Fortune Real Estate Investment Trust · HKEX:778
Fortune Real Estate Investment Trust — FY2004 Earnings Presentation
30 slides from Fortune Real Estate Investment Trust's earnings presentation, Jan 27, 2005
Slide 1: SGX Miscellaneous Announcement: Presentation Slides
MISCELLANEOUS Page 1 of 1 Print this page Miscellaneous * Asterisks denote mandatory information Name of Announcer * FORTUNE REAL ESTATE INV TRUST Company Registration No. N/A Announcement submitted on behalf of FORTUNE REAL ESTATE INV TRUST Announcement is submitted with FORTUNE REAL ESTATE INV TRU
Slide 2: Results for the year ended 31 Dec 2004
Results for the year ended 31 Dec 2004 Investor briefing 27 Jan 2005
Slide 3: Disclaimer
Disclaimer This presentation is focused on comparing actual results versus forecasts outlined in the Fortune REIT Prospectus dated 28 Jul 2003. It should be read in conjunction with Paragraph 9 of Fortune REIT’s financial results for the period 1 Jan 2004 to 31 Dec 2004 announced on SGXNET. The info
Slide 4: Contents
Year ended Dec 2004 Contents • In brief • Financial highlights • Hong Kong economy • Asset performance • Strategy and summary Asset Management (Singapore) Limited 3
Slide 5: Summary
Year ended Dec 2004 Summary Asset Management (Singapore) Limited 4
Slide 6: In brief
Year ended Dec 2004 In brief DPU exceeded forecast by 6.0%; NAV up 33% to HK$6.87/unit • Fortune REIT distribution per unit – 6.0% above forecast for full 2004 year – 3.8% higher in 4Q04 than same quarter year ago • NAV per unit up 33% to HK$6.87 • Hong Kong retail sales growth remains healthy • O
Slide 7: Financial highlights
Year ended Dec 2004 Financial highlights Asset Management (Singapore) Limited 6
Slide 8: Trust income
Year ended Dec 2004 Trust income DPU 6.0% above forecast for 2004 full year • Rental rev. 6.4% Fortune REIT results, year ended Dec 2004 above forecast Actual Forecast1 Var (HK$’000) (HK$’000) (%) • Costs 1.0% above Revenue 238,092 223,831 6.4 forecast Charge-out collections 70,117 80,965 (13.4) –
Slide 9: Trust income
Year ended Dec 2004 Trust income DPU in 4Q04 was 3.8% higher than same quarter last year Fortune REIT quarterly results, actual • Rental revenue 4Q 04 4Q 03 Ch (HK$’000) (HK$’000) (%) 12.7% higher Revenue 64,599 57,305 12.7 – due to higher Charge-out collections 18,804 16,147 16.5 occupancy and Pr
Slide 10: Distribution yield
Year ended Dec 2004 Distribution yield Tax-exempt yield 5.3%; pre-tax yield 6.4% FRT distribution, year ended Dec 20041 Distribution yield Tax-exempt 9% 8.53% F’cast2 Actual Pre-tax5 8% DPU3 7.03% - YE Dec 04 (HK$) 0.3152 0.3340 0.4055 7% 6.63% 6.44% Distribution yield, based on 6% - IPO price4 6.
Slide 11: Debt management
Year ended Dec 2004 Debt management Debt servicing below forecast, now 51% fixed Fortune REIT interest expense, YE Dec 04 Hong Kong interest rates 5 Actual F’cast1 Var 4 Borrowing costs (HK$m) 19.5 26.9 (7.4) 3 % Avg int. rate2 2.02% 3.00% (98) bps 2 1 Source: ARASL 0 Notes: Dec-02 Jun-03 Dec-03 J
Slide 12: Interest rate impact
Year ended Dec 2004 Interest rate impact Impact of rate rises likely to be small Fortune REIT interest expense scenarios, 2005F 2004A 2005F Avg. int • Avg. interest cost (HK$m) (HK$m) rate to remain below Borrowing costs 19.5 - 2.02% 2.6% in worst Rate rise scenarios for 20051 case scenario - 50 b
Slide 13: Balance sheet
Year ended Dec 2004 Balance sheet Book value currently HK$6.87 per unit Fortune REIT balance sheet 31/12/03 31/12/04 Ch • NAV per unit up 33% (HK$m) (HK$m) (%) – property valuation Investment properties1 3,389 4,184 23.5 rose 23.5% Total assets 3,379 4,187 23.9 – book value per unit is Total liabi
Slide 14: Investment properties
Year ended Dec 2004 Investment properties Portfolio valuation up 23.5% as a whole Fortune REIT property valuation Dec 03 Dec 04 Ch • Portfolio valuation up (HK$m) (HK$m) (%) Metropolis Mall 1,593 1,959 23.0 23.5% Ma On Shan Plaza 1,023 1,282 25.3 – based on valuation by Smartland 276 346 25.4 Ches
Slide 15: Distribution
Year ended Dec 2004 Distribution FRT units trade ex-distribution on 2 Feb 05 Distribution payment, 2H04 Amount (HK$/unit) 0.1640 Ex date 2 Feb 05 Books closure 4 Feb 05 Currency election1 18 Feb 05 Payment 28 Feb 05 Source: ARASL Note: 1. Unitholders can choose to have the distribution paid in HKD
Slide 16: Hong Kong economy
Year ended Dec 2004 Hong Kong economy Asset Management (Singapore) Limited 15
Slide 17: Economic growth
Year ended Dec 2004 Economic growth Hong Kong’s economy remains strong; easing in 2005 expected Hong Kong economic indicators (%) • Economy strong, easing in 2002 2003 2004E 2005F 2005 expected Real GDP 1.9 3.2 7.3 4.6 CPI -1.6 -1.9 -0.2 1.5 – tourist arrivals likely exceeded 20m in 2004 Nominal G
Slide 18: Retail sales
Year ended Dec 2004 Retail sales Retail sales increase is broad-based Hong Kong retail sales (nominal) 240 • Consumer sentiment lifted 220 by – falling unemployment HK$b 200 – rising property market 180 160 Dec-95 Dec-97 Dec-99 Dec-01 Dec-03 Retail sales (moving annual total) Dec-05 • Across the b
Slide 19: Asset performance
Year ended Dec 2004 Asset performance Asset Management (Singapore) Limited 18
Slide 20: Ma On Shan Plaza
Year ended Dec 2004 Ma On Shan Plaza Almost fully-occupied after opening of KCRC station KCRC station-MOS Plaza pedestrian link • KCRC station and link to mall – opened (21 Dec 04) • Shopper traffic expected to rise further – 4Q04 vs 4Q03: +41% • Occupancy now at 99% – experiencing more leasing en
Slide 21: The Metropolis Mall
Year ended Dec 2004 The Metropolis Mall Shopper traffic rising on occupancy, promotions and rail link East TST pedestrian link • Shopper traffic increasing Hung Hom KCR – 4Q04 vs 4Q03: +31% KCR • KCRC East Tsim Sha Tsui East TST link pedestrian link MTR KCR – opened (late Oct 04) Metropolis Mall E
Slide 22: Enhancing value of the malls
Year ended Dec 2004 Enhancing value of the malls Value creation: continuous improvements to enhance revenue Pro-active leasing Maximising atrium space use Metropolis Mall Jubilee Court Shopping Centre Ma On Shan Plaza Smartland Asset Management (Singapore) Limited 21
Slide 23: Portfolio occupancy
Year ended Dec 2004 Portfolio occupancy Portfolio occupancy rose to 95% • Portfolio almost full Actual occupancy (%) – Ma On Shan Plaza and Dec 03 Sep 04 Dec 04 Smartland at 99% Metropolis Mall 59.0 72.7 87.8 – Household and Jubilee above Ma On Shan Plaza 95.7 96.9 98.9 96% Smartland 95.6 97.5 98.
Slide 24: Portfolio expiry profile
Year ended Dec 2004 Portfolio expiry profile Well spread out expiry profile, though more in second half 2005 Metropolis Mall Ma On Shan Plaza Smartland 80% 80% 80% 60% 60% 60% 40% 40% 40% 20% 20% 20% 0% 0% 0% 1H05 2H05 2006 2007 2008 and 1H05 2H05 2006 2007 2008 and 1H05 2H05 2006 2007 2008 and be
Slide 25: Tenant trade mix
Year ended Dec 2004 Tenant trade mix Trade mix remains diversified By Gross Rentable Area (%) Metro- Ma On House- polis Shan Smart- hold Jubilee Port- Mall Plaza land Center Court folio Banking & Real Estate Services 22.4 8.0 1.3 0.5 2.6 10.3 Community Services 5.3 0.0 10.5 0.0 18.8 6.1 Electronic
Slide 26: Rentals
Year ended Dec 2004 Rentals Avg. passing rental up 11% since Dec 03 Portfolio rents1 Portfolio passing rents 17 Avg. passing Qtrly Actual HK$ psf per month rental ch. occupancy (HK$ psf/mth) (%) (%) 16 Dec 2003 15.01 1.5 83.8 Mar 2004 15.19 1.2 83.2 15 Jun 2004 16.73 10.1 90.4 Sep 2004 16.65 - 0.5
Slide 27: Strategy
Year ended Dec 2004 Strategy Asset Management (Singapore) Limited 26
Slide 28: Unit activity
Year ended Dec 2004 Unit activity Unit price and volume1 Yield gap1 6.8 8 9% 4.0% Volume (daily, mil) 6.4 8% Unit price (HKD) 6 3.5% 6.0 7% 5.6 4 6% 3.0% 5.2 5% 2 2.5% 4.8 4% 4.4 0 3% 2.0% Jun-03 Dec-03 Jun-04 Dec-04 Jun-05 Dec-05 Jun-03 Dec-03 Jun-04 Dec-04 Jun-05 Dec-05 Volume (RHS) Fortune REIT u
Slide 29: Strategy and summary
Year ended Dec 2004 Strategy and summary Focus on further revenue improvements; acquisitions in progress • Overall occupancy now close to full • Focus on improving revenue through – raising rentals (with improving macro environment) – pro-active leasing and reconfiguring of space into smaller unit
Slide 30: Contact
Year ended Dec 2004 Contact ARA Asset Management (Singapore) Limited #09-01 Suntec Tower 2 John Lim Yung Yu-Ming, CFA 9 Temasek Boulevard CEO Fund Manager Singapore 038989 [email protected] [email protected] Tel: +65 6835 9232 Fax: +65 6835 9672 Unit 5507, 55/F The Center Cheryl Seow, CPA 99 Qu
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