Prosperity Real Estate Investment Trust · HKEX:808
Prosperity Real Estate Investment Trust — H1 2022 Earnings Presentation
27 slides from Prosperity Real Estate Investment Trust's earnings presentation, August 2022
Slide 1: Interim Results
Interim Results For the half year ended 30 June 2022 August 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 2022 Interim Results Presentation 3
Slide 4: Results Highlights
Results Highlights The Metropolis Tower Prosperity REIT 2022 Interim Results Presentation 4
Slide 5: 1. Financials
1. Financials Revenue Net Property Distributable Distribution Income Income Per Unit 2.6% 4.5% 4.9% 2.9% HK$224.4m HK$138.1m HK$0.0901 HK$0.0875 HK$218.6m HK$180.4m HK$131.4m HK$172.2m 1H21 1H22 1H21 1H22 1H21 1H22 1H21 1H22 Rental Occupancy Cost-to- Average Reversion Rate revenue Effective (as at 3
Slide 6: 2. Unit Buyback
2. Unit Buyback 1H 2022 Buyback Execution No. of units bought back: 14.89 million (1.0% of total issued units) Total Buyback Amount: HK$42.84 million % of Avg. Daily Volume: 27.9% (for buyback-traded days only) Positive Impact of Unit Buyback DPU NAV per unit +3.6% +1.5% 1H 2022 DPU: HK$0.0875 NAV p
Slide 7: 3. Unit Price and Yield
3. Unit Price and Yield Unit price change in 1H22 Langham Hospitality Champion Sunlight Fortune Prosperity Hui Xian Trust Spring REIT SF REIT CMC REIT Yuexiu REIT Link REIT Regal REIT REIT REIT REIT REIT REIT 20.0% 14.3% 2.7% 0.0% -0.9% -1.1% -5.3% -6.8% -20.0% -9.8% -12.5% -15.9% -18.9% -22.1% -27.
Slide 8: 4. Returns
4. Returns Stable and sustainable distribution to continue ● 100% payout ratio ● Highly resilient investment scheme as proven in different economic cycles ● 191.1%* total return since IPO year DPU (HK$) 0.0920 0.0933 0.0899 0.0906 0.0915 0.0901 0.0875 0.0871 0.0890 0.0895 0.0892 0.0871 0.0897 0.0865
Slide 9: Financial Review
Financial Review Prosperity Millennia Plaza Prosperity REIT 2022 Interim Results Presentation 9
Slide 10: 1. Income Statement
Income 1. IncomeStatement Statement 1H22 1H21 (HK$’000) (Unaudited) (Unaudited) Revenue decreased by 2.6% due to Revenue 218,568 224,389 negative rental Total property operating expenses (46,324) (43,962) reversions Net property income 172,244 180,427 NPI decreased by Other Income 511 510 4.5% Manag
Slide 11: 2. Financial Position
2. Financial Position As at As at Change 30 Jun 2022 31 Dec 2021 • All bank loan facilities (Unaudited) (Audited) are unsecured Total assets (HK$’m) 10,108.9 10,185.6 -0.8% • None of the investment properties were pledged Borrowings1 (HK$’m) 2,327.2 2,323.2 0.2% Interest Rate4 Other liabilities (HK$
Slide 12: 3. Green Finance
3. Green Finance ✓ Secured maiden sustainability-linked interest rate swap with DBS as our second green financing initiative ✓ Entitled to sponsorship from DBS upon completion of at least two community events ✓ Target interest rate hedging ratio at 55% as prudent risk management Prosperity REIT 2022
Slide 13: 4. 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: 5. Portfolio Valuation
5. Portfolio Valuation Valuation by Property Type Industrial As at 30 Jun 2022 HK$334m Industrial/Office 3.4% HK$1,856m ● Portfolio valuation at HK$9,894m, 18.7% down 0.7% compared to 31 Dec 2021 Grade A Office HK$6,054m 61.2% 16.7% Commercial HK$1,650m (HK$’m) 30 Jun 2022 31 Dec 2021 Change The Met
Slide 15: Operations Review
Operations Review 9 Chong Yip Street Prosperity REIT 2022 Interim Results Presentation 15
Slide 16: 1. Property Income
1. Property Income Revenue Net Property Income (NPI) New Treasure Centre New Treasure Centre HK$8.5m HK$6.3m Prosperity Center Prosperity Center HK$19.8m HK$15.5m The Metropolis Tower 3.9% The Metropolis Tower 3.7% HK$62.1m 9.1% HK$49.3m 9.0% Trendy Centre 28.4% Trendy Centre 28.6% HK$19.5m HK$25.9m
Slide 17: 2. Occupancy Rates
2. Occupancy Rates Portfolio Occupancy Rates Above 95% Since 2006 (As at 30 Jun 2022) The Metropolis Tower 91.5% Prosperity Millennia Plaza 95.0% 9 Chong Yip Street 97.6% Prosperity Place 98.8% Trendy Centre 94.8% Prosperity Center (portion) 99.2% New Treasure Centre (portion) 100.0% Portfolio 96.0%
Slide 18: 3. Lease Expiry Profile
3. Lease Expiry Profile Portfolio Lease Expiry Profile as at 30 Jun 2022 40.9% 40.3% 28.6% 29.0% 20.9% 21.0% 9.6% 9.7% 2H2022 2023 2024 2025 and beyond By Gross Rental Area (GRA) By Gross Rental Income (GRI) Expiry Profile as at 30 Jun 2022 By Gross Rental Area By Gross Rental Income Period % of Tot
Slide 19: 4. New Main Lobby at The Metropolis Tower
4. New Main Lobby at The Metropolis Tower Cross-harbour Extension of East Rail Line Commenced in May 2022 • 5 to 7 mins from Hung Hom → Exhibition Centre / Admiralty ✓ Strategic location (interchange station of Tuen Ma Line and East Rail Line) ✓ Contemporary design with green element ✓ Unlock larger
Slide 20: Key Takeaways
Key Takeaways Prosperity Place Prosperity REIT 2022 Interim Results Presentation 20
Slide 21: Key Takeaways
Key Takeaways 1. Net Property Income (NPI) decreased by 4.5% Y-o-Y ● Mainly due to drop in revenue caused by the negative rental reversion rates, as well as the COVID-19 related relief measures; ● Cost-to-revenue ratio maintained stable at 21.2%. 2. Distribution per unit (DPU) decreased by 2.9% Y-o-
Slide 22: ESG Achievements
ESG Achievements Indoor Air Quality Certificate BEAM Plus Certificates by by Environmental Protection Hong Kong Green Building Department Council Limited ❖ Excellent Class ❖ Excellent (Management) • Prosperity Place • Portfolio base ❖ Good Class ❖ Platinum (Management) • The Metropolis Tower • The M
Slide 23: Appendix
Appendix Prosperity REIT 2022 Interim Results Presentation 23
Slide 24: Key Milestones since IPO
Key Milestones since IPO Secured first Acquired 9 Chong Yip Street for Inclusion in FTSE EPRA sustainability-linked approx. HK$1 billion, expanding Nareit Global Real term loan of HK$800 Listed on Hong Kong Stock our portfolio size by 11.2% Estate Developed Index million with DBS Exchange with 7 pro
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 30 Jun 2022 IPO Date 16 Dec 2005 Unitholder Structure IPO Price HK$2.16 7.29% Public CKAH2 Indicative Yield (based on 1H 2022 annualized DPU of HK$0.0875 and closing unit price of HK$2.40 as at 30 Jun 2022) 81.6% 18.4% Number of Issued Units 1,496,625,180 Market Capitalizat
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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