Prosperity REIT 2012 Annual Results Announcement
- 56.7% unit price appreciation and 5.8% distribution yield1
- Outstanding asset performance with 36.1% astounding rental reversion rate and 98.5% stable occupancy rate
- Prosperity Place to position as a premium commercial landmark in Kowloon East
- Recognition in corporate governance practices by The Hong Kong Institute of Directors
Hong Kong, 28 February 2013 – Prosperity Real Estate Investment Trust (“Prosperity REIT”) [SEHK: 808] today announced its final results for the year ended 31 December 2012 (the “Reporting Year”).
Delivering attractive returns
Prosperity REIT achieved a fruitful year in 2012 during which we attained strong unit price performance and delivered outstanding operating results.
In 2012, Prosperity REIT’s unit price appreciated by 56.7%, versus the 22.9% increase in the Hang Seng Index. Distributable income having benefited from the resilience of the decentralized office property market, increased by 14.3% year-on-year (“YoY”). We are pleased to announce a total distribution per unit (“DPU”) of HK$0.1354, equivalent to a YoY increase of 12.6% and representing an attractive distribution yield of 5.8%1.
Continued outstanding asset performance
Prosperity REIT’s properties are strategically located in decentralized areas where both demand and supply remained favorable. During the Reporting Year, revenue rose 11.9% YoY to HK$308.4 million. Through prudent cost control, the cost-to-revenue ratio improved to 22.3%. As a result, net property income recorded a leap of 13.2%, reaching HK$239.5 million.
Portfolio occupancy rate remained steady at 98.5% as at 31 December 2012. Average effective unit rent jumped to HK$16.94 per sq. ft., representing an increase of 12.6% YoY. Tenant retention rate further improved to 71.5% while rental reversion rate reached an astounding 36.1%.
Sound financial position
Valuation of Prosperity REIT’s property portfolio registered an uplift of 13.7% YoY to HK$7,952 million, mainly attributable to the increase in rental revenue. As at 31 December 2012, the net asset value per unit was HK$4.24, representing a growth of 17.1% YoY. Gearing ratio remained at a prudent level of 22.4% as at 31 December 2012.
Prosperity Place to position as a premium commercial landmark in Kowloon East
Highlight of the year was the approval by the Hong Kong SAR government to convert the use of Prosperity Place from industrial/office to commercial under the industrial buildings revitalization scheme. This approval allows Prosperity Place to include commercial elements, thus enabling us to tap into the expanding high quality commercial tenant pool in Kowloon East.
Recognition in corporate governance practices by The Hong Kong Institute of Directors
Our Board was bestowed the Directors Of The Year Awards 2012 by The Hong Kong Institute of Directors. This award not only recognizes our Board’s achievements in demonstrating high standards in corporate governance, but is also a gauge of the invaluable confidence given by our stakeholders.
We remain committed to providing stable and sustainable returns to our unitholders. The industrial/office focus in our portfolio allows us to benefit from wholesale conversion under the industrial buildings revitalization scheme. We plan to continue utilizing this unique opportunity going forward to upgrade our portfolio.
Due to the ongoing trend of office decentralization and, in particular, our strategic position in Kowloon East, Prosperity REIT with its strong fundamentals will, barring unforeseen circumstances, remain resilient amid the uncertain global economy.
About Prosperity REIT
Prosperity REIT [SEHK: 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 diverse portfolio of seven high-quality properties in the decentralized business districts of Hong Kong, comprising all, or a portion of, two Grade A office buildings, two commercial buildings, two industrial/office buildings and one industrial building, with a total gross rentable area of about 1.22 million sq. ft..
About ARA Asset Management (Prosperity) Limited
Prosperity REIT is managed by ARA Asset Management (Prosperity) Limited, a wholly-owned subsidiary of ARA Asset Management Limited, which is listed on the Main Board of the Singapore Exchange Securities Trading Limited.
The information contained in this press release does not constitute an offer or invitation to sell or the solicitation of an offer or invitation to purchase or subscribe for units in Prosperity REIT in Hong Kong or any other jurisdiction.
Media and Investor Contact
Investor Relations Manager
Tel: (852) 2169 0928
Fax: (852) 2169 0968
1 Based on Prosperity REIT’s closing unit price of HK$2.35 as at 31 December 2012