Champion Real Estate Investment Trust (2778) investor relations material

Executive summary

• Distributable income for the six months ended 30 June 2025 fell 12.6% year-over-year to HK$476 million, with distribution per unit down 13.3% to HK$0.0701.

• Total rental income declined 7.6% to HK$1,029 million, mainly due to negative rental reversion and weaker retail sales.

• Net property income dropped 10.0% to HK$859 million, and net asset value per unit decreased to HK$6.79.

• The property portfolio was valued at HK$58.1 billion as of 30 June 2025, a 3.3% decrease from year-end 2024.

• Celebrated Langham Place Mall's 20th anniversary and launched new wellness initiatives, reinforcing cultural and retail leadership.

Financial highlights

• Distributable income: HK$476 million (down 12.6% year-over-year); distribution per unit: HK$0.0701 (down 13.3%).

• Total rental income: HK$1,029 million (down 7.6% year-over-year); net property income: HK$859 million (down 10.0%).

• Gearing ratio: 24.5% (up from 23.7% at year-end 2024); net asset value per unit: HK$6.79.

• Annualized distribution yield: 6.7% based on closing price of HK$2.08.

• Average effective cash interest rate: 4.0% p.a. (down from 4.2% p.a. year-over-year); undrawn committed facilities: HK$2.94 billion.

Outlook and guidance

• Ongoing trade tensions, geopolitical conflicts, and abundant office supply expected to weigh on the global economy and delay office leasing recovery.

• Flexible leasing and tenant retention strategies prioritized; focus on wellness and medical tenants at Langham Place Office and brand events at Langham Place Mall.

• Lower Hibor since May 2025 expected to reduce interest expenses for the remainder of the year.

• Exploring opportunities to diversify funding sources and deepen ecosystem collaboration.

• Negative rental reversion likely to persist, suppressing rental income and distributions.