• • 100% payout ratio maintained since listing. Distribution per unit (“DPU”) decreased by 14.4% Y-o-Y to HK$0.0638, representing an annualized distribution yield of 9.2%¹.
  • No refinancing needs till November 2025. Prudent interest rate hedging arrangement as risk management.
  • Revenue decreased by 1.1% Y-o-Y with cost-to-revenue ratio at 23.3%.
  • Occupancy rate remained solid at 94.9% amid challenging market conditions.
  • Completed a strategic review on our sustainability roadmap for the coming years till 2030.

Hong Kong, 16 August 2024 – ESR Asset Management (Prosperity) Limited (the "REIT Manager"), as manager of Prosperity Real Estate Investment Trust ("Prosperity REIT") [SEHK: 808], announces the interim results of Prosperity REIT for the six months ended 30 June 2024 (the “Reporting Period”).

100% payout ratio maintained since listing. DPU decreased by 14.4% Y-o-Y to HK$0.0638, representing an annualized distribution yield of 9.2%¹.

During the Reporting Period, business environment remained challenging given the impacts of prolonged high interest rates, geopolitical tensions and trade conflicts. DPU dropped 14.4% Y-o-Y to HK$0.0638. This represented an annualized distribution yield of 9.2%¹. Payout ratio is maintained at 100% since listing.

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

Prosperity REIT has no refinancing needs till November 2025. Gearing ratio was stable at 24.7%, providing us with a resilient balance sheet to withstand volatilities and seize future growth opportunities. As at 30 June 2024, 40% of our term loans have been hedged through interest rate swaps, as prudent financial management.

Revenue decreased by 1.1% Y-o-Y with cost-to-revenue ratio at 23.3%.

Revenue decreased by 1.1% Y-o-Y mainly due to pressure on rental levels and vacancy of our office properties. Prosperity REIT has a well-balanced and decentralized portfolio with Grade A office, commercial, industrial/office and industrial buildings, providing stable income stream. Cost-to-revenue ratio was at 23.3%.

 Occupancy rate remained solid at 94.9% amid challenging market conditions.

The local office market remained competitive as market vacancy rate stayed relatively high, though with modest improvement in space take-up. Corporations continued to prioritize cost-saving amid ongoing economic uncertainty and high business operating cost, limiting the leasing demand. Despite the challenging market conditions, Prosperity REIT recorded stable portfolio occupancy rate and tenant retention rate at 94.9%² and 70.5%³ respectively.

Completed a strategic review on our sustainability roadmap for the coming years till 2030.

Prosperity REIT has completed a strategic review on its sustainability roadmap for the coming years till 2030. We will commit to new GHG emission targets, including Scope 3, using 2021 as a refreshed baseline year, aligning with the Science Based Targets initiative (“SBTi”). These targets will be achieved via proactive implementation of a series of green asset enhancement initiatives (“AEIs”) that will benefit Prosperity REIT, the tenants and the community. These AEIs will not only reduce energy consumption and GHG emissions within our portfolio, but also generate savings in electricity and repairs & maintenance expenses.

Prospects

The World Bank projects that global economic growth will stabilize at 2.6% in 2024, while downside risks from heightened interest rates and geopolitical frictions persist. Potential interest rate cuts are expected to be favourable for Hong Kong’s economy and real estate market, but the upcoming US presidential election and slower revival of Mainland China’s economy would impact on the outlook. 

Despite of the headwinds confronted, Prosperity REIT is well-positioned to capitalize on its unique portfolio adjacent to major transportation links and refurbished with green and smart building facilities. We will continue to implement flexible leasing strategies to weather 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..

www.prosperityreit.com

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.

www.esr.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.

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