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Real Estate Investment TReal Estate Investment Trustrust
房地產投資信託基金房地產投資信託基金
Wong Yee Han, Roni (043102)Tsang Pui Yee, Polly (043112)Kwok Chi Keung, Rex (043126)Yeung Tat Chung, Angus (043097)
AgendaAgenda• Introduction of REIT• Example of REIT – The Link• Comparison of different REIT in HK• Evaluation and Recommendations• Conclusion
Roni Wong
Introduction of REIT
Roni Wong
What is Real Estate What is Real Estate Investment trust (REIT)?Investment trust (REIT)?
• collective investment scheme in a portfolio of income-generating real property
• Manager distributes all / almost of net income holders
• Annual or semi-annual basis
Roni Wong
• Investor buy / sell through a stock exchange
• REIT do not redeem investors interests• Long term income yield• not for capital appreciation on resale
What is Real Estate What is Real Estate Investment trust (REIT)? (con’t)Investment trust (REIT)? (con’t)
Roni Wong
AdvantagesAdvantages• Realize and redeploy capital investment asset become more liquidate• Regular income • Invest in an asset class which is difficult to access • Remove double taxation
Roni Wong
Example of REIT –
The Link 領匯房地產投資信託基金領匯房地產投資信託基金
Polly Tsang
BackgroundBackground• Stock code: 823 • invests in 180 retail and carpark facilities • one million sq.m of retail space and aro
und 80,000 carpark spaces • 40% of people lived near the Link REIT p
roperties
Polly Tsang
Polly Tsang
Investment strategies Investment strategies • invest in properties for the long-term • focus on sustainable-income
producing properties with the potential for long-term income and capital growth
• maintain a large and geographically diversified portfolio
Polly Tsang
Investment strategies (con’t)Investment strategies (con’t)• convenience-based retail properties primarily
serving the basic consumer needs of the residents of the adjacent housing estates and other visitors
• carparks serving the tenants and customers of the retail properties and the residents of the surrounding
• neighborhoods and other visitors
Polly Tsang
Dividend DistributionDividend Distribution• no less than 90% of total distributable in
come • not less than HK$0.6176 • 21 December 2006 - 32.81 HK cents • 30 August 2006 - 21.81 HK cents
Polly Tsang
Advantages Advantages • Certainty as to business focus• A policy to distribute of an amount
equivalent to 100% of total distributable income
• Financial and operating transparency
Polly Tsang
Comparison of different Comparison of different REITs in Hong KongREITs in Hong Kong
Link REIT(Link REIT( 領匯房產基金領匯房產基金 ,823) ,823) Gzi REIT(Gzi REIT( 越秀房產信託基金越秀房產信託基金 ,405),405)Champion REIT(Champion REIT( 冠君產業信託冠君產業信託 ,2778),2778)Prosperity REIT(Prosperity REIT( 泓富產業信託泓富產業信託 ,808),808)
Rex Kwok
Link REIT--- invests in 180 retail and carparks facilities
Rex Kwok
• With an Internal Floor Area ("IFA") of approximately one million sq.m of retail space and around 80,000 carparks spaces
• the properties are on the doorstep to 40% of Hong Kong's seven-million populations.
Rex Kwok
Gzi REIT---consists of commercial properties located in Guangzhou
1.White Horse Units2.Fortune Plaza Units3.City Development Plaza Units4.Victory Plaza Units
Rex Kwok
The overall occupancy of the 4 properties improved to over 90%
• White Horse Building is
maintained at 100% • Fortune Plaza at
approximately 90.2% • City Development Plaza
at approximately 92.6% • Victory Plaza at 100%
Rex Kwok
Champion REIT---formed primarily to office and retail properties in Hong Kong
• Comprises 91.5% of the Gross Rentable Area of Citibank Plaza and substantially all of the parking spaces at Citibank Plaza.
Rex Kwok
• Citibank Plaza comprises Citibank Tower a 47-storey building and ICBC Tower a 37-storey building and includes a retail podium and a carpark
• It is hub of banking and financial activities in the Central District
Rex Kwok
Prosperity REIT---own a high quality portfolio of seven
Hong Kong commercial properties
Rex Kwok
• Comprising three Grade A office buildings in decentralized business districts
• A portion of three industrial/office buildings
• A portion of one industrial building
Rex Kwok
DiscussionDiscussion
According to their different portfolio of properties, which REITs will you subscribe and why?
Rex Kwok
Evaluation andRecommendations
Angus Yeung
EvaluationEvaluation• Market scale is large
• Low quality of capital • Underdeveloped supervision
structure • Lack of experience of fund managers• Unclear investment strategies
Angus Yeung
RecommendationsRecommendations1) Redevelop the assets (Shopping mall, Carparks, Estates) Capital quality and rent level of private
properties
2) Human resources management Training and learning from other count
ries (eg, USA, Singapore)Angus Yeung
Recommendations (con’t)Recommendations (con’t)3) Investment strategies For business Focus on SME or large companies Benefit to properties Adjust the interest rate
Angus Yeung
ConclusionConclusion• REIT will become more popular
• The market scale will increase to 60%
• Active in financial market
Q & A
THE END