Champion Real Estate Investment Trust announced its 2023 annual results

Mondo Finance Updated on 2024-02-22

wednesday, 21 february 2024, 19:02 hkt/sgt

* champion reit

- Langham Place mall saw a significant increase in tenant sales by 505%, which is higher than the market average.

The office leasing market remains challenging.

Langham Place office building has achieved BEAM Plus Platinum certification for existing buildings.

Hong Kong, 21 February 2024 - ACN Newswire) – Champion Real Estate Investment Trust (stock code: 2778), which holds properties at 3 Garden Road and Langham Place properties, announced its 2023 annual results.

Summary of Results

At a glance

After the full resumption of travel in 2023, the return of tourists will promote the recovery of Hong Kong's retail market. While overall tourism and consumer demand remained below pre-pandemic levels, the Trust's retail rental income grew satisfactorily as a result of the rebound in sales from ** and tenant sales. However, office leasing activity in Hong Kong continued to be subdued as tenants continued to prioritize cost control. The Trust's rental income is modest**20% to 23HK$1.2 billion and net property income of **42% to 19HK$4.6 billion. The high-interest rate environment increased the cost of cash financing by 41 during the period3% to 5HK$9 billion, distributable income** 136% to 11HK$2.2 billion, while DPU per ** unit decreased by 139% to 0HK$1683.

3 Garden Road

Although leasing enquiries have increased after the full reopening of the border, the overall leasing momentum in the central office market in 2023 is still insufficient. Despite the challenging market, the occupancy rate of Three Garden Road remained stable at 82 as at 31 December 20238%。Rental income decreased to 12 due to renewal rent**HK$2.2 billion (2022: 13.)HK$4.6 billion. To enhance our facilities, we have completed a comprehensive upgrade of the lift system to enhance efficiency, and installed new EV charging stations to keep pace with the increasing number of EVs in Hong Kong.

Langham Place office building

During the year, the medical and beauty industries continued to commence new business at Langham Place office building. As at 31 December 2023, the occupancy rate of Langham Place remained at 93A stable level of 3%. As at 31 December 2023, lifestyle tenants remained the anchor tenants of the property, accounting for 74% of the tenant mix. Rental yield**37% to 3HK$5 billion (2022: 3.)HK$6.3 billion).

Langham Place Mall

In 2023, Hong Kong's total retail sales increased by 162%, indicating that the overall retail market is recovering at a satisfactory pace after the pandemic. Tenant sales at Langham Place also increased by 505%, which is higher than the market average, mainly due to the strong recovery of the beauty industry after the full reopening of the border. Rental yields in shopping malls increased by 139% to 7HK$4 billion (2022: 6.)HK$5 billion). Due to tenant turnover, the occupancy rate of the mall was 98 as at 31 December 20236%。

Dispatch

Distributable income during the trust period**136% to 11HK$2.2 billion (2022: 12.)HK$9.8 billion), while DPU decreased by 13.8 billion9% to 0HK$1683 (2022: 0.).HK$1954). Based on the closing price of ** units on December 29, 20232222HK$45, equivalent to an annual distribution rate of 69%。

The value of the asset

As at 31 December 2023, the valuation of the Trust's property portfolio was HK$62.9 billion, a decrease of 10%。

Sustainability

Our initiatives in climate resilience, stakeholder engagement and community well-being contribute to an inclusive workplace. Langham Place has achieved the BEAM Plus Existing Platinum certification, which is another achievement in our efforts to achieve our 2030 green building goals. During the year, we held our inaugural ESG Forum and encouraged tenants to participate in the Green Challenge with the goal of saving energy and reducing waste. Through the Food Waste to Farm to Table programme, the Christmas Social Enterprise Bazaar and our flagship event, Fun Classical, we are committed to promoting a balanced and sustainable lifestyle to our staff, tenants and enthusiasts.

Outlook

The global economy is fraught with uncertainties in 2024 due to geopolitical tensions and wars in some regions, but slowing inflation and interest rate cuts are expected to ease the pressure on commercial property valuations and interest expense. As for the local retail market, after a solid recovery in 2023, a strong local currency could stifle growth this year. In a challenging market environment, we will continue to strive to optimise the rental yield of our portfolio and manage risks.

Photo 1: (left) Ms. Hou Xun, Chief Executive Officer (left) and Ms. Carol Luk, Chief Investment and Investor Relations Officer (right).

Fig. 2. Ms. Hou Xun, Chief Executive Officer.

In relation to Champion Real Estate Investment Trust (stock code: 2778).

Champion REIT owns and invests in office and retail properties that provide rental income. The Trust primarily invests in Grade A commercial properties located in prime locations. It currently owns two landmark properties in Hong Kong, Three Garden Road and Langham Place, and owns 66 Shoe Lane in the heart of London in the form of a joint venture with a total gross floor area of approximately 3 million square feet, allowing investors to invest directly in high-quality Grade A office and retail properties.

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