Wharf Real Estate Investment Company Limited · HKEX:1997
Wharf Real Estate Investment — Wharf Real Estate Inv — FY2024 Earnings Presentation
31 slides from Wharf Real Estate Investment's earnings presentation, Mar 10, 2025
Slide 1: Top Line Challenges Remain Hard
Top Line Challenges Remain Hard Wharf Real Estate Investment Company Limited 2024 Final Results | 10 Mar 2025
Slide 2: Results Highlights
Results Highlights ▪ Revenue Slipped by 3% ▪ Continuing Deleveraging to 18% Reduced Borrowing Cost by 10% ▪ Total Value of IP Declined by 3% OVERVIEW Wharf Real Estate Investment Company Limited | 2024 Final Results | 2
Slide 3: Financial Market Dynamics
Financial Market Dynamics ▪ Continued Strength of HKD Makes HK Less Competitive; HKDCNY & HKDJPY Hit Decade-High in 2024 ▪ US Rate Cuts Rather Gradual ▪ Shaking Business & Consumer Confidence amid Uncertain Macro Outlook Average of HKDCNY Average of JPYHKD (x100) Average of 3-Month HIBOR (%) 0.94 0.
Slide 4: Recovery Faces More Challenges
Recovery Faces More Challenges ▪ Incomplete & Uneven Recovery: ML Tourists Returned Slowly; SE Asians Recovering Better ▪ Consumption Downgrade in Key Markets & Local Outbound Leakage ▪ Adapting to Shifting Consumption & Travel Patterns; Multiple Supportive Policies, Pending Effects HK Visitor Arriv
Slide 5: HKIP Still Cautious
HKIP Still Cautious HKIP Revenue Breakdown 2024: $10.5B (-1%) HK$ Billion 14 ▪ Retail: Weaker HK Retail Sales Dragged Rent 12 0.2 0.2 0.2 0.2 0.2 – Vacancies Remained Modest but Reversion 10 3.7 3.4 3.1 3.1 Challenging 3.4 8 S.A. 6 Office ▪ Office Rent Weak, Partly Offset by Better Occupancies Retai
Slide 6: $4.6B Capex Since 2017
$4.6B Capex Since 2017 Selected Alterations & Additions: 2017 Ocean Terminal Extension (HC) 270ºObservatory Deck Harbour-view Alfresco Dining Hampton Court Conversion (HC) New Cruise Passenger Halls 360,000 s.f Office from S.A. Canton Road Frontage (HC) Strategic Realignment of 16 Best-in-class Bran
Slide 7: Malls: Constantly Enhancing Brand Value
Malls: Constantly Enhancing Brand Value ▪ Expanded Flagships & Stores’ New Images ▪ Diverse Crowd-drawing Initiatives for All Demographics ▪ Improved In-store Experiences to Boost Loyalty ▪ Intelligent Marketing Spend to Protect Margin Proactive Brand Portfolio Management Footfall Stimulating Initia
Slide 8: Office: Improved Occupancies
Office: Improved Occupancies Office Occupancies* 100% ▪ Prime Location & Unique Positioning 95% – HC/ TS: Drawing Power from Mixed-used Complex 90% 85% 97% 95% – CH/ WH: Strong Foothold in Central 90% 90% 91% 80% 88% 87% 84% 86% 87% ▪ Proactive Leasing Strategies & Premises Improvement Attracting In
Slide 9: Financial Highlights
Financial Highlights HK$M 2024 2023 YoY Chg Group Revenue 12,912 13,306 -3% - HKIP & Hotel 11,894 12,020 -1% Operating Profit 9,691 9,993 -3% - HKIP & Hotel 8,991 9,228 -3% ▪ Core UNP Declined by 3% but Group UNP Supported Underlying Net Profit (UNP)* 6,139 6,011 +2% by Non-Core Improvement & Lower
Slide 10: Sound Financial Health
Sound Financial Health ▪ Interest Cost 5.6% p.a. ▪ 80% on Floating ▪ Net Debt $34.2B (-$17.8B Since Dec-20, Equivalent to ▪ Interest Cover 4.7x Saving ~$1B Interest Per Year) ▪ Maintains Moody’s A2 Rating (Stable Outlook) Net Debt (HK$ Billion) Debt Maturity (HK$ Billion) 52.0 Total Gross Debt: $35.
Slide 11: Harbour City
HARBOUR CITY
Slide 12: Resilience in Adversity
Resilience in Adversity HC Revenue Breakdown 2024: $9.1B (+2%) HK$ Billion Occupancy*: 12 Retail 94% 10 Office 90% ▪ Critical Mass & Location Foster Stable Demand 0.2 0.2 0.2 0.2 8 0.4 0.2 0.4 0.5 1.0 1.0 ▪ Rents Under Pressure amid Cautious Sentiment S.A. 2.7 2.3 2.3 6 2.4 2.5 Hotel Office ▪ Strate
Slide 13: Sustainable Tenant Demand
Sustainable Tenant Demand HC Retail Rental Category Breakdown Strategic Expansion & Relocation (Selected Brands) 2024: $5.0B (+2%) (BEAUTÉ) (Beauty) F&B & Ent. New Retail & F&B Entrants 6% Fashion (1st Café-retail) (Kowloon debut) (HK debut) Dept. Store 5% Lifestyle & Kids (HK debut) Sports- Fashion
Slide 14: Times Square
TIMES SQUARE
Slide 15: Steady Occupancies Despite Competition
Steady Occupancies Despite Competition TS Revenue Breakdown 2024: $1.7B (-6%) HK$ Billion 2.5 ▪ Louis Vuitton Re-opened, Loewe to Expand Occupancy*: Retail 93% 2.0 Office 90% ▪ Enriching Experiential Retailing & F&B 0.7 0.7 1.5 0.7 0.6 ▪ Safeguarding Office Occupancy amid New Supply 0.6 Office 1.0 R
Slide 16: Hotels
HOTELS
Slide 17: The Murray & Marco Polo Hotels
The Murray & Marco Polo Hotels The Murray, Hong Kong Prince Hotel ▪ Good Occupancies Offset by Softer Room Rates ▪ Rising Costs & Price-sensitive Customers ▪ Cross-hotel Rewards Programme & Featured Offers to Drive Repeat Visits ▪ Full-year Contribution from Prince Hotel (Re-opened in Aug 23) Enrich
Slide 18: Outlook
OUTLOOK
Slide 19: Full Recovery Still Uncertain
Full Recovery Still Uncertain ▪ Looming Trade War Top of People’s Mind ▪ Visitor Spending & Local Consumption Sentiment Still Weak ▪ Renewed Interest Rate Concern Adding Risks to Economic Growth & Borrowing Costs ▪ Currency Fluctuation a Profound Uncertainty with No Signs of Dissipating ▪ Office Awa
Slide 20: Sustainability
SUSTAINABILITY
Slide 21: 2030 Targets On Track
2030 Targets On Track 2030 Targets* 2024 Performance Overall GHG Emissions Total General Refuse To Reduce 30% by 2030# Decreased by Over 20% (2019 Baseline) #Committed to Setting Near-term Targets According to Science Based Targets Initiative (“SBTi") Criteria. Upon which, New Carbon Reduction Targe
Slide 22: ESG Performances & Recognitions
ESG Performances & Recognitions Ratings & Awards ESG Certifications Times Square ISO certifications Hang Seng Corporate Sustainability Index (AA+ Rating) LEED Platinum - ISO 14001:2015 (v4.1 Operations and - ISO 45001:2018 Maintenance: Existing Buildings) Hang Seng ESG 50 Index - ISO 9001:2015 WELL
Slide 23: Environmental: Asset Enhancements & Renewable Energy
Environmental: Asset Enhancements & Renewable Energy Solar-powered Systems Electricity-free Cooling Technology ▪ 320 Solar Photovoltaic Panels Installed at HC ▪ Cooling Paint on Condenser Water Pipes to Lower Condenser to support RE development & FiT* Scheme Water Temperature ▪ 100 Sets of Solar The
Slide 24: Social: Community Contributions
Social: Community Contributions What We Supported Supports Youth Development via: Donation: ▪ Project WeCan Top 3-Donors Ranking ▪ The Wharf Art Scholarship Scheme For 4 Consecutive Years ▪ Architectural Design Internship Programme by The Community Chest* Volunteer Activities ▪ Organized Close to 30
Slide 25: People: Governance, Talent Development & Workplace Safety
People: Governance, Talent Development & Workplace Safety Composition of Board of Directorsof(12 Composition Board Board of Members Directors as (12ofBoard 30 Jun 24) Members as of 31 Dec 24) 2024 Meeting Attendance* Designation Directors with Executive Functions (33%) INED (67%) Age Gender <56 (8%)
Slide 26: Appendix
APPENDIX
Slide 27: HC/TS/PH Performance
HC/TS/PH Performance Harbour City Times Square Plaza Hollywood 2024 (HK$B) Retail 5.6 1.1 0.4 Office 2.3 0.6 - Hotels & Club 1.0 - - Serviced Apt. 0.2 - - Total Revenue 9.1 1.7 0.4 Valuation* as of 31 Dec 2024 159.5 43.7 8.2 2024 Avg. Retail Passing Rent 351 144 76 (HK$ psf per Month) *Incl. Hotels
Slide 28: Premium Quality Portfolio
Premium Quality Portfolio Revenue Valuation* GFA Harbour City Harbour City Harbour City 74.6% 68.3% 68.5% 2024 Revenue Valuation GFA $12.2B $234.5B 12.3M s.f Singapore Assets Singapore Times Square Times Square Singapore 2.8% Plaza Assets 18.6% 16.1% Assets Hollywood Central Times Square 3.1% Plaza
Slide 29: Overview of Application of Funds
Overview of Application of Funds Major Capital & Development Expenditure To be Incurred in Coming Years HK$M Incurred in 2024 Committed Uncommitted Total HKIP 132 65 507 572 Singapore IP 1 - - - Mainland Properties 63 142 133 275 Hotels & Others 21 20 - 20 Total 217 227 640 867 APPENDIX Wharf Real E
Slide 30: Thank You
Thank You Top Line Challenges Remain Hard
Slide 31: Disclaimer
Wharf Real Estate Investment Company Limited [HKEx Stock Code: 1997.HK] Disclaimer All information and data are provided for information purposes only. All opinions included herein constitute our judgment as of the date hereof and are subject to change without notice. The Group, its subsidiaries and