Champion Real Estate Investment Trust (2778) investor relations material

Executive summary

• Rental income and distributable income declined year-over-year due to negative rental reversions and market headwinds, but property valuations and occupancy remained resilient, with Three Garden Road at 82.2%, Langham Place Office at 86.2%, and Langham Place Mall at 99.5%.

• All 2026 debt maturities were refinanced, including a HK$3.0 billion sustainability-linked loan, and undrawn committed facilities stood at HK$2,560 million, supporting strong liquidity.

• Langham Place Mall saw a sales rebound driven by new retail tenants, creative placemaking, and proactive tenant management.

• Sustainability initiatives advanced, including new ESG awards, certifications, and tenant engagement programs.

• Net asset value per unit rose slightly to HK$6.48, with gearing ratio stable at 25.4%.

Financial highlights

• Total rental income for H1 2026 was HK$949 million, down 7.8% year-over-year.

• Net property income fell 9.3% to HK$780 million; distributable income dropped 9.1% to HK$432 million.

• Distribution per unit was HK$0.0633, a 9.7% decrease year-over-year; annualized yield at 6.1%.

• Net profit before distribution was HK$548 million, reversing a loss in the prior year due to a positive fair value adjustment.

• Cash finance costs fell to HK$264 million from HK$291 million, reflecting lower HIBOR rates.

Outlook and guidance

• Rental income and distributions for full-year 2026 are expected to remain under pressure due to lingering negative rental reversions.

• Central office leasing sentiment is improving, with Three Garden Road set for major asset enhancement initiatives.

• Retail sector to benefit from inbound tourism and continued tenant mix optimisation at Langham Place Mall, supported by robust marketing campaigns.

• Prudent capital management and ongoing efforts to broaden lender relationships and manage interest rate risk.