Prosperity Real Estate Investment Trust, controlled by Cheung Kong (Holdings), reported distributable income of HK$72.63 million as it released half-year results for the first time since listing on December 16 last year. Its annualised distribution yield, calculated on the basis of the half-year distribution and the stock's closing price on June 30, stood at 6.97 per cent. In its initial public offering prospectus, Prosperity advertised an annual yield of 5.31 per cent. The reit, which has seven office and industrial-office properties in outlying districts such as Hunghom and Kwun Tong, declared a dividend of 5.77 HK cents per unit - a 6.7 per cent improvement on the dividend forecast in the prospectus. Together with distributable income of HK$29.03 million, or 2.31 HK cents a share, carried forward from last year, the total dividend was 8.08 HK cents. Chairman Justin Chiu Kwok-hung attributed the better than expected results to continued strong demand for office space. 'Demand for grade A office space outstripped supply, pushing up rents and occupancy rates in both the prime and [non-core] commercial districts. We have recorded a strong average rental reversion rate of 59.2 per cent on our properties, with the highest over 100 per cent.' This was helped by a tenant retention rate of 76.4 per cent, he added. Prosperity's occupancy rate rose to 96 per cent, up 4.1 per cent since the end of last year. Net asset value rose 6.2 per cent to HK$2.40 a unit. Prosperity units have lost 26 per cent of their value this year to date and are down 18 per cent since listing. They closed unchanged at HK$1.80 yesterday. To enhance its earnings, Mr Chiu said the reit planned to improve its tenant mix and maximise space use to generate additional income. It would continue to look for acquisitions, especially of office and industrial-office buildings in non-core districts. He did not identify any target properties.