DPU decreased by 14.9% Y-o-Y to HK$0.0745, representing an annualized distribution yield of 8.5%¹.

During the Reporting Period, elevated interest rates, energy prices, inflation, geopolitical conflicts and trade tensions continue to impact on global economy. DPU recorded a drop of 14.9% Y-o-Y to HK$0.0745 mainly driven by the sharp rise in interest expense Y-o-Y due to rate hikes. This represented an annualized distribution yield of 8.5%¹.

100% payout ratio maintained since listing. Unit buyback continues to be our strategy to return capital to unitholders and enhance DPU and NAV per unit.

Prosperity REIT has maintained 100% payout ratio since listing. Benefitting both Prosperity REIT and unitholders, unit buyback continues to be our strategy to return capital to unitholders and enhance DPU and NAV per unit.

No refinancing needs till 2025. Prudent interest rate hedging arrangement as risk management.

Prosperity REIT has no refinancing needs till 2025. Gearing ratio was maintained at a healthy level of 23.7%, providing us with a strong balance sheet to withstand interest rate volatility and to take advantage of future growth opportunities. As at 30 June 2023, 55% of our term loans have been hedged through interest rate swaps, as prudent financial management.

Occupancy rate remained solid at 97.0% and negative portfolio rental reversion rate continued to narrow.

Despite of abundant new office supply, rents and occupancy rates are stabilizing as the local economy revives. The portfolio occupancy rate stood at a stable level of 97.0% as at 30 June 2023 and a high tenant retention rate of 75.4% was achieved. The healthy occupancy rate and tenant retention rate enabled us to provide solid income stream. Negative portfolio rental reversion rate continued to narrow.

Revenue decreased by 0.5% Y-o-Y with cost-to-revenue ratio at 22.8%.

Revenue decreased by 0.5% Y-o-Y mainly due to the frictional tenancy movements in certain properties, though the negative impact was partly offset by the increase in rental related income and the positive rental reversions registered in Trendy Centre and New Treasure Centre. Cost-to-revenue ratio was at 22.8%.

Since 2014, multiple AEIs have demonstrated our continuous ESG initiatives fostering a green and smart portfolio.

Since 2014, AEIs across our portfolio including the renovation of main lobbies and typical floors, the replacement of chiller plants, the installation of smart building management systems and solar panels, and the launching of a tenant app demonstrate our continuous ESG initiatives to foster a green and smart portfolio. This helps to widen and upgrade our tenant base. As a testament to our relentless ESG efforts, Prosperity REIT has attained accolades including a 5-Star rating and Green Star accreditation in 2022 Global Real Estate Sustainability Benchmark (“GRESB”), as well as “Platinum” award under BEAM Plus Comprehensive Scheme for The Metropolis Tower.

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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 seven high-quality properties in the decentralized business districts of Hong Kong, comprising all, or a portion of, three Grade A office buildings, one commercial building, two industrial/office buildings and one industrial building, with a total gross rentable area of about 1.28 million sq. ft..

www.prosperityreit.com

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 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.

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