Press Releases
Prosperity REIT 2024 Annual Results
- Full year distribution per unit (“DPU”) decreased by 15.0% Y-o-Y to HK$0.1198, representing a distribution yield of 9.7%1. 100% payout ratio maintained since listing.
- Revenue decreased by 2.7% Y-o-Y with cost-to-revenue ratio at 24.0%.
- Occupancy rate remained solid at 94.2% amid challenging market conditions.
- Prudent capital management with gearing ratio at 25.1% and interest rate hedging ratio at 39%.
- Secured the first Green and Transition Loan in Hong Kong’s real estate industry and committed to SBTi2 target.
- Renowned green building achievements as a testament to our relentless sustainability efforts.
During the Reporting Year, business environment remained challenging under ongoing high interest rates, geopolitical tensions and trade conflicts. Full year DPU dropped 15.0% Y-o-Y to HK$0.1198. This represented a distribution yield of 9.7%1. Payout ratio is maintained at 100% since listing.
Revenue decreased by 2.7% Y-o-Y with cost-to-revenue ratio at 24.0%.Revenue decreased by 2.7% Y-o-Y, mainly due to the pressure from the vacancy and rental levels at Prosperity Millennia Plaza and Trendy Centre. Part of the negative impact was mitigated by the improved occupancy rate in The Metropolis Tower, and positive rental reversion registered in certain properties. Our portfolio leverages on the geographic proximity to key public transport links and the diversified property types to provide stable income stream. Cost-to-revenue ratio was at 24.0%.
Hong Kong office market continued to be under pressure due to subdued leasing demand and surge in supply of vacant office space. Corporates remain cautious amid prevailing economic uncertainties. Despite the challenging market conditions, Prosperity REIT recorded stable portfolio occupancy rate and tenant retention rate at 94.2%3 and 71.8%4 respectively
Prospects
The International Monetary Fund has projected steady global economic growth of 3.3% in 2025. Meanwhile, Hong Kong’s 2025 GDP is expected to grow in the range of 2.0% to 3.0%. Although the Mainland’s supportive measures will help Hong Kong’s economy, the escalation of tariffs under the US government casts uncertainty. While the Fed has commenced its rate cut cycle, interest rates could stay high for longer.
Despite the ongoing challenges, Prosperity REIT is well-positioned to capitalize on its unique portfolio strategically located along Tuen Ma Line, with our flagship asset, The Metropolis Tower, adjacent to Hung Hom interchange station. We will maintain flexible leasing strategies to cope with different market conditions.
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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..
About the REIT Manager
ESR Asset Management (Prosperity) Limited (the "REIT Manager") is the manager of Prosperity REIT. The REIT Manager is a wholly-owned subsidiary of ESR Group Limited. ESR Group is Asia-Pacific’s leading New Economy real asset manager and one of the largest listed real estate investment managers globally.
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 Contacts
Vicho Chung Manager, Investments and Investor Relations (852) 2169 0928 | Kenny Kwong Assistant Manager, Investor Relations & Research (852) 2169 0928 |