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2010 Interim Results - Continued to perform solidly during the Reporting Period

2010-08-20

Hong Kong, 20 August 2010 - Prosperity Real Estate Investment Trust ("Prosperity REIT") [SEHK: 0808] today announced its unaudited interim results for the six months ended 30 June 2010 (the "Reporting Period").

Prosperity REIT continued to perform solidly during the Reporting Period. Revenue and net property income grew by 1.8% and 2.1% respectively in year-on-year ("YoY") terms, resulting in a YoY increase of 0.2% in distribution per unit ("DPU"). Meanwhile, the upward valuation of our property portfolio increased the net asset value per unit to HK$2.48, as at 30 June 2010. These stable results were made possible due to the REIT Manager's proactive approach to asset management, as well as prudent cost control management.

In light of the satisfactory performance, Stephen Chu, Chief Executive Officer and Executive Director of ARA Asset Management (Prosperity) Limited (Manager of Prosperity REIT) announced that the unitholders would receive an interim DPU of HK$0.0555 for the Reporting Period. This represents an annualized distribution yield of 7.9% . Operations Review

Operations Review

Prosperity REIT's net property income of HK$105.8 million and revenue of HK$133.7 million represented YoY growth of 2.1% and 1.8%, respectively. Prosperity REIT portfolio's occupancy rate improved to 98.3% from 93.2% YoY, and the average effective unit rent was HK$14.72 per sq. ft. The cost-to-revenue ratio and gearing ratio remained sound at 20.8% and 31.7%, respectively. These encouraging figures were attributable to the REIT Manager's professional management expertise and the effective tenant recruitment strategies which are soundly in place.

Financial Review

Revenue - During the Reporting Period, revenue improved to HK$133.7 million, being HK$2.5 million or 1.8% higher than the last corresponding half year. The revenue comprised HK$112.6 million worth of rental and car park income, plus HK$21.1 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 the increase in average occupancy rate during the Reporting Period.

Net Property Income - The net property income was HK$105.8 million, exceeding the last corresponding half year by HK$2.2 million or 2.1%. The cost-to-revenue ratio was 20.8%.

Distribution - The distributable income of the half year from 1 January 2010 to 30 June 2010 is HK$74.3 million, equivalent to a DPU of HK$0.0555.

Prospects

We believe Prosperity REIT will continue to benefit from the favorable conditions that are currently prevailing in the Hong Kong business environment. In particular, demand in the city's commercial property sector and business confidence is likely to continue growing steadily, barring any unforeseen circumstances. Meanwhile, we will implement more innovative asset-enhancement initiatives to add greater value to Prosperity REIT's properties and ensure that our portfolio remains a market leader. 

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