Presentation 2014 Results 6th March 2015 2014 Review • Strong underlying profit • Increased contribution from commercial portfolio • Moderately reduced residential performance despite strong profits from Hong Kong and mainland China • Stable asset values 2014 Results 1 2014 Results Highlights 2013 2014 US$935m Underlying profit attributable to shareholders US$930m US$255m Non-trading items US$397m US$1,190m Profit attributable to shareholders US$1,327m US¢ 39.73 Underlying earnings per share US¢ 39.52 US¢ 50.56 Earnings per share US¢ 56.42 US$11.41 NAV per share US$11.71 US¢ 12.00 Final dividend per share US¢ 13.00 US¢ 18.00 Total dividend per share US¢ 19.00 2014 Results 2 Commercial Property 2014 Results 3 Commercial Portfolio HKL’s Share (’000 sq. ft NFA) Office Retail Hotel Total 4,142 592 143 4,877 - 94 151 245 1,651 134 - 1,785 Jakarta 661 66 - 727 Hanoi 105 11 - 116 Bangkok 27 61 - 88 Others 71 - 312 383 TOTAL 6,657 958 606 8,221 Hong Kong Macau Singapore 2014 Results 4 Hong Kong 1. One Exchange Square 2. Two Exchange Square 3. Three Exchange Square 4. The Forum 5. Jardine House 6. Chater House 7. Alexandra House 8. Gloucester Tower 9. Edinburgh Tower 9a. The Landmark Mandarin Oriental 10. York House 11. Landmark Atrium 12. Prince’s Building 2014 Results 5 Hong Kong Central Grade “A” Office Rental Index Index 180 160 140 120 100 80 2010 2011 2012 2013 2014 Source: Jones Lang LaSalle 2014 Results 6 Hong Kong Central Grade “A” Office Market m sq. ft 2.5 New supply Net take up Vacancy Vacancy % 15 2 12 1.5 9 1 6 0.5 3 0 0 -0.5 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 Source: Jones Lang LaSalle Disclaimer: The above forecast shall be regarded solely as a general guide. No representation is made nor responsibility accepted by Jones Lang LaSalle for the accuracy of the whole or any part whatsoever. 2014 Results 7 Hong Kong Grade “A” Office Market m sq. ft 10 New supply Net take up Vacancy Vacancy % 15 8 12 6 9 4 6 2 3 0 0 -2 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 Source: Jones Lang LaSalle Disclaimer: The above forecast shall be regarded solely as a general guide. No representation is made nor responsibility accepted by Jones Lang LaSalle for the accuracy of the whole or any part whatsoever. 2014 Results 8 Hongkong Land Central Portfolio: Office Average Net Rent (HK$ psf/month) Year-end Vacancy Weighted Average Lease Expiry (years) 2014 Results 2012 2013 2014 90 99 102 3.4% 5.0% 5.4% 3.7 3.6 3.4 9 Hong Kong: Office Tenant Profile Property 6% Trading 2% Governments 1% Accounting 8% Others 13% Banks and other financial services 39% Legal 31% 2014 Results 10 Hong Kong: Expiration and Interim Rent Revisions Total lettable office area subject to expiration/rent revisions (‘000 sq. ft) % of area subject to expiration/rent revisions Average expiring net rent (HK$ psf/month) 2014 Results 2015 2016 2017 1,034 865 1,456 25% 21% 35% 95 105 104 11 Hongkong Land Central Portfolio: Retail 2012 2013 2014 Average Net Rent (HK$ psf/month) 171 201 214 Year-end Vacancy 0% 0% 0% Weighted Average Lease Expiry (years) 2.5 2.4 2.8 Note: Vacancy excludes areas under renovation. 2014 Results 12 Macau One Central (47%-owned) • Retail component 96% let • 5% increase in average rent 2014 Results 13 Singapore One Raffles Link (100%-owned) 2014 Results One Raffles Quay (33%-owned) Marina Bay Financial Centre (33%-owned) 14 Singapore CBD Grade “A” Office Market m sq. ft 5 New supply Net take up Vacancy Vacancy % 15 4 12 3 9 2 6 1 3 0 0 -1 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 CBD – Raffles Place, Shenton Way, Marina Bay & Marina Centre Source: Jones Lang LaSalle Disclaimer: The above forecast shall be regarded solely as a general guide. No representation is made nor responsibility accepted by Jones Lang LaSalle for the accuracy of the whole or any part whatsoever. 2014 Results 15 Singapore Commercial Portfolio (’000 sq. ft NFA) Office Retail Total HKL’s Share 239 73 312 312 One Raffles Quay 1,330 4 1,334 445 Marina Bay Financial Centre 2,906 179 3,085 1,028 TOTAL 4,475 256 4,731 1,785 One Raffles Link 2014 Results 16 Singapore: Office Tenant Profile Natural resources 8% Accounting 3% Others 9% Legal 5% Banks and other financial services 75% 2014 Results 17 Singapore: Office Average Rents and Occupancy Average Gross Rent (S$ psf/month) Year-end Vacancy Weighted Average Lease Expiry (years) 2012 2013 2014 8.7 9.1 9.2 5.6% 1.7% 1.7% 6.6 5.9 5.5 Note: According to local market practice, the average office rent includes management charges. 2014 Results 18 Singapore: Expiration and Interim Rent Revisions 2015 2016 2017 HKL’s Share: Total lettable office area subject to expiration/rent revisions (‘000 sq. ft) 120 311 317 % of area subject to expiration/rent revisions 7% 19% 19% Average expiring rent (S$ psf/month) 9.5 11.1 9.2 Note: According to local market practice, the average office rent includes management charges. 2014 Results 19 Jakarta Jakarta Land (50%-owned) • Existing portfolio features 135,000 sq. m. • Average gross rent: US$24.0 psm per month (2013: US$21.6 psm per month) • Occupancy: 95.4% • Construction begun on new tower, WTC 3 • Strong demand for office space 2014 Results WTC 3 20 Hanoi and Bangkok Central Building (71%-owned) Gaysorn (49%-owned) 63 Ly Thai To (74%-owned) 2014 Results 21 Phnom Penh EXCHANGE SQUARE (100%-owned) • Mixed-use complex • Heart of Phnom Penh • Completion: 2017 2014 Results 22 Beijing WF CENTRAL (90%-owned) • Prestigious retail centre, which includes a small luxury hotel • 43,000 sq. m. lettable retail area • Completion: end-2016 2014 Results 23 Beijing CBD (30%-owned) • Prime Grade “A” office • 120,000 sq. m. lettable area • Completion: 2019 2014 Results 24 Residential Property 2014 Results 25 Hong Kong Serenade • Final 14 units sold and handed over in 2014 2014 Results 26 Macau One Central (47%-owned) • Final five units handed over in 2014 2014 Results 27 Mainland China Shenyang Beijing Chengdu Chongqing Background image from Google Earth Background image from Google Earth 2014 Results 28 Mainland China – Completed Projects, Beijing Maple Place Project Project Type • 16 units handed over in 2014 Maple Place (90%) • 64 units available for future sale, mostly leased Central Park Central Park (40%) 2014 Results • 72 units of serviced apartments 29 Mainland China – Development Projects Summary Project Interest Project Type Bamboo Grove, Chongqing 50% Primarily Residential Landmark Riverside, Chongqing 50% Residential (76%), Office, Retail & Others Yorkville South, Chongqing 100% Primarily Residential Yorkville North, Chongqing 100% Residential (74%), Office, Retail & Others Central Avenue, Chongqing 50% Residential (66%), Office & Retail Chengdu Project 50% Residential (46%), Office (14%), Retail (17%), Hotel & Serviced Apartments (23%) Shenyang Projects 50% Primarily Residential 2014 Results 30 Mainland China – Development Projects Summary HKL’s Share Year of Acquisition Site Area (ha) Developable Area (m sq. m.) Constructed (m sq. m.) Under Construction (m sq. m.) Bamboo Grove, Chongqing 2005 39 0.73 0.54 0.09 Landmark Riverside, Chongqing 2009 17 0.75 0.10 0.07 Yorkville South, Chongqing 2010 39 0.88 0.28 0.29 Yorkville North, Chongqing 2011 54 1.09 0.16 0.26 Central Avenue, Chongqing 2013 20 0.55 - 0.04 Chengdu Project 2010 10 0.45 0.03 0.12 Shenyang Projects 2007 58 1.01 0.13 - 237 5.46 1.24 0.87 Project TOTAL 2014 Results 31 Mainland China – Revenue Recognised US$m Chongqing Chengdu Shenyang 700 Beijing $621m 600 500 $451m 400 300 200 $213m 100 0 2012 2013 2014 Note: The above chart includes HKL’s share of Joint Ventures & Associates. 2014 Results 32 Mainland China – Contracted Sales US$m Chongqing 700 Chengdu Shenyang Beijing $632m $635m 2013 2014 600 500 $429m 400 300 200 100 0 2012 Note: The above chart includes HKL’s share of Joint Ventures & Associates. 2014 Results 33 Mainland China – Contracted Sales US$m Chongqing Chengdu Shenyang Beijing 500 400 300 200 $373m $369m $200m $229m $263m $262m 100 0 1H '12 2H '12 1H '13 2H '13 1H '14 2H '14 Note: The above chart includes HKL’s share of Joint Ventures & Associates. 2014 Results 34 Mainland China – Contracted Sales • At 31st December 2014, US$533m (2013: US$534m) in sold but unrecognised contracted sales • Some 80% of contracted sales scheduled to be recognised in 2015 2014 Results 35 Singapore Choa Chu Kang Grove Parcels A & B Terrasse Ripple Bay LakeVille Palms @ Sixth Avenue J Gateway Hallmark Residences Uber 388 Marina Bay Suites 2014 Results 36 Singapore – Completed Project Marina Bay Suites (33%-owned) • 221 units, 0.47m sq. ft • Completion: 2013 • Three units handed over in 2014 • 16 units available for sale 2014 Results 37 Singapore – Completions in 2014 Terrasse Project Units GFA (‘000 sq. ft) Sold Terrasse 414 476 100% 95 98 100% Uber 388 2014 Results Uber 388 38 Singapore – Projects for Completion from 2015 Units GFA (‘000 sq. ft) Estimated Completion Date Pre-Sold Palms @ Sixth Avenue 32 109 2015 - Completed 56% Hallmark Residences 75 110 2015 - Completed 88% Ripple Bay 679 672 2015 100% J Gateway 738 576 2016 100% LakeVille 699 741 2016 53% Choa Chu Kang Grove 1,327 1,240 2018 Not launched TOTAL 3,550 3,448 Project 2014 Results 39 Indonesia Nava Park, Greater Jakarta (49%-owned) • JV with PT Bumi Serpong Damai • Site area: 67 ha • Southwest of central Jakarta • 223 units launched for sale; 59% pre-sold • Completion of 1st phase: 2016 2014 Results 40 Indonesia Anandamaya Residences (40%-owned) • JV with Astra International • 509 units of luxury apartments; 78% pre-sold • Completion: 2018 2014 Results 41 Philippines Roxas Triangle (40%-owned) • JV with Ayala Land • 182 units; 70% pre-sold • Completion: 2019 2014 Results 42 Financial Results 2014 Results 43 Consolidated Profit and Loss Account 2013 1,857 (940) (US$m) 2014 Revenue Net operating costs 1,876 (809) 917 Operating profit 235 Share of results of joint ventures 123 (64) Net financing charges (69) (149) (4) Tax Non-controlling interests 1,067 (187) (4) 935 Underlying profit 930 255 Non-trading items 397 1,190 2014 Results Profit attributable to shareholders 1,327 44 Revenue (US$m) 2013 2014 925 Commercial revenue 961 932 Residential revenue 915 1,857 2014 Results Total 1,876 45 Underlying Profit by Business 2013 (US$m) 2014 914 Commercial property 953 413 Residential property 398 (60) Corporate expenses (62) 1,267 1,289 (103) Net financing charges (103) (224) Tax (247) (5) 935 2014 Results Non-controlling interests Underlying profit (9) 930 46 Commercial Property Underlying Profit 2013 (US$m) 2014 Greater China 743 29 - Hong Kong - Mainland China & Macau 772 29 Southeast Asia & Others 122 20 914 2014 Results - Singapore - Others Total 130 22 953 47 Residential Property Underlying Profit 2013 (US$m) 2014 Greater China 19 116 - Hong Kong - Mainland China & Macau 69 179 Southeast Asia & Others 278 - 413 2014 Results - Singapore - Others Total 149 1 398 48 Consolidated Cash Flow (US$m) 2013 2014 908 Operating activities 699 (378) Investing activities 88 (404) Financing activities 122 248 Others Decrease in net debt (426) 7 368 (3,273) Net debt at beginning of period (3,025) (3,025) Net debt at end of period (2,657) 2014 Results 49 Operating Activities (US$m) 2013 917 (77) 2014 Operating profit excluding non-trading items Net interest paid 1,067 (81) (139) Tax paid (134) (367) Payments for residential sites (429) (303) Development expenditure on residential projects (454) 918 Proceeds from residential sales 962 151 Dividends received from joint ventures 153 (192) 908 2014 Results Others (385) 699 50 Investing Activities (US$m) 2013 (40) (422) 104 (134) 114 (378) 2014 Results 2014 Major renovations capex Funding of joint ventures Loan repayments from joint ventures Development expenditure Others (38) (216) 479 (137) 88 51 Consolidated Cash Flow (US$m) 2013 2014 908 Operating activities 699 (378) Investing activities 88 Financing activities (397) (7) - Dividends paid by the Company - Dividends paid to minority shareholders (404) (5) (426) 122 Others 248 Decrease in net debt (3,273) Net debt at beginning of period (3,025) Net debt at end of period 2014 Results (421) 7 368 (3,025) (2,657) 52 Consolidated Balance Sheet 2013 23,583 4,167 27,750 2,670 1,247 3,917 (1,743) 29,924 26,899 3,025 29,924 2014 Results (US$m) 2014 Investment properties - Subsidiaries - Joint ventures Properties held for sale - Subsidiaries - Joint ventures Others Gross assets (excluding cash) Financed by: - Total equity - Net debt 23,697 4,474 28,171 2,923 1,372 4,295 (2,211) 30,255 27,598 2,657 30,255 53 Investment Property – Basis of Valuation Capitalisation Rates 2013 1H 2014 2014 Hong Kong Office - Exchange Square 1 & 2 4.00% 4.00% 4.00% Hong Kong Retail - Landmark Atrium 4.50% 4.50% 4.50% Singapore Office - MBFC 3.80% 3.80% 3.75% Note: These capitalisation rates are provided on an indicative basis. 2014 Results 54 Investment Property – Carrying Values 2013 (US$m) 2014 Greater China 22,302 1,368 - Hong Kong - Mainland China & Macau 22,336 1,650 Southeast Asia & Others 3,603 477 27,750 - Singapore - Others Total 3,628 557 28,171 Note: The analysis includes share of Joint Ventures & Associates. 2014 Results 55 Properties Held for Sale – Carrying Values 2013 (US$m) 2014 Greater China 62 2,308 - Hong Kong - Mainland China & Macau 23 2,435 Southeast Asia & Others 1,456 91 - Singapore - Others 3,917 (923) 2,994 1,696 141 4,295 Pre-sale proceeds Net investment (941) 3,354 Note: The analysis includes share of Joint Ventures & Associates. 2014 Results 56 Gross Assets at 31st Dec 2014 By Activity By Location Commercial 88% Residential 12% 2014 Results Hong Kong 73% Mainland China and Macau 11% Southeast Asia 16% 57 Treasury Management Summary 2013 2014 Net debt (US$m) 3,025 2,657 11% 10% 6.7 7.3 2.7% 2.9% -S&P A- A - Moody’s A3 A3 Gearing Average tenor of debt (years) Average interest cost Credit ratings 2014 Results 58 2014 Financing Activity • US$452m notes issued under MTN programme • Total of US$1.2bn in banking facilities raised - US$355m in bilateral facilities - US$500m project loan for WF CENTRAL - US$339m project loan for Choa Chu Kang project 2014 Results 59 Maturity Profile of Committed Facilities/Bonds US$m Bank Facilities (Drawn & Undrawn) 4,000 (US$m) Bonds * $3,263m 3,500 3,000 2,500 2,000 $1,286m 1,500 1,000 500 $785m $675m 2016 2017 $882m $310m 0 2015 2018 2019 2020+ * Includes bonds and notes issued under MTN Programme which are at face value. 2014 Results 60 Liquidity at 31st Dec 2014 2013 (All figures in US$bn) HK$1 S$2 US$ RMB Total 7.1 Committed lines 4.7 2.0 - 0.5 7.2 4.4 Gross debt 3.1 1.2 - - 4.3 2.7 Available lines 1.6 0.8 - 0.5 2.9 1.4 Cash - 0.3 1.0 0.3 1.6 4.1 Available liquidity 1.6 1.1 1.0 0.8 4.5 Notes: (1) HK$ debt includes US$ debt swapped into HK$. (2) S$ debt includes HK$ debt swapped into S$. 2014 Results 61 Outlook • Commercial leasing markets in Hong Kong and Singapore remain stable in 2015 • Further strong profits expected from residential development activities in mainland China • No residential profits in Hong Kong and lower contribution from Singapore • The Group continues to seek opportunities in premium commercial and residential developments in Greater China and Southeast Asia 2014 Results 62 Thank you Hongkong Land www.hkland.com
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