2009 Interim Results - Maintained positive results in terms of revenue and net property income
Hong Kong, 21 August 2009 - Prosperity Real Estate Investment Trust ( "Prosperity REIT" ) [SEHK: 0808] today announced its unaudited interim results for the six months ended 30 June 2009 (the "Reporting Period").
Despite the impact of the global economic downturn, Prosperity REIT has maintained positive results in terms of revenue and net property income in the first six months of 2009. Total revenue and net property income grew by 1.8% and 0.1% year-on-year ("YoY") respectively. A trending to zero delinquency rate has been achieved during the Reporting Period.
We, ARA Asset Management (Prosperity) Limited, as the manager of Prosperity REIT (the "Manager"), are pleased to announce that our unitholders will receive an interim distribution per unit ("DPU") of HK$0.0554 for the Reporting Period, representing an annualized distribution yield of 10.5%.
Prosperity REIT's performance during the Reporting Period reflects our balanced tenant mix, effective property management and close business relationships with tenants.
Our encouraging performance, though amidst the challenging wider macro-economic conditions, suggests that Prosperity REIT's operating strategy is working well.
By responding quickly to market conditions and implementing an effective tenancy recruitment policy, we have attained a satisfactory operational performance. During the Reporting Period, the average effective unit rent rose by 6.3% YoY to HK$14.96 per sq. ft., while the portfolio's occupancy rate was 93.2% as at 30 June 2009. Revenue and net property income rose to HK$131.23 million and HK$103.64 million respectively. The rental reversion rate and tenant retention rate remained positive at 12.9% YoY and 60.3% YoY respectively.
The cost-to-revenue ratio and gearing ratio remained sound at 21.0% and 35.7% respectively as at 30 June 2009.
Revenue - During the Reporting Period, revenue improved to HK$131.2 million, being HK$2.3 million or 1.8% higher than the last corresponding half year. The revenue comprised HK$110.4 million worth of rental and car park income, plus HK$20.8 million of rental related income. Rental and car park income was HK$2.2 million or 2.0% above the last corresponding half year. This increase was mainly due to an effective and proactive lease management system which led to an overall improvement in average effective unit rent.
Net Property Income - The net property income was HK$103.6 million, exceeding the last corresponding half year by HK$0.1 million or 0.1%. The cost-to-revenue ratio was 21.0%.
Distribution - For the Reporting Period, the unaudited distributable income of Prosperity REIT to unitholders of Prosperity REIT was HK$73,065,000. The interim DPU is HK$0.0554, representing an annualized distribution yield of 10.5%, based on the closing unit price of HK$1.06 as of 30 June 2009, which is higher than 2008’s corresponding half year by 14.1%.
We are cautiously optimistic about the upcoming economic prospects. Hong Kong's economy is poised to benefit from the Mainland's growth prospects and supportive policies.
With our solid fundamentals, aggressive leasing initiatives, cost effective asset enhancement strategies and market standing in high-quality Grade A office, industrial/office and industrial property sector in Hong Kong, Prosperity REIT is well-positioned to maintain our steady performance.
About Prosperity REIT
Prosperity REIT (Stock Code: 808) is a Hong Kong collective investment scheme authorized under section 104 of the Securities and Futures Ordinance (Chapter 571 of Laws of Hong Kong). Prosperity REIT owns a geographically diverse portfolio of seven commercial properties in the decentralized business districts of Hong Kong, comprising all or a portion of, three Grade A office buildings, three industrial/office buildings and one industrial building with a total gross rental area of about 1.22 million square feet.
Prosperity REIT is managed by ARA Asset Management (Prosperity) Limited
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(The information shown herein does not constitute an invitation or offer to acquire, purchase or subscribe for securities. Investment involves risk. You should carefully consider whether the investment product mentioned herein is appropriate for you in view of your personal circumstances. Past performance is no guide to future performance. Investors should refer to the offering document of Prosperity REIT for further details and risks involved. The price of investment products may move up or down. Losses may be incurred as well as profits made as a result of buying and selling investment products.)