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Prosperity REIT 2014 Interim Results

2014-08-14

 

Hong Kong, 14 August 2014 – ARA Asset Management (Prosperity) Limited (the "REIT Manager"), as manager of Prosperity Real Estate Investment Trust ("Prosperity REIT") [SEHK: 808], is pleased to announce the interim results of Prosperity REIT for the six months ended 30 June 2014 (the “Reporting Period”).

9.5% YoY uplift in interim DPU and 6.7%1 attractive annualized distribution yield

Prosperity REIT delivered a healthy set of results for the Reporting Period. Distributable income rose 11.3% year-on-year (“YoY”) to reach HK$115.3 million, mainly attributable to the additional income contribution from 9 Chong Yip Street acquired in January 2014, as well as a strong rental reversion rate of 28.6% for the entire portfolio.

The REIT Manager is pleased to announce a distribution per unit (“DPU”) of HK$0.0815 for the Reporting Period, representing a 9.5% YoY uplift, and an attractive annualized distribution yield of 6.7%[1].

 

Additional income contribution from newly acquired 9 Chong Yip Street

Prosperity REIT successfully completed its first major acquisition in January 2014. The acquisition of 9 Chong Yip Street was the major contributing factor to the 12.8% increase in the portfolio valuation of HK$9,609 million. As the acquisition was completed on 22 January 2014, 9 Chong Yip Street provided a partial contribution and accounted for 7.9% of the portfolio revenue during the Reporting Period. The acquisition has generated additional distribution for Prosperity REIT’s unitholders.

 

Resilient operating performance through effective asset management strategies

During the Reporting Period, Prosperity REIT achieved a strong rental reversion rate of 28.6%, complemented with a stable occupancy rate of 97.8%. This resilient performance was attributable to our proactive leasing strategies, premium quality of our properties, as well as our attentive property management services, which enabled us to stand out from keen competitions and attract quality tenants in the decentralized leasing market.

 

Financial position remained healthy

Prosperity REIT’s gearing ratio rose to 28.9% as at 30 June 2014, from 20.9% as at 31 December 2013, due to the drawdown of existing revolving credit facility and new loan facilities to finance the acquisition of 9 Chong Yip Street. The REIT Manager believes this level of gearing remained healthy, providing us with a strong balance sheet to take advantage of future growth opportunities.

 

Prospects

Prosperity REIT, being a long-term player in Kowloon East, has expanded its presence in the district through the acquisition of 9 Chong Yip Street on a timely basis, and is well-positioned to gain further benefits as the district transforms to the second central business district of Hong Kong (“CBD2”). We will continue to implement effective asset management strategies that successfully drive rental income. Meanwhile, a high level of financial flexibility will be maintained so as to ensure stable and sustainable returns to Prosperity REIT’s unitholders.

 

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 the Laws of Hong Kong). Prosperity REIT owns a diverse portfolio of eight high-quality properties in the decentralized business districts of Hong Kong, comprising all, or a portion of, three Grade A office buildings, two commercial buildings, two industrial/office buildings and one industrial building, with a total gross rentable area of about 1.35 million sq. ft..

www.prosperityreit.com

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.

www.ara-asia.com

Disclaimer

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

Carey Kwan

Investor Relations Manager

careykwan@ara.com.hk

Abel Mak

Property Analyst

abelmak@ara.com.hk

Tel: (852) 2169 0928

Fax: (852) 2169 0968

 



[1]Based on Prosperity REIT’s closing unit price of HK$2.42 as at 30 June 2014