Swire Properties Limited · HKEX:1972

Swire Properties — H1 2017 Earnings Presentation

45 slides from Swire Properties's earnings presentation, Aug 17, 2017

1. Slide 1: 2017 Interim Results | Analyst Briefing

   2017 Interim Results | Analyst Briefing 17th August 2017 © Swire Properties Limited 太古地產有限公司

2. Slide 2: Agenda

   Agenda Speakers : Guy Bradley, Chief Executive and Michelle Low, Finance Director 1. Financial Highlights 2. Investment Portfolio 3. Trading Portfolio 4. Financing 5. Prospects 6. Q&A

3. Slide 3: Financial Highlights

   Financial Highlights DE4@ SWiRE PROPERTIES

4. Slide 4: Financial Highlights

   Financial Highlights Underlying Profit Key Figures HK$ 4,628 M 30% HK$ 40.71 per share (2016 Dec: HK$ 38.52 per share) HK$ 14,763 M (1H 2016: HK$ 5,334 M) HK$ 0.25 (2016 1st interim : HK$ 0.23) Adjusted Underlying Profit 7,307 Equity Attributable Reported Profit 2017 1st Interim 7,078 7,112 to Share

5. Slide 5: Financial Summary

   Financial Summary HK$M 1H 2016 1H 2017 Change Revenue 7,886 11,525 46% Valuation gains on investment properties 2,307 9,946 331% Operating profit 6,730 15,537 131% Underlying profit 3,559 4,628 30% Reported profit 5,334 14,763 177% Underlying earnings per share (HK$ per share) 0.61 0.79 30% Reported

6. Slide 6: Movement in Underlying Profit

   Movement in Underlying Profit Earnings Reconciliation Movement in Underlying Profit Underlying Profit by Segment HK$’M 1H 2016 1H 2017 Change + 729 + 33 4,628 Property investment 3,111 3,418 10% Property trading 492 1,221 148% Hotels (44) (11) N/A Total 3,559 4,628 30% + 129 + 178 HK$ 4,628 M, 30% 3

7. Slide 7: Movement in Investment Properties

   Movement in Investment Properties Movement in Investment Properties The increase in the valuation of (excl. Hotels & Investment Properties held under JVCs) the investment property portfolio HK$’M is mainly due to an increase in the 248,338 valuation of the office properties + 9,946 in Hong Kong foll

8. Slide 8: Investment Portfolio

   Investment Portfolio DE4@ SWiRE PROPERTIES

9. Slide 9: Rental Income – Continued to Rise

   Rental Income – Continued to Rise HK Office 10,320 Stable Attributable Gross Rental Income  Firm rental income despite Taikoo Place HK$’M redevelopment. HK$ 6,182 M, 6%  Positive rental reversions supported by strong demand for office space.  High occupancy at 99%. 11,564 11,729 HK Retail  Stabl

10. Slide 10: HK Office – Robust Operations

    HK Office – Robust Operations Pacific Place TKP office towers One Island East Cityplaza 2.2M sq ft GFA 3.1M sq ft GFA 1.5M sq ft GFA 1.4M sq ft GFA Latest Rental 1PP/2PP : 110-135 low 40s to high 40s mid 50s to high 60s mid 40s to high 40s 3PP : 95-110 Occupancy 100% 100% 98% 99% Rental Reversion(1)

11. Slide 11: HK Retail – Some Recovery in Retail Sales

    HK Retail – Some Recovery in Retail Sales The Mall, Pacific Place Cityplaza Citygate Outlets 0.7M sq ft GFA 1.1M sq ft GFA 0.5M sq ft GFA Occupancy 100% 100% 100% Retail Sales Growth +1.5% -7.3% +0.9% (1) Highlights HK$ 46.5 bn 2.8 M sq ft HK$ 1,348 M 100 % Attributable Completed GFA Attributable Oc

12. Slide 12: HK Portfolio – Well-balanced Tenant Mix and Lease Expiries

    HK Portfolio – Well-balanced Tenant Mix and Lease Expiries Lease Expiry Profile (1)(2) HK Office HK Retail  Strong and diverse tenant base.  Well-spread lease expiry profile.  Top 10 office tenants occupied approx. 21% of office area in HK.  Top 10 retail tenants occupied approx. 26% of retail a

13. Slide 13: Hong Kong Portfolio – A Strong Development Pipeline

    Hong Kong Portfolio – A Strong Development Pipeline Expected Attributable GFA of Completed Property Portfolio in Hong Kong (1)(2) GFA (‘000 sq ft) 15.1 M sq ft Exp. Attributable 18% 15,168 Completed GFA (1) (Investment Props) Two Taikoo Place (3) 14,168 14,168 14,168 One Taikoo Place Tung Chung (TCT

14. Slide 14: Taikoo Place Redevelopment in Progress

    Taikoo Place Redevelopment in Progress To transform the Taikoo Place into a more connected, people-friendly commercial centre with 69,000 sq ft of new open public spaces and 2 million sqft of new Grade A office space. Taikoo Taikoo Place Redevelopment Place Redevelopment Location Quarry Bay Interest

15. Slide 15: Other Hong Kong Projects Scheduled for Completion in 2018

    Other Hong Kong Projects Scheduled for Completion in 2018 Artist Impression Artist Impression 8-10 Wong Chuk Hang Road Tung Chung Town Lot 11 New Kowloon Inland Lot 6312 Location Aberdeen Tung Chung Kowloon Bay Interest 50% 20% Conditionally agreed to sell the company which owns the investment prope

16. Slide 16: Mainland China Portfolio – Strong Growth in Retail Sales

    Mainland China Portfolio – Strong Growth in Retail Sales Attributable GFA of Completed Property Portfolio in Mainland China (1)(2)(3) GFA HKRI Taikoo Hui (‘000 sq ft) HK$ 45.1 bn 8.8 M sq ft  Completed – Shopping mall and offices. Attributable Valuation Exp. Attributable  Works in progress – Hotel

17. Slide 17: Mainland China Portfolio – Growing Rental Contributions

    Mainland China Portfolio – Growing Rental Contributions Attributable Gross Rental Income Potential Pipeline HK$’M Attributable Gross Rental Income almost doubled since 2012 Qiantan Project, Shanghai  Framework Agreement signed.  Retail development 2,614 2,463 HK$ 1,531M, 19% RMB 1,349M, 24% 2,153

18. Slide 18: HKRI Taikoo Hui, Shanghai – Open

    HKRI Taikoo Hui, Shanghai – Open  The latest joint venture development opening in Mainland China.  Shopping Mall (Opened in May 17) : 91% leased (1), 40% Shops opened  Offices (Opened in phases from 2H 2016) : 75% leased (1)  Hotels expected to open by the end of 2017. Artist Impression One BCC

19. Slide 19: Brickell City Centre, Miami – Ramping up

    Brickell City Centre, Miami – Ramping up  Shopping Centre: 88% occupancy, opened in Nov 2016.  Three BCC office: 100% occupancy, opened in Mar 2016.  Two BCC office: 75% occupancy, opened in Feb 2017. Artist Impression Artist Impression One BCC 19 (1) Occupancy (including by way of letters of int

20. Slide 20: Trading Portfolio

    Trading Portfolio DE4@ SWiRE PROPERTIES

21. Slide 21: Trading Portfolio

    Trading Portfolio Hong Kong Brickell City Centre, Miami ALASSIO REACH All Sold ~92% or 360 units sold (1) (197 units pre-sold) mid US$ 600s psf Profit Recognised in (avg price) (2) 1H 2017. WHITESANDS RISE ~ 32% or 9 units sold (1) ~ 51% or 197 units sold (1) HK$ 20,397 psf high US$ 600s psf (avg pr

22. Slide 22: Financing

    Financing SWIRE PROPERTIES

23. Slide 23: Net Debt and Gearing

    Net Debt and Gearing Net Debt Reconciliation (HK$M) Gearing Net debt at 31st Dec 2016 (35,377) Net rental and fees receipts 37,058 4,591 35,430 Proceeds from property trading / development 4,539 Capex- PP&E and property investment (3,289) Development costs – property trading (340) Net investments in

24. Slide 24: Maturity Profile & Liquidity

    Maturity Profile & Liquidity Maturity Profile of Available Committed Facilities (at 30th Jun 2017) HK$M Dec 2016 Jun 2017 Total 46,627 654 7,826 4,702 5,702 7,905 11,305 200 900 1,740 4,603 1,090 Cash 1,681 1,589 Drawn 35,138 654 7,826 2,388 4,902 2,980 7,855 200 900 1,740 4,603 1,090 Undrawn - comm

25. Slide 25: Capital Commitments

    Capital Commitments Profile of Capital Commitments for Investment Properties and Hotels– at 30th Jun 2017 HK$’M Expenditure Forecast Year of Expenditure Commitments* Six months Six months 2018 2019 2020 & later At 30th Jun 2017 ended ended 30th Jun 2017 31st Dec 2017 Hong Kong 2,060 2,978 3,558 1,00

26. Slide 26: Prospects

    Prospects D4 SwirE PROPERTIES

27. Slide 27: Prospects

    Prospects Hong Kong Office Hong Kong Retail  In the central district of Hong Kong, high occupancy and  Retail sales started to improve in Hong Kong in 1H 2017. limited supply will continue to exert upward pressure on This has benefited our malls. We will continue to adjust office rents. the tenant

28. Slide 28: Sustainable Development

    Sustainable Development LEED Platinum certification for Existing UK CIBSE Building Performance Buildings: Operations and Maintenance (TaiKoo Awards 2017 Energy Management Initiative Award Hui, Guangzhou)- Global 1st enclosed shopping mall recognized “Organisation with the most BEAM Plus The Loop and

29. Slide 29: Swire Properties in Five Years

    Swire Properties in Five Years Expected Attributable GFA by Segment Expected Attributable GFA by Region Total Exp. Attri. GFA (Investment Props) GFA (‘000 sq ft) 18% GFA (‘000 sq ft) 18% to Complete 26,524 26,524 4.0 M sq ft N/A 22,504 (5%) 22,504 + 9% (4%) (10%) + 126% + 10% (9%) Total Exp. Attri.

30. Slide 30: DE4@ SWiRE PROPERTIES

    DE4@ SWiRE PROPERTIES

31. Slide 31: Appendix

    Appendix D4 SwiRE PROPERTIES

32. Slide 32: Property Portfolio

    Property Portfolio Investment Props / Hotels Office Retail Hotels(2) Resid./Serviced Under- Total Attributable Investment Props by Attributable GFA (M sq ft)(1) apartment Planning Region (GFA) Completed 10% Hong Kong 9.0 2.5 0.7 0.6 - 12.8 U.S.A. and Mainland China 2.9 4.5 1.0 0.1 - 8.5 Elsewhere 2.

33. Slide 33: Completed Investment Portfolio

    Completed Investment Portfolio Expected Attributable GFA of Completed Investment Portfolio (incl. Hotels) (1)(2)(3) GFA (‘000 sq ft) 22,144 22,504 22,774 24,080 24,080 24,080 25,080 25,080 26,524 Brickell City Centre HKRI Taikoo Hui, Tung Chung (TCTL 11) (20%) Two Taikoo Place (3) One Brickell City

34. Slide 34: Revenue Analysis

    Revenue Analysis 1H 2017 Revenue Breakdown by Segment 1H 2017 Revenue Breakdown by Region HK$’M HK$’M 3,895 23.2% 11,525 11,525 10,514 HK$’M 2,383 HK$’M 62.6% 14.2% Comparison Comparison 1H 2016 1H 2017 1H 2016 1H 2017 Rental 5,367 5,555 HK 5,193 9,759 Trading 1,954 5,258 China 1,183 1,244 Hotels 50

35. Slide 35: HK Portfolio Map

    HK Portfolio Map Pacific Place Taikoo Place Cityplaza (1) The simplified maps are not to scale and are for illustrative purpose only. 35 (2) GFA figures are for reference only.

36. Slide 36: Taikoo Li Sanlitun, Beijing

    Taikoo Li Sanlitun, Beijing  Gross rental income at Taikoo Li Sanlitun increased in 1H 2017. Project Summary (100% Basis)  Overall occupancy at Taikoo Li Sanlitun was 95% at 30th Jun 2017. GFA 1.47 M sq ft  Retail sales grew by 7% in 1H 2017. Components TKL Sanlitun South TKL Sanlitun North  Dem

37. Slide 37: TaiKoo Hui, Guangzhou

    TaiKoo Hui, Guangzhou  TaiKoo Hui is our largest investment property in Mainland China. Project Summary (100% Basis)  Gross rental income at TaiKoo Hui in Guangzhou increased in 1H 2017, reflecting in GFA 3.84 M sq ft part improvements to the tenant mix and a customer loyalty programme. Components

38. Slide 38: INDIGO, Beijing

    INDIGO, Beijing  Occupancy at the shopping mall was 99% at 30th Jun 2017. Project Summary (100% Basis)  Retail sales increased by 69% in 1H 2017. GFA 1.89 M sq ft  Improvements to the tenant mix were made. The mall is becoming a significant quality Components Shopping Mall family shopping centre

39. Slide 39: Sino-Ocean Taikoo Li Chengdu

    Sino-Ocean Taikoo Li Chengdu Artist’s Impression Artist’s Impression Artist’s Impression Artist’s Artist’s Impression Impression Artist’s Impression Artist’s Impression Artist’s Impression  Occupancy at the shopping mall was 94% at 30th Jun 2017. Project Summary (100% Basis)  Gross rental income a

40. Slide 40: HKRI Taikoo Hui, Shanghai

    HKRI Taikoo Hui, Shanghai Artist Impression Artist’s Impression  A large-scale retail-led mixed-use development comprising a retail mall, two office Project Summary (100% Basis) towers, two hotels and a serviced apartment tower. It is expected to become a GFA 3.47 M sq ft landmark development in Sh

41. Slide 41: Brickell City Centre, Miami

    Brickell City Centre, Miami Future Residential Development 523,000 sf Artist Impression Artist Impression Future Mixed-use Development 1,444,000 sf Artist Impression Artist Impression Project Summary (100% Basis)  The development was completed in 2016. Three Brickell City Centre, EAST, Miami GFA 1.

42. Slide 42: Trading Portfolio

    Trading Portfolio Trading Properties Sold or Being Total Unit Actual Actual Units for which Profit Recognised or Interest Sold Units Sold Completion Handover Expected to be Recognised (Year) (At 15th August 2017) (from) Hong Kong ALASSIO 197 197 2016 2017 - 197 (1H 2017) 100% - 1 (2015) , 1 (2016),

43. Slide 43: Hotel Portfolio

    Hotel Portfolio Managed Hotels No. of Interest Owned but Non-managed Hotels No. of Rooms Interest Rooms Completed (100% basis) Completed (100% basis) HK The Upper House 117 100% HK Island Shangri-La HK 565 20% HK EAST, Hong Kong 345 100% HK JW Marriott Hotel HK 602 20% HK Headland Hotel (1) 501 0% H

44. Slide 44: Valuation of Completed Investment Properties

    Valuation of Completed Investment Properties  Consistent value creation through continuous property investment and asset reinforcement. 2006 – Jun 2017 Valuation of Completed Investment Properties (excl. Hotels) * HK$ M Valuation of investment portfolio tripled in 11 years 248,338 235,101 228,449 *

45. Slide 45: Sustainable Development Strategy

    Sustainable Development Strategy Our new vision is to be the leading sustainable development performer in our industry globally by 2030. 45

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