Prosperity REIT 2021 Interim Results

• Distributable income increased by 1.2% Y-o-Y while payout ratio is maintained at 100%.
• NPI decreased by 0.4% Y-o-Y while cost-to-revenue ratio remained stable at 19.6%.
• Occupancy rate remained robust at 96.0% amid challenging market condition.
• Unit buyback benefits Prosperity REIT and unitholders as a whole.
• Our commitment towards the “Sustainability Vision 2030” is well demonstrated by green initiatives.
• Gearing ratio remained at a healthy level of 22.7%.

Hong Kong, 12 August 2021 – 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 2021 (the “Reporting Period”).

Distributable income increased by 1.2% while payout ratio is maintained at 100%.

During the Reporting Period, the distributable income recorded an increase of 1.2% Y-o-Y. Distribution per unit was HK$0.0901, representing an annualized distribution yield of 6.1%[1] as at 30 June 2021. Payout ratio is maintained at 100%. Prosperity REIT has proved to be a highly defensive investment tool throughout different economic cycles. 

Net Property Income decreased by 0.4% Y-o-Y while cost-to-revenue ratio remained stable at 19.6%.

During the Reporting Period, Net Property Income decreased by 0.4% Y-o-Y mainly due to drop in revenue, caused by negative rental reversion registered since 2H 2020. Cost-to-revenue ratio was maintained stable at 19.6%. 

Occupancy rate remained robust at 96.0% amid challenging market condition.

Despite the intermittent resurgence of the pandemic and Sino-US trade tension, the portfolio occupancy rate remained robust at 96.0%, due to the well-balanced and diversified tenant mix. This enabled us to withstand market volatilities and maintain a stable income stream.

Unit buyback benefits Prosperity REIT and unitholders as a whole.

As a return of capital, unit buyback aligns with unitholders’ interest. The buyback also enhances Net Asset Value and neutralizes DPU dilution impact due to payment of manager fee. We plan to continue unit buyback if under the right market condition. 

Our commitment towards the “Sustainability Vision 2030” is well demonstrated by green initiatives.

Pledging to the “Sustainability Vision 2030”, we commit to integrate sustainability into our business operations. 100% of portfolio GFA are recognized with green building certifications. We also closed Prosperity REIT’s maiden five-year HK$800 million sustainability-linked term loan for refinancing and general corporate funding purposes. We will continue to explore initiatives that create long-term values for our stakeholders.

Gearing ratio remained at a healthy level of 22.7%.

Amidst difficult market conditions, our property valuation dropped by 1.9%. Yet, our gearing ratio remained at a stable level of 22.7% which provides us with a strong balance sheet to withstand economic volatility and to take advantage of future growth opportunities.

Prospects

Despite the signs of economic recovery in Hong Kong, it is uneven in different sectors and the uncertainty lingered around the resurgence of virus variant cases and the time for re-opening the border to China. Other uncertain factors weighed on the recovery pace include China-US trade relations and US Fed’s tapering plan. Hong Kong will continue to leverage on China’s strong recovery momentum.

While the COVID-19 pandemic has prolonged effects on our business, we will continue to implement flexible asset management strategies. We will also capitalize on the opportunities brought by the office decentralization trend and the forthcoming full opening of Shatin-to-Central Link.

[1] Based on Prosperity REIT’s closing unit price of HK$2.97 as at 30 June 2021.

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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

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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