Prosperity Real Estate Investment Trust · HKEX:808
Prosperity Real Estate Investment Trust — FY2016 Earnings Presentation
27 slides from Prosperity Real Estate Investment Trust's earnings presentation, March 2017
Slide 1: Final Results for the year ended 31 Dec 2016
Final Results For the year ended 31 Dec 2016 March 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 Outlook & Strategies Appendix ProsperityREIT Prosperity REIT2015 2016Final FinalResults ResultsPresentation Presentation 3
Slide 4: Results Highlights
Results Highlights
Slide 5: Results Highlights
Results Highlights Revenue Net Property Distributable Distribution Income Income Per Unit 3.2% 3.6% 1.7% 0.5% HK$438.7m HK$452.9m HK$357.8m HK$258.4m 1 HK$345.5m HK$254.1m HK$0.1768 HK$0.1777 FY15 FY16 FY15 FY16 FY15 FY16 FY15 FY16 Rental Occupancy Cost-to- Average Reversion Rate revenue Effective R
Slide 6: Unit Price Performance 2016 and Attractive Yield
Unit Price Performance 2016 Outperformance Prosperity REIT in Unit Price: HS REIT Index HS Index 9.7% 1 HS Property Index 9.7%1 4.7% 0.4% -3.1% Prosperity REIT HS REIT Index HS Index HS Property Index Attractive yield: 5.8%2 5.8%2 3.8%3 3.7%3 1.9%3 0.3%4 0.3%4 Prosperity REIT's HS IndexHS Index Yiel
Slide 7: FY16 Key Takeaways
FY16 Key Takeaways Refinancing completed ● Debt maturity profile extended to Nov 2019 ● Further release of pledged property provides growth opportunities Interest rate hedge in place against potential hike ● 74% fixed rate in place ● Protection on the interest cost based on HIBOR Defensive investmen
Slide 8: Financial Review
Financial Review”
Slide 9: Income Statement
Income Statement (HK$’000) FY16 FY15 Revenue 452,926 438,723 Total property operating expenses (95,079) (93,244) NPI increased by 3.6% Net property income 357,847 345,479 Interest Income 24 68 Manager’s fee (53,426) (51,196) Trust and other expenses (15,805) (8,577) Change in fair value of investmen
Slide 10: Financial Position
Financial Position As at 31 Dec As at 31 Dec Change 2016 2015 Out of HK$10,777m investment properties4, Total assets (HK$m) 10,928.8 10,492.7 +4.2% HK$5,640m was pledged Borrowings1 (HK$m) 2,853.3 2,813.3 +1.4% Interest Rate 5 Other liabilities (HK$m) 559.8 523.7 +6.9% Fixed : Floating 74% : 26% Net
Slide 11: Debt Maturity Profile
Debt Maturity Profile No major refinancing needs until 2019 3,000 2,500 430 2,000 HK$ 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 REIT2015 2016Final FinalRe
Slide 12: Portfolio Valuation
Portfolio Valuation Valuation by Property Type As at 31 Dec 2016 Commercial ● Portfolio valuation at HK$10,777m, up 21.3% HK$2,293m 3.4% compared to 31 Dec 2015 Grade A Office ● Strong growth in Harbourfront HK$6,302m Landmark due to the Whampoa MTR extension Industrial/Office ● 17.3% Strong growth
Slide 13: Operations Review
Operations Review Prosperity REIT 2015 Final Results Presentation 13
Slide 14: Property Income
Property Income Revenue Net Property Income Trendy Centre Trendy Centre Prosperity Prosperity HK$46.7m HK$33.7m Place Place HK$67.1m Prosperity Center Prosperity Center HK$53.5m HK$37.5m HK$28.0m 10.3% 9.4% 14.8% New Treasure 15.0% New Treasure Harbourfront 8.3% Harbourfront 7.8% Centre Centre Landm
Slide 15: Occupancy Rates
Occupancy Rates Portfolio Occupancy Rates Above 95% Since 2006 (As at 31 Dec 2016) The Metropolis Tower 96.1% Prosperity Millennia Plaza 96.6% 9 Chong Yip Street 98.9% Harbourfront Landmark (portion) 100.0% Prosperity Place 94.2% Trendy Centre 95.6% Prosperity Center (portion) 93.1% New Treasure Cen
Slide 16: Commercial Tenants at Prosperity Place
Commercial Tenants at Prosperity Place Diversified retail/services tenants, accounted for around 39.3% of leased gross rentable area of Prosperity Place as at 31 December 2016. F&B - Cafe Education Beauty Fitness & SPA Skincare ProsperityREIT Prosperity REIT2015 2016Final FinalResults ResultsPresent
Slide 17: Promotion Events at Prosperity Place
Promotion Events at Prosperity Place Chinese New Year Summer Easter Christmas ProsperityREIT Prosperity REIT2015 2016Final FinalResults ResultsPresentation Presentation 17
Slide 18: Promotion Events at Prosperity Place
Promotion Events at Prosperity Place Chinese New Year Easter Summer Christmas ProsperityREIT Prosperity REIT2015 2016Final FinalResults ResultsPresentation Presentation 18
Slide 19: 2016 AEIs Updates
2016 AEIs Updates The Metropolis Tower - Anchor Tenant Retention Our top 1 tenant in the portfolio - Canon (55,535 sq.ft.) at The Metropolis Tower have been renewed the tenancy agreement. In order to provide an enjoyable workplace to Canon, the following AEIs have been done in 2016: 1. Upgrading the
Slide 20: Outlook & Strategies
Outlook & Strategies Prosperity REIT 2015 Final Results Presentation 20
Slide 21: Outlook & Strategies: Stable and sustainable distribution
Outlook & Strategies Stable and sustainable distribution to continue ● 100% payout ratio ● Defensive investment as proven in economic cycles ● 173.3%* total return since IPO DPU (HK$) 0.0871 0.0897 0.0906 0.0871 0.0815 0.0815 0.0744 0.0751 0.0660 0.0694 0.0607 0.0554 0.0544 0.0555 0.0546 0.0595 1H09
Slide 22: Tenant mix enhancement and diversification
Outlook & Strategies Tenant mix enhancement and diversification Prosperity Place converted from industrial/office use at no land premium under revitalization scheme in 2012. Revenue uplift after the wholesale conversion. Change of Tenant Mix Year 2012 2014 2016 (As at 31 Dec) Office portion 100% 75.
Slide 23: Subsequent Asset Disposal
Subsequent Asset Disposal Harbourfront Landmark Property The disposal of Harbourfront Landmark Property was completed on 3 March 2017. The disposal amount of HK$885.7 million (subject to the adjusted NAV of its holding company) represented a premium of 49.1% to the appraised value as at 31 December
Slide 24: Appendix
Appendix Prosperity REIT 2015 Final Results Presentation 24
Slide 25: Portfolio Map
Portfolio Map The Metropolis 1 Prosperity 5 Total Gross Rentable Area: 1.35m sq.ft. Tower Place GRA: 271,418 sq. ft. GRA: 240,000 sq. ft. Prosperity Trendy Millennia Plaza 2 Centre 6 6 GRA: 217,955 sq. ft. GRA: 173,764 sq. ft. 8 9 Chong Yip Prosperity Street 3 Center Property 7 GRA: 136,595 sq. ft.
Slide 26: Key Facts
Key Facts Key Facts as at 31 Dec 2016 IPO Date 16 Dec 2005 IPO Price HK$2.16 5.8% Indicative Yield (based on FY16 DPU of HK$0.1777 and closing unit price of HK$3.06 as at 30 December 2016) Number of Issued Units 1,453,669,230 Market Capitalization HK$4.45 billion (US$570.3 million) Average Daily Tra
Slide 27: 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 Units 5508-10, 55/F, The Center 99 Queen’s Road Central Hong Kong Tel: +852 2
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