Champion REIT Announces 2021 Annual Results

Champion Real Estate Investment Trust (stock code: 2778), the owner of Three Garden Road and Langham Place, announces its financial results for year ended 31 December 2021.
Summary of financial results

FY 2021 FY 2020 Change
Total Rental Income (HK$ mil) 2,495 2,633 -5.2%
Net Property Income (HK$ mil) 2,197 2,347 -6.4%
Distributable Income (HK$ mil) 1,503 1,554 -3.3%
Distribution per unit (HK$) 0.2279 0.2496 -8.7%

31 Dec 2021 31 Dec 2020 Change
Gross Value of Portfolio (HK$ mil) 65,296 67,318 -3.0%
Net Asset Value per unit (HK$) 8.25 8.61 -4.2%
Gearing Ratio 22.9% 23.0% -0.1pp

Overview
The persistent COVID-19 pandemic continued to pose challenges to the operating environment for our business in 2021. Amid the gloomy market conditions, Champion REIT recorded a drop in distributable income by 3.3% to HK$1,503 million and distribution per unit (“DPU”) declined 8.7% to HK$0.2279.

Three Garden Road
Three Garden Road recorded a shrank of the rental income by 3.8% to HK$1,460 million in 2021 (2020: HK$1,518 million). Average passing rent decreased to HK$108.3 per sq. ft. (based on lettable area) as at 31 December 2021. Demand from new and existing tenants gradually materialised in the second half, boosting the occupancy of the property to 89.0% as at 31 December 2021.

Langham Place Office Tower
The impact of negative rental reversion drove down rental income of Langham Place Office Tower to HK$365 million in 2021 (2020: HK$378 million), and passing rents of the property declined to HK$47.1 per sq. ft. (based on gross floor area) as at 31 December 2021. Occupancy of the property increased to 96.3% as at 31 December 2021, given the rebound in leasing momentum for beauty and healthcare tenants.

Langham Place Mall
Amid the challenging environment for retail leasing, the total rental income of the property went down 9.1% to HK$670 million (2020: HK$738 million). The average passing rents dropped to HK$165.9 per sq. ft. (based on lettable area) as at 31 December 2021. The mall remained fully occupied as at 31 December 2021, attributed by the spearhead of the Langham Beauty concept at our premises which upgraded the tenant mix and strengthened the strategic positioning of the mall.

Distribution
Distributable income of the Trust dropped 3.3% to HK$1,503 million (2020: HK$1,554 million) and DPU dropped 8.7% to HK$0.2279 (2020: HK$0.2496). Based on the closing unit price of HK$3.99 recorded on 31 December 2021, the total DPU represented a distribution yield of 5.7%.

Asset Value
The appraised value of the Trust’s property portfolio was HK$65.3 billion as at 31 December 2021, declining 3.0% from HK$67.3 billion as at 31 December 2020.

Sustainability
We forged ahead to embrace change with resilience and agility to manage business continuity and put people at the heart of what we do. In addition to the BEAM Plus Existing Building Platinum certification, Langham Place Mall was awarded the international EDGE green building certification, making it the first shopping mall in Hong Kong to receive the recognition. The Trust also secured its first sustainability-linked loan and sustainability-linked swap, befitting our sustainability objectives.

Outlook
Amid the ongoing COVID-19 pandemic, the outlook of Hong Kong office and retail property market remains uncertain and difficult. The tightening of social distancing measures would continue to affect the business of our tenants. Relaxation of cross-border controls and quarantine requirements locally would be crucial for economic recovery.

Looking forward, we will continue to adopt a flexible leasing strategy to retain tenants and maintain high occupancy rates. Despite the unfavourable conditions, we strive to inject impetus to growth through asset enhancement and trade mix rebranding initiatives. We will take a prudent approach in balance sheet management in a rising rate environment. Equipped with a sufficient reserve, the Trust stands ready to pursue acquisition opportunities globally with a goal to generate long-term returns.

About Champion REIT (stock code: 2778)
Champion Real Estate Investment Trust is a trust formed to own and invest in income producing office and retail properties. The Trust focuses on Grade A commercial properties in prime locations. It currently offers investors direct exposure to nearly 3 million sq. ft. of prime office and retail floor area. These include two Hong Kong landmark properties, Three Garden Road and Langham Place, as well as a joint venture stake in 66 Shoe Lane in Central London. Since 2015, the Trust has been included in the Constituent of Hang Seng Corporate Sustainability Benchmark Index of Hang Seng Indexes.
Website: https://www.championreit.com/

For press enquiries:
Strategic Financial Relations Limited
Vicky Lee Tel: 2864 4834 Email: vicky.lee@sprg.com.hk
Christina Cheuk Tel: 2114 4979 Email: christina.cheuk@sprg.com.hk
Yvonne Lee Tel: 2864 4847 Email: yvonne.lee@sprg.com.hk
Website: http://www.sprg.com.hk/






Topic: Press release summary

Champion REIT Announces Opening of LANGHAM BEAUTY

Champion Real Estate Investment Trust (“Champion REIT” or “Trust”) (Stock Code: 2778), owner of Three Garden Road and Langham Place, announced the opening of the brand-new beauty concept store – LANGHAM BEAUTY in Langham Place Mall. Located on level 1 of the mall and housing internationally renowned beauty brands, including ARMANI BEAUTY, DIOR BEAUTY, ESTEE LAUDER, LANCOME and SHISEIDO, LANGHAM BEAUTY represents a new presence of beauty in town and unveils an exquisite shopping experience with an immersive and dynamic forest-like interior design.
With the philosophy of “Be True in Life, Be Kind to Earth, Be a Beautiful You”, LANGHAM BEAUTY has redefined beauty by bringing Humans, Nature and Technology together in a refined and balanced manner. It expresses the true beauty of individuals with a comprehensive understanding of the meaning of inner and outer beauty. Nature provides the best reference for beauty and harmony, while technology allows the essence of nature to be extracted.

With direct relationships formed with premium cosmetics and beauty brands, Langham Place Mall endeavours to elevate customers’ shopping experiences in a more diversified and individualised way. This does not only facilitate the tenant mix management of beauty segment, but also strengthens its leasing strategy with enhanced flexibilities, thus bringing new business opportunities and values to the Trust. Moreover, it gives a synergistic effect to Langham Place Office’s beauty and wellness tenants and further reinforces the mall’s positioning as a trendy retail destination. The Trust expects that the opening of LANGHAM BEAUTY will reap further benefits once the border is re-opened. Valuing sustainability of our mother earth, LANGHAM BEAUTY marks an important milestone in the Trust’s sustainability journey and reinforces its commitment to achieving its 2030 ESG Targets.

In view of this tremendous achievement, LANGHAM BEAUTY, debuted on 21 November 2021, has also prepared a series of exciting opening offers together with 20 beauty brands. During the opening period (from 21 November 2021 to 19 December 2021), LANGHAM BEAUTY will present over 100 exclusive makeup and skincare sets of attractive savings of up to 72% at its physical store, while 10 of which will be available on “Langham Place x LANGHAM BEAUTY eSTORE” as well. Information of such offers is available via:

– LANGHAM BEAUTY eSTORE (https://popup.langhambeauty.com/ANewPresenceOfBeauty/en/)
– Instagram (https://instagram.com/langhambeauty?utm_medium=copy_link)
– Facebook (https://www.facebook.com/langhambeauty/?ti=as)

About Champion REIT (Stock Code: 2778)
Champion Real Estate Investment Trust is a trust formed to own and invest in income producing office and retail properties. The Trust focuses on Grade A commercial properties in prime locations. It currently offers investors direct exposure to nearly 3 million sq. ft. of prime office and retail floor area. These include two Hong Kong landmark properties, Three Garden Road and Langham Place, as well as joint venture stake in 66 Shoe Lane in Central London. Since 2015, the Trust has been included in the Constituent of Hang Seng Corporate Sustainability Benchmark Index of Hang Seng Indexes.

Website: www.championreit.com


Topic: Press release summary

Champion REIT Enters Sustainability-Linked Swap with DBS Hong Kong

Champion Real Estate Investment Trust (“Champion REIT” or “Trust”) (Stock Code: 2778), owner of Three Garden Road and Langham Place, has entered into an agreement concerning cross-currency swap transaction (the “Swap”) with DBS Hong Kong (“DBS”). This derivative transaction is a sustainability-linked swap, which was closed in September 2021. It is designed to provide a hedge against potential interest rate or currency risks related to the Trust’s debt portfolio.
Champion REIT values sustainable development and is dedicated to promoting diversity and inclusion of the community. This rationale is in alignment with the philosophy of DBS, which places great value on leveraging resources to empower women who need support in the community.

Under this sustainability-linked swap, Champion REIT is eligible to receive sponsorship from DBS to support its Women Empowerment Programme – Champion Mothers, provided that Champion REIT can successfully achieve the key performance targets related to women empowerment. Champion REIT initiated this programme in partnership with St. James Settlement and its social enterprise, and aims to support mothers who have children with special educational needs (SEN) and do not have much work experience to unleash their true potential by:

– Providing skill-learning workshops and free pop-up space at Langham Place Mall for these mothers to have a taste of running a business, and
– Establishing buddy relationships among these mothers and female colleagues to share views on managing family and work

The Trust has organised various business skill-sharing sessions and handicraft activities for these mothers and female colleagues from August to October. The handicraft activities include making Organic Peanut Brittles, Aroma Stones and Coin Bags, enabling all participants to learn, have fun and grow together. A pop-up store selling the products crafted by the participating mothers will be launched in Langham Place Mall by the end of 2021.

Champion REIT secured its first sustainability-linked loan with eight banks, including DBS, in June this year. The sustainability-linked swap marks another milestone in the Trust’s sustainability journey and reinforces its commitment to giving back to the community.

About Champion REIT (Stock Code: 2778)
Champion Real Estate Investment Trust is a trust formed to own and invest in income producing office and retail properties. The Trust focuses on Grade A commercial properties in prime locations. It currently offers investors direct exposure to nearly 3 million sq. ft. of prime office and retail floor area. These include two Hong Kong landmark properties, Three Garden Road and Langham Place, as well as joint venture stake in 66 Shoe Lane in Central London. Since 2015, the Trust has been included in the Constituent of Hang Seng Corporate Sustainability Benchmark Index of Hang Seng Indexes.

Website: www.championreit.com

About DBS
DBS is a leading financial services group in Asia with a presence in 18 markets. Headquartered and listed in Singapore, DBS is in the three key Asian axes of growth: Greater China, Southeast Asia and South Asia. The bank’s “AA-” and “Aa1” credit ratings are among the highest in the world.

Recognised for its global leadership, DBS has been named “World’s Best Bank” by Euromoney, “Global Bank of the Year” by The Banker and “Best Bank in the World” by Global Finance. The bank is at the forefront of leveraging digital technology to shape the future of banking, having been named “World’s Best Digital Bank” by Euromoney and the world’s “Most Innovative in Digital Banking” by The Banker. In addition, DBS has been accorded the “Safest Bank in Asia” award by Global Finance for 12 consecutive years from 2009 to 2020.

DBS provides a full range of services in consumer, SME and corporate banking. As a bank born and bred in Asia, DBS understands the intricacies of doing business in the region’s most dynamic markets. DBS is committed to building lasting relationships with customers, and positively impacting communities through supporting social enterprises, as it banks the Asian way. It has also established a SGD 50 million foundation to strengthen its corporate social responsibility efforts in Singapore and across Asia.

With its extensive network of operations in Asia and emphasis on engaging and empowering its staff, DBS presents exciting career opportunities. For more information, please visit https://www.dbs.com.hk/index-zh/default.page.


Topic: Press release summary