Hongkong Land Holdings Limited · SGX:H78

Hongkong Land — H1 2020 Earnings Presentation

44 slides from Hongkong Land's earnings presentation, Jul 30, 2020

  1. Slide 1: 2020 Half-Year Results

    2020 Half-Year Results Presentation 30 July 2020

  2. Slide 2: Agenda

    Agenda Speakers: Robert Wong, Chief Executive & Simon Dixon, Chief Financial Officer 1. 2020 Half-Year Highlights 2. Investment Properties 3. Development Properties 4. Financial Highlights 5. Outlook 6. Q&A 2020 Half-Year Results 2

  3. Slide 3: 2020 Half-Year Highlights

    2020 Half-Year Highlights US$353m US$36.0bn Underlying profit 610 Shareholders’ funds 39 38 36 -24% YoY -6% HoH 466 353 1H 2019 2H 2019 1H 2020 Jun 2019 Dec 2019 Jun 2020 Key figures Highlights  Profit / (Loss)1: US$(1,828)m (1H 2019: US$411m)  Underlying profit down 24% due to retail rent relief

  4. Slide 4: Investment Properties

    Investment Properties 2020 Half-Year Results 4

  5. Slide 5: Completed Investment Properties Overview

    Completed Investment Properties Overview Completed Investment Properties are primarily located in Hong Kong and Singapore TOTAL COMPLETED AREA (HKL’s share) (000’s sq. ft NFA) 83 249 4,868 528 TOTAL TOTAL TOTAL TOTAL HANOI MACAU HONG KONG BEIJING 75 98 4,143 389 8 151 582 143 139 9,386* TOTAL 91 258

  6. Slide 6: Hong Kong Portfolio – Office

    Hong Kong Portfolio – Office Resilient performance with positive rental reversions AVERAGE RENTS & VACANCY 1H 2019 2H 2019 1H 2020 11% 1% Average net rent 116 119 121 2% (HK$ psf/month) 6% Period-end vacancy 2.8% 2.9% 5.0% Weighted average lease expiry 42% 4.6 4.7 4.5 OFFICE (years) TENANT 8% PROFIL

  7. Slide 7: Hong Kong Portfolio – Retail

    Hong Kong Portfolio – Retail Performance impacted by temporary rent relief and a decline in turnover rent 14% AVERAGE RENTS & VACANCY 6% 1H 2019 2H 2019 1H 2020 RETAIL Average net rent 239 205 151 TENANT 48% (HK$ psf/month) PROFILE BY AREA Period-end vacancy 0.7% 0.3% 0.4% 32% Weighted average lease

  8. Slide 8: Singapore Portfolio – Office

    Singapore Portfolio – Office Positive rental reversions and low vacancy AVERAGE RENTS & VACANCY 7% 1H 2019 2H 2019 1H 2020 3% Average gross rent 5% 9.6 9.7 9.9 (S$ psf/month) 6% Period-end vacancy 3.3% 5.0% 1.5% Weighted average lease expiry 3.6 4.4 4.0 OFFICE (years) 7% TENANT PROFILE EXPIRATION &

  9. Slide 9: Rest of Asia Portfolio

    Rest of Asia Portfolio Performance within revised expectations CHINESE MAINLAND SOUTHEAST ASIA Beijing – WF CENTRAL (84%-owned) Jakarta – Jakarta Land (50%-owned)  43,000 sq. m. NFA of retail space  Existing portfolio features 210,000 sq. m. NFA (Office: 193,000 sq. m.; retail: 17,000 sq. m.)  Oc

  10. Slide 10: West Bund

    West Bund Strategic partnership conditionally agreed West Bund site Longhua Middle Road Station Shanghai – West Bund site, Xuhui District  Total developable GFA: c.1.1 million sq. m. (including  For sale(*): Office (20%) & residential (2%) 60,000 sq. m. of underground retail)  Land premium settle

  11. Slide 11: Development Properties

    Development Properties 2020 Half-Year Results 11

  12. Slide 12: Development Properties Overview

    Development Properties Overview HKL’s Development Properties portfolio primarily spans seven countries and 14 cities, with a key focus on the Chinese Mainland and in Singapore TOTAL AREA UNDER CONSTRUCTION / TO BE DEVELOPED (HKL’s share) 2,986 (000’s sq. m. GFA) TOTAL CHINESE MAINLAND 341 TOTAL 21 5

  13. Slide 13: Chinese Mainland Portfolio – Overview

    Chinese Mainland Portfolio – Overview CHONGQING WUHAN BEIJING  11 projects  Two projects  Two projects  Total GFA 5.8 million sq. m.  Total GFA 720,000 sq. m.  Total GFA 456,000 sq. m. (HKL’s share: 4.1 million sq. m.) (HKL’s share: 396,000 sq. m.) (HKL’s share: 170,000 sq. m.) CHENGDU SHANGHA

  14. Slide 14: Chinese Mainland Portfolio

    Chinese Mainland Portfolio Lower contracted sales due to delays in planned sales launches REVENUE RECOGNISED*# CONTRACTED SALES# SOLD BUT UNRECOGNISED SALES# Chongqing Chengdu Sales to be recognised after next 6 months US$m Chongqing Chengdu Shanghai US$m US$m Nanjing Other Cities Sales to be recogn

  15. Slide 15: Singapore Portfolio – Overview

    Singapore Portfolio – Overview IMAGE TO BE UPDATED PARC ESTA  1,404 units  98,000 sq. m. GFA  Completion: 2021  76% pre-sold LEEDON GREEN  50% JV with Yanlord  638 units  49,000 sq. m. GFA  Completion: 2023  5% pre-sold MARGARET VILLE  309 units  22,000 sq. m. GFA  Completion: 2021  92%

  16. Slide 16: Singapore Portfolio

    Singapore Portfolio 1H 2020 contracted sales benefited from the launch of Leedon Green REVENUE RECOGNISED CONTRACTED SALES SOLD BUT UNRECOGNISED SALES Sales to be recognised after next 6 months Lake Grande Margaret Ville Parc Esta Margaret Ville Parc Esta Leedon Green Sales to be recognised within n

  17. Slide 17: Rest of Asia Portfolio

    Rest of Asia Portfolio Market sentiment subdued INDONESIA THE PHILIPPINES THAILAND Nava Park (49%-owned) Mandani Bay (40%-owned) The ESSE Sukhumvit 36 (49%-owned)  Site area: 68 ha; GFA: 730,000 sq. m.  Site area: 20 ha; GFA: 1.2 million sq. m.  Site area: 0.4 ha; GFA: 38,000 sq. m.  889 units l

  18. Slide 18: Financial Highlights

    Financial Highlights 2020 Half-Year Results 18

  19. Slide 19: Consolidated Profit and Loss Account

    Consolidated Profit and Loss Account Underlying profit of US$353 million, down 24% year-on-year FY2019 (US$m) 1H 2020 1H 2019 %YoY 2,320 Revenue 820 804 2 (1,150) Net operating costs (389) (334) 16 1,170 Operating profit 431 470 -8 273 Share of results of joint ventures 45 127 -65 (121) Net financin

  20. Slide 20: Movement in Underlying Profit

    Movement in Underlying Profit Decrease in underlying profit driven by fewer residential completions on the Chinese mainland and temporary retail rent relief US$m 800 600 $466m -$62m -$116m 400 +$65m $353m 200 0 Underlying profit 1H Investment Properties Development Net decrease in Underlying profit

  21. Slide 21: Operating Profit by Segment and Region

    Operating Profit by Segment and Region Hong Kong remains the largest profit contributor in 1H 2020 INVESTMENT PROPERTIES# DEVELOPMENT PROPERTIES# US$m 1H 2019 1H 2020 US$m 1H 2019 1H 2020 $800 $250 $700 $193m $200 $600 $555m $493m $500 $466m $150 $142m $425m $400 $100 $300 $77m $200 $50 $41m $37m $3

  22. Slide 22: Consolidated Cash Flow

    Consolidated Cash Flow Land premium for the West Bund site fully paid in 1H 2020 FY2019 (US$m) 1H 2020 1H 2019 %YoY 1,182 Operating activities 506 438 16 (658) Investing activities (2,151) (356) n/m (491) Financing activities 1,187 (316) n/m 33 Net cash inflow/(outflow) (458) (234) 96 1,369 Cash and

  23. Slide 23: Medium-Term Lease Assets

    Medium-Term Lease Assets MEDIUM-TERM LEASE ASSETS IN OPERATION 75% MEDIUM-TERM LEASE ASSETS Landmark Riverside, Chongqing LCM, Shanghai NET INVESTMENT • Retail NFA: 55,000 sq. m. • Retail NFA: 59,000 sq. m. $1,732M# (HKL’s share: 28,000 sq. m.) (HKL’s share: 30,000 sq. m.) • Opened in Sep 2016 • Ope

  24. Slide 24: Treasury Management

    Treasury Management Financial position remains strong with ample liquidity 31 DEC 2019 30 JUN 2020 MATURITY PROFILE OF DEBT AT 30 JUN 2020 Net debt (US$m) 3,591 5,628 US$m Bank debt drawn Bonds 4,000 $3,664m Net gearing 9% 16% 3,500 Average tenor of debt 3,000 6.1 6.2 (years) 2,500 Average interest

  25. Slide 25: Outlook

    Outlook 2020 Half-Year Results 25

  26. Slide 26: Outlook

    Outlook Uncertain market conditions INVESTMENT PROPERTIES DEVELOPMENT PROPERTIES FINANCIAL  Office portfolio is expected to  Higher sales completions on the  Net debt expected to decline remain resilient and to continue Chinese mainland and Southeast modestly in the absence of to generate stable

  27. Slide 27: Q&A

    Q&A 2020 Half-Year Results 27

  28. Slide 28: Appendix

    Appendix 2020 Half-Year Results 28

  29. Slide 29: Hong Kong Investment Properties Summary

    Hong Kong Investment Properties Summary HKL’s SHARE OFFICE RETAIL HOTEL TOTAL1 (’000 sq. ft NFA) One Exchange Square 570 - - 570 Two Exchange Square 508 - - 508 Three Exchange Square 321 - - 321 Exchange Square Podium - 49 - 49 The Forum 41 - - 41 Jardine House 635 45 - 680 Chater House 419 48 - 467

  30. Slide 30: Singapore Investment Properties Summary

    Singapore Investment Properties Summary HKL’s SHARE OFFICE RETAIL TOTAL (’000 sq. ft NFA) One Raffles Link 242 70 312 One Raffles Quay 440 1 441 MBFC 963 60 1,023 Total 1,645 131 1,7761 1 Equivalent to 165,000 sq. m. 2020 Half-Year Results 30

  31. Slide 31: Other Investment Properties Summary

    Other Investment Properties Summary HKL’s SHARE OFFICE RETAIL HOTEL TOTAL (’000 sq. ft NFA) Beijing - 389 139 528 Macau - 98 151 249 Jakarta 1,037 92 - 1,129 Hanoi 75 8 - 83 Bangkok 27 64 - 91 Phnom Penh 198 112 94 404 Others 42 - 216 258 Total 1,379 763 600 2,7421 1 Equivalent to 255,000 sq. m. 202

  32. Slide 32: Chinese Mainland Development Properties Summary (1)

    Chinese Mainland Development Properties Summary (1) HKL’s SHARE UNDER TO BE YEAR OF SITE AREA DEVELOPABLE AREA CONSTRUCTED PROJECT CITY INTEREST CONSTRUCTION DEVELOPED ACQUISITION (ha) (m sq. m.) (m sq. m.) (m sq. m.) (m sq. m.) Central Park Beijing 40% 2001 40.2 0.13 0.13 - - CBD Z3 Beijing 30% 201

  33. Slide 33: Chinese Mainland Development Properties Summary (2)

    Chinese Mainland Development Properties Summary (2) HKL’s SHARE UNDER TO BE YEAR OF SITE AREA DEVELOPABLE AREA CONSTRUCTED PROJECT CITY INTEREST CONSTRUCTION DEVELOPED ACQUISITION (ha) (m sq. m.) (m sq. m.) (m sq. m.) (m sq. m.) WE City Chengdu 50% 2010 19.0 0.46 0.31 0.04 0.11 Artisan Bay Chengdu 3

  34. Slide 34: Singapore Development Properties Summary

    Singapore Development Properties Summary HKL’s SHARE DEVELOPABLE UNDER TO BE YEAR OF SITE AREA CONSTRUCTED PROJECT INTEREST AREA CONSTRUCTION DEVELOPED ACQUISITION (ha) (m sq. m.) (m sq. m.) (m sq. m.) (m sq. m.) Margaret Ville 100% 2017 0.5 0.02 - 0.02 - Parc Esta 100% 2018 3.5 0.10 - 0.10 - Leedon

  35. Slide 35: Other Southeast Asia Development Properties Summary (1)

    Other Southeast Asia Development Properties Summary (1) HKL’s SHARE UNDER TO BE YEAR OF SITE AREA DEVELOPABLE AREA CONSTRUCTED PROJECT COUNTRY INTEREST CONSTRUCTION DEVELOPED ACQUISITION (ha) (m sq. m.) (m sq. m.) (m sq. m.) (m sq. m.) Nava Park Indonesia 49% 2012 67.5 0.36 0.06 0.02 0.28 Anandamaya

  36. Slide 36: Other Southeast Asia Development Properties Summary (2)

    Other Southeast Asia Development Properties Summary (2) HKL’s SHARE UNDER TO BE YEAR OF SITE AREA DEVELOPABLE AREA CONSTRUCTED PROJECT COUNTRY INTEREST CONSTRUCTION DEVELOPED ACQUISITION (ha) (m sq. m.) (m sq. m.) (m sq. m.) (m sq. m.) Two Roxas Triangle The Philippines 40% 1995 0.4 0.04 0.04 - - Ma

  37. Slide 37: Consolidated Cash Flow - Operating Activities

    Consolidated Cash Flow - Operating Activities FY2019 (US$m) 1H 2020 1H 2019 %YoY 1,170 Operating profit excluding non-trading items 431 470 -8 (145) Net interest paid (93) (71) 31 (116) Tax paid (154) (87) 77 (353) Payments for Development Properties sites (112) (65) 72 Development expenditure on De

  38. Slide 38: Consolidated Balance Sheet

    Consolidated Balance Sheet FY2019 (US$m) 1H 2020 1H 2019 %YoY Investment Properties 33,191 - Subsidiaries 35,836 33,816 6 4,629 - Joint ventures 4,368 4,857 -10 37,820 40,204 38,673 4 Development Properties* 2,490 - Subsidiaries 2,509 2,324 8 5,334 - Joint ventures 5,443 4,567 19 (1,538) - Pre-sale

  39. Slide 39: Gross Assets at 30 Jun 2020

    Gross Assets at 30 Jun 2020 13% 17% 12% GROSS ASSETS GROSS ASSETS BY ACTIVITY BY LOCATION 71% 87% Investment Properties Development Properties Hong Kong Southeast Asia Chinese Mainland and Macau 2020 Half-Year Results 39

  40. Slide 40: Investment Properties – Basis of Valuation

    Investment Properties – Basis of Valuation CAPITALISATION RATES 1H 2019 2H 2019 1H 2020 Hong Kong Office – Exchange Square 1 & 2 3.00% 3.00% 3.00% Hong Kong Retail – Landmark Atrium 4.50% 4.50% 4.50% Singapore Office – MBFC 3.25% 3.25% 3.25% 2020 Half-Year Results 40

  41. Slide 41: Completed Sales Gross Margin on the Chinese Mainland

    Development Properties – Completed Sales Gross Margin on the Chinese Mainland GROSS MARGIN % (BEFORE LAT) 50% 44% 41% 40% 40% 31% 30% 28% 20% 10% 0% 2016 2017 2018 2019 1H 2020 Note: The above analysis includes share of Joint Ventures & Associates. 2020 Half-Year Results 41

  42. Slide 42: Development Properties – Assets Held for Medium-Term Lease

    Development Properties – Assets Held for Medium-Term Lease ‘000 sq. m. 500 480 400 389 311 300 200 179 159 100 79 0 2020 2021 2022 2023 2024 2025 Existing NFA* Additional NFA* * HKL’s share. The above analysis excludes Central Park which has an attributable NFA of 9,000 sq. m. 2020 Half-Year Results

  43. Slide 43: Treasury Management

    Treasury Management LIQUIDITY AT 30 JUN 2020 (All figures in US$ billion) Liquidity at HK$1 S$ US$ RMB THB2 TOTAL 31 DEC 2019 Committed lines 6.8 6.3 1.1 0.0 0.9 0.0 8.3 Gross debt 5.0 4.9 0.6 0.0 0.7 0.3 6.5 Available lines 1.8 1.4 0.5 0.0 0.2 (0.3) 1.8 Cash 1.4 0.2 0.3 0.2 0.2 0 0.9 Available liqu

  44. Slide 44: Treasury Management

    Treasury Management DEBT MANAGEMENT AND HEDGING POLICIES AT 30 JUN 2020 % 100 THB 5% 90 RMB 11% 80 S$ 9% Floating 70 Banks 51% 54% 60 50 40 HK$ 30 75% Fixed Bonds 49% 20 46% 1 10 0 Type of Facilities Currency Interest Rate 2020 Half-Year Results 44

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