Hongkong Land Holdings Limited · SGX:H78
Hongkong Land — Investor Day (October 2024)
22 slides from Hongkong Land's investor day presentation, Oct 30, 2024
Slide 1: Hongkong Land Strategy Update
30 October 2024 Hongkong Land Strategy Update Hongkong Land Hongkong Land Strategy Update 30.10.2024
Slide 2: Disclaimer: Cautionary Statement
Disclaimer: CAUTIONARY STATEMENT Forward-looking statements Your accessing of this document indicates your understanding, agreement to and acceptance, of this disclaimer notice and the full terms and conditions contained herein. This document (including information incorporated by reference in this
Slide 3: Ambitions of our strategic review
Ambitions of our strategic review Top quartile shareholder Strategic return for sector clarity Capital management Leveraging HKL’s strengths transparency & heritage Hongkong Land Hongkong Land Strategy Update 30.10.2024 3
Slide 4: Scope of our strategic review
Scope of our strategic review Rigorous research Research & benchmarked areas +50 in-depth interviews with tenants & investors Macro-trends in Asia +10 sector expert interviews Real estate markets by geography & key sub-sectors Interviews w/ all Board members Benchmarking to peers HKL senior leadersh
Slide 5: Findings from strategic review
Findings from strategic review Clear competitive positioning Simplify business Capital recycling to accelerate Corporate governance in ultra-premium commercial to drive value growth properties Strength in commercial-led Lack of clear positioning Release capital to realise Strengthening sector expert
Slide 6: Strategic Vision to 2035
Strategic Vision to 2035 HKL’s aim is to become the leader in Asia’s gateway cities focused on ultra-premium integrated commercial properties New Investment: Simplify Portfolio: Portfolio Anchors: Ultra-premium integrated No new investments in standalone Central, Hong Kong investment properties "bui
Slide 7: Evolving our business model
EXECUTING OUR STRATEGY Evolving our business model Capital management Focus on returns on capital; excess capital returned to shareholders Portfolio recycling Ultra-premium gateway GATEWAY CITY PORTFOLIO assets Exit non-core businesses and vend mature assets into Develop/ acquire premium commercial
Slide 8: Future focused on world-class integrated ecosystems
ULTRA-PREMIUM GATEWAY ASSETS Future focused on world-class integrated ecosystems WHAT Ultra-premium office & luxury retail as core Premium office owned Gateway assets by HKL Office REIT Luxury hotels & residences MO partnership for hotel as key components of & branded residences Gateway offering Bui
Slide 9: Proven track record of curating ecosystems
ULTRA-PREMIUM GATEWAY ASSETS Proven track record of curating ecosystems Central, Hong Kong: Our heritage & showcase of a world-class ecosystem Marina Bay, Singapore: An iconic integrated portfolio West Bund, Shanghai: Anchoring our future with another world-class portfolio Hongkong Land Hongkong Lan
Slide 10: Use third party capital to support growth ambition and improve financial outcomes
THIRD PARTY CAPITAL Use third party capital to support growth ambition and improve financial outcomes Benefits of 3rd party capital What it will look like for HKL Provide funding to support growth Where 3rd party Development assets capital can be deployed Mature assets Build-up recurring income stre
Slide 11: Use third party capital to grow AuM to c.US$100bn
THIRD PARTY CAPITAL Third party AUM HKL balance sheet Use third party capital to grow AuM to c.US$100bn, c.60% of which represents third party capital Assets under management c.US$97bn 56% c.US$80bn c.US$41bn 52% 26% 44% 74% 48% 2023A 2030E 2035E Notes: AuM based on valuation of underlying asset on
Slide 12: Up to US$10bn to be recycled to fund growth
PORTFOLIO RECYCLING Up to US$10bn to be recycled to fund growth, with a greater share to be realised in the short- to medium-term Accumulated capital to be recycled c.US$6 – 8bn c.US$8 – 10bn c.US$4 - 6bn By 2027 By 2030 By 2035 12 Hongkong Land Hongkong Land Strategy Update 30.10.2024
Slide 13: Balance Sheet & Capital Management Principles
CAPITAL MANAGEMENT Balance Sheet & Capital Management Principles Gross assets excl. cash (at 30 June 2024) Development Properties Capital management principles US$7.7bn Investment Dividend pool is maintained, with pathway to growth Properties US$31.7bn US$35.8bn Capital recycling: Debt level is size
Slide 14: Capital allocation framework
CAPITAL MANAGEMENT Capital allocation framework Growth investments Recurring operating cash flow Net cash Maintain Remaining flow cash flow balance sheet Dividends strength and net debt Capital Recycled Share buyback Hongkong Land Hongkong Land Strategy Update 30.10.2024 14
Slide 15: Dividends & Share buyback
CAPITAL MANAGEMENT Dividends & Share buyback Dividends Aim to deliver mid-single digit annual growth in DPS Double DPS by 2035 Aim to pay out 60% - 80% of recurring income as dividends Share buyback Up to 20% of proceeds from capital recycled to US44¢ be invested in buyback of shares* Mid-single dig
Slide 16: Recurring earnings to double by 2035
FINANCIALS New investments & Management fee income Recurring earnings to double by 2035 Existing IP assets & secured pipeline Recurring earnings1 c.US$2.2bn 37% c.US$1.4bn c.US$1bn 15% 63% 85% 100% 2023A 2030E 2035E Notes: (1) Recurring earnings represents underlying PBIT and excludes DP contributio
Slide 17: Greater recurring income from high-quality commercial assets & management fees
FINANCIALS Existing IP & secured pipeline DP Greater recurring income from high-quality New investments & management fees commercial assets & management fees Underlying PBIT mix 14% 8% 37% 31% 63% 78% 69% 2019-2023 average 2030E 2035E Notes: Underlying PBIT excl. corporate costs and includes share o
Slide 18: Enhancing corporate governance
CORPORATE GOVERNANCE Enhancing corporate governance Audit Progressive Board Simplifying Board structure Investment Committee improvements enhancement committee established Transition of Chairmanship to Appointment of three new INEDs Elimination of dual-Board structure Establishment of Investment INE
Slide 19: Organisational transformation & management alignment with shareholders
CORPORATE GOVERNANCE Organisational transformation & management alignment with shareholders Organisational structure & Creating best-in-class Executive Director Management alignment cultural transformation talent bench Shareholding Policy with shareholders Changing organisational New Chief Investmen
Slide 20: Phases for execution
TIMELINE Phases for execution 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Capital recycling, capability building, assessments on potential gateway entries First stage growth, opportunity sourcing, partnership & third party capital sourcing, capital recycling New business model in place, s
Slide 21: Achieving our ambitions: Key focus areas
A NEW AND BETTER HKL Achieving our ambitions: Key focus areas Reinforce & secure our core Secure asset value and earnings of core assets in Hong Kong, Singapore and Chinese Mainland via enhancements Reshape our portfolio Drive growth via gateway assets, with progressively recycling capital from buil
Slide 22: Established 1889
Established 1889