Hongkong Land Holdings Limited · SGX:H78
Hongkong Land — FY2016 Earnings Presentation
56 slides from Hongkong Land's earnings presentation, Mar 3, 2017
Slide 1: 2016 Results
Presentation 2016 Results 3rd March 2017
Slide 2: 2016 Review
2016 Review • Underlying profit down 6% • Continued strong contribution from commercial portfolio • Steady residential contribution from mainland China and Singapore • Net assets per share up 9% on higher capital values 1 2016 Results
Slide 3: 2016 Results Highlights
2016 Results Highlights 2015 2016 US$905m Underlying profit attributable to shareholders US$848m US$1,107m Non-trading items US$2,498m US$2,012m Profit attributable to shareholders US$3,346m US¢38.44 Underlying earnings per share US¢36.03 US¢85.50 Earnings per share US¢142.23 US$12.19 NAV per share
Slide 4: Commercial Property
Commercial Property 3 2016 Results
Slide 5: Commercial Portfolio ('000 sq. ft NFA)
Commercial Portfolio (’000 sq. ft NFA) HKL’s Share Office Retail Hotel Total Hong Kong 4,139 572 143 4,854 Macau - 93 151 244 Singapore 1,652 129 - 1,781 Jakarta 664 64 - 728 Hanoi 106 11 - 117 Bangkok 27 61 - 88 Others 71 - 312 383 TOTAL 6,659 930 606 8,195 4 2016 Results
Slide 6: Hong Kong
Hong Kong 1. One Exchange Square 2. Two Exchange Square 3. Three Exchange Square 4. The Forum 5. Jardine House 9 8 1 2 9a 11 6. Chater House 10 3 7 5 7. Alexandra House 6 8. Gloucester Tower 4 12 9. Edinburgh Tower 9a. The Landmark Mandarin Oriental 10. York House 11. Landmark Atrium 12. Prince’s Bu
Slide 7: Hong Kong Central Grade "A" Office Rental Index
Hong Kong Central Grade “A” Office Rental Index Index 180 160 140 120 100 80 2012 2013 2014 2015 2016 Source: Jones Lang LaSalle 6 2016 Results
Slide 8: Hong Kong Central Grade "A" Office Market
Hong Kong Central Grade “A” Office Market m sq. ft Vacancy % New supply Net take up Vacancy 2.5 15 2 12 1.5 9 1 6 0.5 3 0 0 -0.5 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 Source: Jones Lang LaSalle Disclaimer: The above forecast shall be regarded solely as a gen
Slide 9: Hong Kong Grade "A" Office Market
Hong Kong Grade “A” Office Market m sq. ft Vacancy % New supply Net take up Vacancy 10 15 8 12 6 9 4 6 2 3 0 0 -2 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 Source: Jones Lang LaSalle Disclaimer: The above forecast shall be regarded solely as a general guide. No
Slide 10: Hongkong Land Central Portfolio: Office
Hongkong Land Central Portfolio: Office 2014 2015 2016 Average Net Rent (HK$ psf/month) 102 101 103 Year-end Vacancy 5.4% 3.4% 2.2% Weighted Average Lease Expiry (years) 3.4 4.1 3.8 9 2016 Results
Slide 11: Hong Kong: Office Tenant Profile
Hong Kong: Office Tenant Profile Others 14% Banks and Property other financial 6% services Trading 39% 2% Governments 1% Accounting 8% Legal 30% 10 2016 Results
Slide 12: Hong Kong: Expiration and Interim Rent Revisions
Hong Kong: Expiration and Interim Rent Revisions 2017 2018 2019 Total lettable office area subject to 1,322 1,330 1,020 expiration/rent revisions (’000 sq. ft) % of area subject to expiration/rent revisions 32% 32% 25% - Expiration 11% 19% 20% - Rent revisions 21% 13% 5% Average expiring net rent (H
Slide 13: Hongkong Land Central Portfolio: Retail
Hongkong Land Central Portfolio: Retail 2014 2015 2016 Average Net Rent (HK$ psf/month) 214 221 218 Year-end Vacancy 0% 0% 0% Weighted Average Lease Expiry (years) 2.8 2.4 2.8 Note: Vacancy excludes areas under renovation. 12 2016 Results
Slide 14: Singapore
Singapore One Raffles Link One Raffles Quay Marina Bay Financial Centre (100%-owned) (33%-owned) (33%-owned) 13 2016 Results
Slide 15: Singapore CBD Grade "A" Office Market
Singapore CBD Grade “A” Office Market m sq. ft Vacancy % New supply Net take up Vacancy 5 15 4 12 3 9 2 6 1 3 0 0 -1 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 CBD – Raffles Place, Shenton Way, Marina Bay & Marina Centre Source: Jones Lang LaSalle Disclaimer: The
Slide 16: Singapore Commercial Portfolio ('000 sq. ft NFA)
Singapore Commercial Portfolio (’000 sq. ft NFA) Office Retail Total HKL’s Share One Raffles Link 243 68 311 311 One Raffles Quay 1,327 4 1,331 444 Marina Bay Financial Centre 2,900 179 3,079 1,026 TOTAL 4,470 251 4,721 1,781 15 2016 Results
Slide 17: Singapore: Office Tenant Profile
Singapore: Office Tenant Profile Others Natural 11% resources 7% Accounting 3% Legal 6% Banks and other financial services 73% 16 2016 Results
Slide 18: Singapore: Office Average Rents and Vacancy
Singapore: Office Average Rents and Vacancy 2014 2015 2016 Average Gross Rent (S$ psf/month) 9.2 9.5 9.3 Year-end Vacancy 1.7% 3.0% 0.1% Weighted Average Lease Expiry (years) 5.5 5.1 4.8 Note: According to local market practice, the average office rent includes management charges. 17 2016 Results
Slide 19: Singapore: Expiration and Interim Rent Revisions
Singapore: Expiration and Interim Rent Revisions 2017 2018 2019 HKL’s Share: Total lettable office area subject 130 719 320 to expiration/rent revisions (’000 sq. ft) % of area subject to expiration/rent revisions 7.8% 43.5% 19.3% - Expiration 4.4% 5.8% 12.0% - Rent revisions 3.4% 37.7% 7.3% Average
Slide 20: Jakarta
Jakarta Jakarta Land (50%-owned) • Existing portfolio features 135,000 sq. m. NFA WTC 3 • Average gross rent: US$25.3 psm per month (2015: US$25.3 psm per month) • Occupancy: 90% • WTC 3: Construction has progressed to Level 39 (Completion: 2018) 19 2016 Results
Slide 21: Phnom Penh
Phnom Penh EXCHANGE SQUARE (100%-owned) • Mixed-use complex with 30,000 sq. m. NFA • Heart of Phnom Penh • Tenant handover commenced: December 2016 20 2016 Results
Slide 22: Beijing
Beijing WF CENTRAL (84%-owned) • Prestigious retail centre, which includes an exclusive luxury hotel • 43,000 sq. m. NFA • Open: Q4 2017 21 2016 Results
Slide 23: Residential Property
Residential Property 22 2016 Results
Slide 24: Mainland China – Completed Projects, Beijing
Mainland China – Completed Projects, Beijing Maple Place Project Project Type • 31 units handed over in 2016 Maple Place (90%) • 2 units available for future sale Central Park Central Park (40%) • 72 apartments 23 2016 Results
Slide 25: Mainland China – Development Projects Summary
Mainland China – Development Projects Summary HKL’s Share Developable Under Year of Site Area Constructed Project Interest Area Construction Acquisition (ha) (m sq. m.) (m sq. m.) (m sq. m.) Yorkville South, Chongqing 100% 2010 39 0.88 0.51 0.16 Yorkville North, Chongqing 100% 2011 54 1.09 0.34 0.07
Slide 26: Mainland China – Revenue Recognised
Mainland China – Revenue Recognised US$m Chongqing Chengdu Beijing 800 $676m $621m 600 $505m 400 200 0 2014 2015 2016 Note: The above chart includes HKL’s share of Joint Ventures & Associates. 25 2016 Results
Slide 27: Mainland China – Contracted Sales
Mainland China – Contracted Sales US$m Chongqing Chengdu Shanghai Beijing 1,200 $1,105m 1,000 $802m 800 $635m 600 400 200 0 2014 2015 2016 Note: The above chart includes HKL’s share of Joint Ventures & Associates. 26 2016 Results
Slide 28: Mainland China – Sold but Unrecognised Sales
Mainland China – Sold but Unrecognised Sales US$m Sales to be recognised next year Sales to be recognised after next year 1,200 $1,083m 1,000 $821m 800 600 $533m 400 200 0 2014 2015 2016 Note: The above chart includes HKL’s share of Joint Ventures & Associates. 27 2016 Results
Slide 29: Singapore
Singapore Sol Acres LakeVille J Gateway Lake Grande Margaret Drive 28 2016 Results
Slide 30: Singapore – Projects for Completion from 2017
Singapore – Projects for Completion from 2017 GFA Estimated Project Units Pre-Sold (’000 sq. ft) Completion Date LakeVille 699 674 2017 99% Sol Acres 1,327 1,240 2018 44% Lake Grande 710 537 2019 77% Not yet Margaret Drive 316 238 2020 launched TOTAL 3,052 2,689 29 2016 Results
Slide 31: Indonesia
Indonesia Nava Park, Greater Jakarta (49%-owned) Estimated No. of Pre-Sold GFA % of Units Completion Units % of Units (’000 sq. m.) Construction Date Launched Launched Under development Villas and Landed Housing - Lancewood 223 61 2017 96% 223 88% - Lakewood 130 46 2018 2% 45 36% Mid-rise Apartments
Slide 32: Indonesia
Indonesia Anandamaya Residences (40%-owned) • JV with Astra International • Site area: 1.6 ha • GFA: 116,000 sq. m. • 509 luxury apartments; 92% pre-sold • Completion: 2018 31 2016 Results
Slide 33: Indonesia
Indonesia Jakarta Garden City (25%-owned) • 50:50 JV between Modernland and Astra Land, of which HKL holds 50% • Site area: 69 ha • GFA: 940,000 sq. m. Jakarta Garden City • East of central Jakarta • Construction start: 2017 Background image from Google Earth 32 2016 Results
Slide 34: Philippines
Philippines Two Roxas Triangle (40%-owned) • JV with Ayala Land • Site area: 0.5 ha • GFA: 98,000 sq. m. • 182 units; 99% pre-sold • Completion: 2018 33 2016 Results
Slide 35: Philippines
Philippines Mandani Bay (40%-owned) • JV with Taft Property • Site area: 20 ha • GFA: 1.2 million sq. m. • Residential and commercial • Phase One: 1,226 units, 43% pre-sold • Completion: 2035 34 2016 Results
Slide 36: Thailand
Thailand S36, Bangkok (49%-owned) • JV with Singha Estate • Site area: 0.4 ha • GFA: 38,000 sq. m. • High-rise luxury condominium • 374 units • Construction start: Early 2018 35 2016 Results
Slide 37: Financial Results
Financial Results 36 2016 Results
Slide 38: Consolidated Profit and Loss Account (US$m)
Consolidated Profit and Loss Account (US$m) 2015 2016 1,932 Revenue 1,994 (938) Net operating costs (1,023) 994 Operating profit 971 141 Share of results of joint ventures 117 (74) Net financing charges (69) (151) Tax (168) (5) Non-controlling interests (3) 905 Underlying profit 848 1,107 Non-tradin
Slide 39: Revenue (US$m)
Revenue (US$m) 2015 2016 973 Commercial revenue 986 959 Residential revenue 1,008 1,932 Total 1,994 38 2016 Results
Slide 40: Underlying Profit by Business (US$m)
Underlying Profit by Business (US$m) 2015 2016 940 Commercial property 946 354 Residential property 293 (60) Corporate expenses (62) 1,234 1,177 (107) Net financing charges (102) (209) Tax (214) (13) Non-controlling interests (13) 905 Underlying profit 848 39 2016 Results
Slide 41: Commercial Property Underlying Profit (US$m)
Commercial Property Underlying Profit (US$m) 2015 2016 Greater China 784 - Hong Kong 794 16 - Mainland China & Macau 11 Southeast Asia & Others 118 - Singapore 120 22 - Others 21 940 Total 946 40 2016 Results
Slide 42: Residential Property Underlying Profit (US$m)
Residential Property Underlying Profit (US$m) 2015 2016 Greater China 57 - Hong Kong - 171 - Mainland China & Macau 170 Southeast Asia & Others 127 - Singapore 120 (1) - Others 3 354 Total 293 41 2016 Results
Slide 43: Consolidated Cash Flow (US$m)
Consolidated Cash Flow (US$m) 2015 2016 896 Operating activities 1,096 (146) Investing activities (245) (796) Financing activities (442) (46) Net cash inflow/(outflow) 409 1,659 Cash and cash equivalents at beginning of year 1,566 (47) Effect of exchange rate changes (77) 1,566 Cash and cash equival
Slide 44: Operating Activities (US$m)
Operating Activities (US$m) 2015 2016 994 Operating profit excluding non-trading items 971 (78) Net interest paid (75) (175) Tax paid (141) (281) Payments for residential sites (79) (407) Development expenditure on residential projects (336) 1,079 Proceeds from residential sales 953 117 Dividends re
Slide 45: Investing Activities (US$m)
Investing Activities (US$m) 2015 2016 (58) Major renovations capex (92) (256) Funding of joint ventures (104) 391 Advances and loan repayments from joint ventures 103 (152) Development expenditure (148) (71) Payment of deposit for a joint venture (4) (146) (245) 44 2016 Results
Slide 46: Financing Activities (US$m)
Financing Activities (US$m) 2015 2016 (445) Dividends paid by the Company (444) (4) Dividends paid to minority shareholders (4) (347) Net drawdown/(repayment) of borrowings 26 - Change in interests in subsidiaries (20) (796) (442) 45 2016 Results
Slide 47: Consolidated Balance Sheet (US$m)
Consolidated Balance Sheet (US$m) 2015 2016 Investment properties 24,957 - Subsidiaries 27,712 4,296 - Joint ventures 4,180 29,253 31,892 Properties held for sale 2,714 - Subsidiaries 2,218 1,771 - Joint ventures 1,835 4,485 4,053 (2,677) Others (2,623) 31,061 Gross assets (excluding cash) 33,322 Fi
Slide 48: Investment Property – Basis of Valuation
Investment Property – Basis of Valuation Capitalisation Rates 2015 1H 2016 2016 Hong Kong Office - Exchange Square 1 & 2 3.75% 3.60% 3.50% Hong Kong Retail - Landmark Atrium 4.50% 4.50% 4.50% Singapore Office - MBFC 3.75% 3.50% 3.50% Note: These capitalisation rates are provided on an indicative bas
Slide 49: Investment Property – Carrying Values (US$m)
Investment Property – Carrying Values (US$m) 2015 2016 Greater China 23,671 - Hong Kong 26,381 1,532 - Mainland China & Macau 1,513 Southeast Asia & Others 3,428 - Singapore 3,351 622 - Others 647 29,253 Total 31,892 Note: The analysis includes share of Joint Ventures & Associates. 48 2016 Results
Slide 50: Properties Held for Sale – Carrying Values (US$m)
Properties Held for Sale – Carrying Values (US$m) 2015 2016 Greater China 18 - Hong Kong 18 2,766 - Mainland China & Macau 2,570 Southeast Asia & Others 1,528 - Singapore 1,250 173 - Others 215 4,485 4,053 (1,187) Pre-sale proceeds (1,637) 3,298 Net investment 2,416 Note: The analysis includes share
Slide 51: Gross Assets at 31st Dec 2016
Gross Assets at 31st Dec 2016 By Activity By Location Hong Kong 78% Commercial 91% Mainland China and Macau 9% Residential 9% Southeast Asia 13% 50 2016 Results
Slide 52: Treasury Management
Treasury Management Summary 2015 2016 Net debt (US$m) 2,341 2,008 Gearing 8% 6% Average tenor of debt (years) 7.2 6.4 Average interest cost 3.3% 3.4% Credit ratings -S&P A A - Moody’s A3 A3 51 2016 Results
Slide 53: Maturity Profile of Committed Facilities/Bonds (US$m)
Maturity Profile of Committed Facilities/Bonds (US$m) US$m Bank Facilities (Drawn & Undrawn) Bonds* 3,500 3,000 $2,836m 2,500 2,000 1,500 $1,086m 1,000 $882m $756m $663m 500 $294m 0 2017 2018 2019 2020 2021 2022+ * Includes bonds and notes issued under MTN Programme which are at face value. 52 2016
Slide 54: Liquidity at 31st Dec 2016
Liquidity at 31st Dec 2016 (All figures in US$bn) 1 2 2015 HK$ S$ US$ RMB Total 6.4 Committed lines 4.7 1.4 - 0.4 6.5 3.9 Gross debt 3.3 0.4 - 0.2 3.9 2.5 Available lines 1.4 1.0 - 0.2 2.6 1.6 Cash - 0.2 0.7 1.0 1.9 4.1 Available liquidity 1.4 1.2 0.7 1.2 4.5 Notes: (1) HK$ debt includes US$ debt sw
Slide 55: Outlook
Outlook • Stable performance from commercial property portfolio • Higher contribution in our residential business from mainland China, offset by lower profits from Singapore • Continue to seek expansion opportunities in mainland China and Southeast Asia 54 2016 Results
Slide 56: Thank you
Thank you Hongkong Land www.hkland.com
Hongkong Land Holdings — FY2016 Earnings Presentation on 6ix