opportunistic and Retail supported by tourist conservative approach arrivals Down trend on DPU Liabilities Management Interest rate volatility affecting interest expense 25
Slide 26: Important Notice
Important Notice This presentation may contain information which is proprietary, confidential and/or legally privileged and has been prepared by Eagle Asset Management (CP) Limited, in its capacity as the manager (the “REIT Manager”) of Champion Real Estate Investment Trust (the “Trust”). This prese
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