Kerry Properties Limited · HKEX:683
Kerry Properties — H1 2015 Earnings Presentation
38 slides from Kerry Properties's earnings presentation, Aug 20, 2015
Slide 1: 1H 2015 Interim Results Presentation
Kerry Properties LIMITED ie ER A OA 1H 2015 INTERIM RESULTS PRESENTATION 20th August 2015
Slide 2: Agenda
1. Results Highlights 2. Hong Kong Portfolio 3. PRC Portfolio 4. Financial Position 5. Appendix 2
Slide 3: 1. Results Highlights
1. Results Highlights eRRY Properties LiMiTED eee All
Slide 4: Results Highlights – Underlying profit +21% YoY
Results Highlights – Underlying profit +21% YoY HK$ million 1H 2015 1H 2014 Change Turnover 4,204 6,174 -32% Gross profit 2,158 3,234 -33% Share of results of associates 1,197 566 +111% Underlying profit 2,182 1,804 +21% Net increase in fair value in investment properties 607 586 +4% Reported profit
Slide 5: Results Highlights
Results Highlights In 1H 2015, 1. Total contracted sales $5.0B ( HK $2.4B ; PRC $2.6B ) 2. PRC flagships’ occupancy for office and commercial at over 95% as of Jun 30, 2015 3. PRC property rental gross profit margin rose to 86% (79% as at Jun 30, 2014) 4. Total rental revenue of JingAn Ph 1 & 2, exc
Slide 6: Results Highlights – Recurrent revenue +21% YoY
Results Highlights – Recurrent revenue +21% YoY HK$ million Turnover Gross Profit Gross Margin 1H 2015 1H 2014 Change 1H 2015 1H 2014 Change 1H 2015 1H 2014 Property sales 1,739 4,140 -58% 615 2,034 -70% 35% 49% HK N1 1,304 3,437 -62% 552 1,782 -69% 42% 52% PRC N2 435 703 -38% 63 252 -75% 14% 36% Pr
Slide 7: 2. Hong Kong Portfolio
2. Hong Kong Portfolio Kerry Properties Lien RRRRARAA
Slide 8: HK Property Sales Overview
HK Property Sales Overview 1H 2015 Overview Contracted Sales $2.4B Saleable Area Sold Approx. 92,000 s.f Key Properties Sold Dragons Range ($1.1B*), One & Three Ede Road ($0.8B), and 8 LaSalle ($0.2B) Subsidiaries: $1.3B, mainly contributed by 1 & 3 Ede Road ($0.8B) and 8 LaSalle ($0.3B) Total Recog
Slide 9: HK Property Sales – 2015 Sales Performance
HK Property Sales – 2015 Sales Performance Sales momentum remained solid Existing projects: 1 & 3 Ede Road, Kowloon Tong Dragons Range, Kau To Shatin 8 LaSalle, Ho Man Tin KPL’s interest: 40% KPL’s interest: 100% New price level 82% Sold Total units: 973 41 units Total units: 56 1st launch: Nov-2014
Slide 10: HK Property Sales
HK Property Sales ~2,500 units in the upcoming pipeline with a total estimated proceeds of over $30B Target launch: Q4 2015 The Bloomsway, So Kwun Wat, Tuen Mun ( ~1,100 units, GFA 0.9M s.f ) 100% owned • Large-scale, low-density residential property • Located on Tsing Ying Road • Next to UK’s elite
Slide 11: Next major launch - The Bloomsway
Next major launch - The Bloomsway Easy access to the future Tuen Mun-Chek Lap Kok Link and HK-Macau-Zhuhai bridge Shenzhen Bao’an Int’l Airport Shenzhen Qianhai Shenzhen Bay Bridge (target launch in 2H 2015) HK-Shenzhen Western Corridor Route 3 Tuen Mun Chek Lap Kok Link * HK Port * HK Int’l Airport
Slide 12: HK Investment Properties – Steady cash flow
HK Investment Properties – Steady cash flow Mid-level portfolio, Gross rental revenue: Tregunter Path Drop in apartment rental revenue is due to renovation of Branksome Grande $483M • Tenancies of all 94 units were expired by Mar-2014 (includes attributable rental income from major property from ass
Slide 13: 3. PRC Portfolio
3. PRC Portfolio 13 Kerry Properties Lien RRRRARAA
Slide 14: PRC Major Completed Investment Properties Performance
PRC Major Completed Investment Properties Performance Flagships in first-tier cities - Yield on cost in mid-high teens - Occupancy over 95% for commercial & office Gross rental revenue: $1.4B Jing An Kerry Centre, Puxi Shanghai Beijing Kerry Centre, CBD (includes attributable rental income from asso
Slide 15: Newly completed shopping mall – Tianjin Kerry Centre
Newly completed shopping mall – Tianjin Kerry Centre Soft opened on 30 April 2015 5-level Lifestyle & Entertainment Shopping Destination Located on the east bank of the Haihe CBD in Hedong District Mall GFA: 82,000 s.m (150 shops) Up to July-2015: Committed: 89% (based on area) Opened: 62% (based on
Slide 16: Next in the Pipeline: Kerry Central, Hangzhou
Next in the Pipeline: Kerry Central, Hangzhou Prime location in the heart of the city’s traditional CBD in Xiacheng District Project Summary Up to July-2015: Total gross Total: 340,000 s.m • Retail area is 40% committed plus 45% under negotiation development area (including basement area) (s. m) • O
Slide 17: Kerry Central, Hangzhou – overview of the complex
Kerry Central, Hangzhou – overview of the complex West Lake QingchunRoad 庆春路 (“Wall Street” of the city ) Shangri-La Hotel Premium apartments Grade-A 6-level Shopping Mall with West Lake view Office 93,000 s.m Yan‘an Road 延安路 (major shopping street) Largest underground car park in central Hangzhou A
Slide 18: PRC Property Sales – 1H 2015 contracted sales +24% YoY
PRC Property Sales – 1H 2015 contracted sales +24% YoY 1H 2015 1H 2014 RMB 2.1B RMB 1.7B Contracted Sales (or $2.6B) (or $2.1B) GFA Sold 139,000 s.m 126,000 s.m • Recognized sales of subsidiaries were mainly contributed by: Avg. Selling Price RMB 15,100 psm RMB 13,500 psm 1H 2015 - Shenyang, Chengdu
Slide 19: PRC new land acquisition in 2015: mixed-use development in Qianhai
PRC new land acquisition in 2015: mixed-use development in Qianhai Why Qianhai ? To replicate the success of Strategic location Easy access to 3 airports from Qianhai Shenzhen Kerry Plaza 40,000 companies registered (as of Jul-2015), +102% vs. early 2015 Kerry “mini HK” Properties financial hub (T10
Slide 20: 4. Financial Position
4. Financial Position 20 Kerry Properties Lien RRRRARAA
Slide 21: Financial Position
Financial Position As at 30 As at 31 HK$ million Jun 2015 Dec 2014 Change Total Debt 36,151 34,239 +6% Including $2.4B land premium for Beacon Hill Cash and bank balance 11,231 11,392 -1% Total cash & undrawn facilities $27B Undrawn Bank Loan 16,023 13,840 +16% Facilities Net Debt 24,920 22,847 +9%
Slide 22: 5. Appendix
5. Appendix a. HK Property – 1H 2015 Contracted Sales b. PRC Property – 1H 2015 Contracted Sales c. PRC Property – Investment Property Portfolio d. Jing An Kerry Centre, Shanghai e. Kerry Parkside, Shanghai f. Shenzhen Kerry Plaza g. Beijing Kerry Centre h. Tianjin Kerry Centre i. HK Properties Unde
Slide 23: a. HK Property – 1H 2015 Contracted Sales
a. HK Property – 1H 2015 Contracted Sales Projects on sale KPL’s Total Units Remaining ASP achieved Attri sales Construction interest project sold in stock* in 1H 2015 proceeds* ^ progress (%) units 1H 2015 (units) HK$ psf HK$ bn EXISTING PROJECTS Occupation Permit 1 Dragons Range 40% 973 191 209 15
Slide 24: b. PRC Property – 1H 2015 Contracted Sales
b. PRC Property – 1H 2015 Contracted Sales Name Product type Attributable Attributable Avg. Selling KPL’s Contracted GFA Sold Price interest Sales s.m achieved RMB’M RMB psm KEY PROJECTS SOLD 1 Hangzhou Castalia Court * R 560 25,000 22,000 100% 2 Putian Arcadia Court R 270 29,000 9,500 60% 3 Tianjin
Slide 25: c. PRC Property – Investment Property Portfolio
c. PRC Property – Investment Property Portfolio 1H 2015 GFA & Occupancy Weighting Attri GFA (000s s.f.) Beijing Shanghai Shenzhen Tianjin Fuzhou Total Occupancy rate % Office 711 1,520 1,552 --- --- 3,783 56% 97% Commercial 98 1,098 212 432 64 1,904 28% 97% Serviced Apartment 277 774 --- --- --- 1,0
Slide 26: d. Jing An Kerry Centre, Shanghai
d. Jing An Kerry Centre, Shanghai Occupancy at period end * average occupancy 96%94% 95% 96%94% 88% 84% 79% 70% 65% Office (Phase 1) Office (Phase 2) Retail (Phase 1&2) Apartment Hotel * As of Jun 30, 2015 As of Dec 31, 2014 Project Summary Gross GFA (s.f.) Total : 3.7M • Located in the heart of Sha
Slide 27: e. Kerry Parkside, Shanghai
e. Kerry Parkside, Shanghai Occupancy at period end * average occupancy 100%100% 100%100% 89% 79% 71% 66% Office Retail Apartment Hotel * As of Jun 30, 2015 As of Dec 31, 2014 • Mixed-used property comprising a hotel, offices, serviced apartments and Project Summary retail Gross GFA (s.f.) Total : 2
Slide 28: f. Shenzhen Kerry Plaza
f. Shenzhen Kerry Plaza Occupancy at period end 98% 98% 98% 97% Phase I Office Phase 2 Office As of Jun 30, 2015 As of Dec 31, 2014 Project Summary Gross GFA (s.f.) Total: 1.7M Office: 1.6M (3 towers) Retail: 0.1M • 3 Grade-A office towers located at the core of Futian CBD KPL’s Interest 100% • Conv
Slide 29: g. Beijing Kerry Centre
g. Beijing Kerry Centre Occupancy at period end * average occupancy 98% 99% 100% 96% 92% 86% 75% 74% Office Retail Apartment Hotel * As of Jun 30, 2015 As of Dec 31, 2014 Project Summary Gross GFA Total : 2.2M • Continues to be an iconic presence at the heart of Beijing (s.f.) Retail : 0.1M • Locate
Slide 30: h. Tianjin Kerry Centre Ph 1
h. Tianjin Kerry Centre Ph 1 Arcadia Court T1-3 (residential for sale) Prime location with direct access to Metro Line 9 Shangri-La Hotel Riverview Place (shopping mall) Project Summary • Mixed-used development located on the east bank of the Haihe Total gross Total: 508,000 (including basement area
Slide 31: i. HK Properties Under Development
i. HK Properties Under Development Currently, KPL has approximately 2.7 M s.f of properties under development in HK and Macau Name Location Type Stage of Completion Expected KPL’s Buildable Completion Interest GFA* (%) (s.f.) FOR SALE PROPERTIES 1 5-6 Hing Hon Road Project Sai Ying Pun R Foundation
Slide 32: j. PRC Major Properties Under Development
j. PRC Major Properties Under Development Currently, KPL has approximately 31.9 M s.f of major properties under development in PRC Name Location Type Stage of Completion Expected KPL’s KPL’s Completion Interest Attributable (%) GFA (s.f.) MIXED USED DEVELOPMENT 1 Nanchang Complex Nanchang R/O/C Ph I
Slide 33: j. PRC Major Properties Under Development (con't)
j. PRC Major Properties Under Development ( con’t ) Currently, KPL has approximately 31.9 M s.f of major properties under development in PRC Name Location Type Stage of Completion Expected KPL’s KPL’s Completion Interest Attributable (%) GFA (s.f.) PRIMARILY FOR SALE PROPERTIES 8 Enterprise Centre S
Slide 34: j. PRC Major Properties Under Development (con't)
j. PRC Major Properties Under Development ( con’t ) Currently, KPL has approximately 31.9 M s.f of major properties under development in PRC Name Location Type Stage of Completion Expected KPL’s KPL’s Completion Interest Attributable (%) GFA (s.f.) PRIMARILY FOR SALE PROPERTIES (con’t) 17 The Metrop
Slide 35: k. Total Land Bank
k. Total Land Bank Total Property Portfolio Attributable GFA: Approx. 57.1M s.f. (as of 30 Jun 2015) Overall – By Type Overall – By Location PUD 71% Held for Macau sale 4% 4% Hotel 5% Overseas 9% PRC 78% HK 9% Completed IP 20% PUD – By Location PRC PUD – By Usage Macau 6% Hotel 7% Overseas Apartment
Slide 36: k. HK Land Bank
k. HK Land Bank Hotel HK Land bank Attributable 1% GFA Commercial (‘000 s.f) 23% Residential 46% Completed Investment Properties 5.3M s.f in Commercial 1,223 attributable Office 838 GFA Apartment 722 Office 16% Residential properties under development 2,315 Service apartment 14% Completed properties
Slide 37: k. PRC Land Bank
k. PRC Land Bank PRC Land bank Attributable Hotel GFA 12% (‘000 s.f) Commerical 14% Completed investment properties 6,738 43.7M s.f Commercial 1,904 attributable GFA Residential 51% Office 3,783 Office Apartment 1,051 20% Service Properties under development 31,850 apartment 3% Completed properties
Slide 38: Disclaimer
Disclaimer The information in this presentation is for personal, non-commercial reference and general information purposes only and should not be relied upon for investment decision purposes. The information in this presentation, including without limitation any stock price, market data information,