Hysan Development Co., Ltd. · HKEX:14
Hysan Development — H1 2017 Earnings Presentation
26 slides from Hysan Development's earnings presentation, Aug 4, 2017
Slide 1: Hysan Development 2017 Interim Results Analyst Briefing
Hysan Development 2017 Interim Results Analyst Briefing 4. 8. 2017
Slide 2: Disclaimer
Disclaimer This document has been prepared for general information purposes only, and is not, and should not be construed as an offer to sell, or a solicitation of an offer to buy any securities. Information and estimates contained and opinions expressed herein have been complied in good faith by Hy
Slide 3: Agenda
Agenda 1. Hysan Portfolio 2. 2017 Interim Results Highlights 3. 2017 1H Performance By Portfolio 4. Indicative Cap Rates 5. Financial Position 6. Lee Garden Three Construction 3
Slide 4: Hysan Portfolio - One of the largest commercial landlords in Causeway Bay
Hysan Portfolio - One of the largest commercial landlords in Causeway Bay The Hysan Portfolio – 4.1 million sq.ft. (GFA) of high- quality retail, office and residential space (excluding Lee Garden Three, which are currently under development) Retail Hysan Place: trendy gathering place for younger c
Slide 5: 2017 Interim Results Highlights
2017 Interim Results Highlights ● Turnover up 1.8% year-on-year; Recurring Underlying Profit up 4.2% ● Retail portfolio occupancy at 99%; Office portfolio occupancy at 94% ● Demand for quality Grade A office space in core commercial district supports the strong demand in forthcoming Lee Garden Three
Slide 6: Overview
Overview ● Overall improvement in the global economy during the first half of 2017 ● Hong Kong’s economy echoed this positive sentiment ● Local retail sales was reasonably stable ● Office leasing market continued to see strong demand for core area space 6
Slide 7: A Memorable Shopping Experience
A Memorable Shopping Experience ● Structural adjustments generated by e-commerce and the corresponding changes in consumer behaviour have seen us adapt to new ways of operating our retail space ● Shopping experience must combine quality service, with content which is constantly refreshed, relevant a
Slide 8: A Memorable Shopping Experience (con’t)
A Memorable Shopping Experience (con’t) ● Aim to give our shoppers and visitors much more than simple convenience in ways that cannot be replicated online ● Physical store still plays an important but changing role, through the provision of a backdrop to supply content and entertainment 8
Slide 9: A Memorable Shopping Experience (con’t)
A Memorable Shopping Experience (con’t) ● Take an integrated approach Collaborate with tenants / stakeholders for events and activities Expand our loyalty programmes Make use of technology on promotions and customer interface Enhance our tenant mix ● Our geographical concentration help magnify p
Slide 10: A Memorable Shopping Experience (con’t)
A Memorable Shopping Experience (con’t) ● Unique events included: CX / HSBC Rugby Sevens Fan Walk (street festival, technology-based games, e-coupons to drive tenant business) “Leeisure” programme rewarded high-spending shoppers eslite summer lifestyle festival 10
Slide 11: A Memorable Shopping Experience (con’t)
A Memorable Shopping Experience (con’t) ● Lee Gardens is a unique community, and those who live, work, eat and shop here form an emotional attachment ● Continue to curate fresh and engaging content for this community, and ensure it remains a front-of-mind destination throughout the day for individua
Slide 12: A Memorable Shopping Experience (con’t)
A Memorable Shopping Experience (con’t) 12
Slide 13: A Memorable Shopping Experience (con’t)
A Memorable Shopping Experience (con’t) ● Special marketing efforts aimed at recruiting new members for loyalty programmes Club Avenue membership for VIPs Lee Gardens Plus membership for commercial tenants’ staff and residential tenants ● Added resources to visitors’ marketing programme through co
Slide 14: A Memorable Shopping Experience (con’t)
A Memorable Shopping Experience (con’t) ● Utilise technology for different aspects of events and loyalty programmes ● Continue to bring in interesting businesses and concepts for our permanent spaces and pop-up stores 14
Slide 15: Office Portfolio Advantages
Office Portfolio Advantages ● Benefit from companies’ movement away from Central and nearby areas to other core district of Hong Kong Island ● Location convenient and accessible, with broad range of lifestyle offerings ● Partner with up-and-coming co-work space providers to create work-based communi
Slide 16: Lee Garden Three Updates
Lee Garden Three Updates ● Lee Garden Three office space, which takes up about 80% of the tower’s gross floor area, has received rental commitments for more than half of its floor space ● Retail portion will see lifestyle extension to our existing portfolio ● Building on track for end of 2017 comple
Slide 17: Tai Po Project Update
Tai Po Project Update ● Residential joint-venture project’s master layout plan has been established, and its design and statutory submission are in good progress. The site investigation has also been completed. ● Continue to seek similar opportunities to build new engines of growth beyond core portf
Slide 18: 2017 Interim Results Highlights
2017 Interim Results Highlights 30/6/2017 30/6/2016 HK$'M HK$'M % Turnover 1,791 1,760 1.8% Recurring Underlying Profit 1,227 1,178 4.2% Underlying Profit 1,227 1,178 4.2% - Fair value (loss) or gain on investment properties located in ‧ Hong Kong (net of effect of non-controlling interests' shares)
Slide 19: 2017 Interim Results Highlights (con’t)
2017 Interim Results Highlights (con’t) Recurring rental income from high quality investment properties Sizeable portfolio of high quality investment properties Steady turnover growth Book value of investment properties (HK$’billion) Turnover (HK$’million) 3,430 3,535 1H 2H 68.7 69.8 69.6 69.6 3,063
Slide 20: 2017 1H Performance: By Portfolio
2017 1H Performance: By Portfolio Turnover (HK$’M) 1,760 1,775 1,791 HK$139M (8%) HK$135M (8%) HK$134M (7%) HK$635M (36%) HK$657M (37%) HK$672M (38%) Residential Office Retail HK$986M (56%) HK$983M (55%) HK$985M (55%) 2016 1H 2016 2H 2017 1H 20
Slide 21: 2017 1H Performance: Retail Portfolio
2017 1H Performance: Retail Portfolio ● Retail portfolio turnover decreased by 0.1% to Retail Portfolio HK$985 million (2016 1H: HK$986 million) Turnover HK$’M Turnover rent of HK$25 million (2016 1H: HK$28 1,200 - 0.1% million) 1,000 ● Occupancy: 99% as at 30 June 2017 (31 Dec 2016: 800 99%) 600
Slide 22: 2017 1H Performance: Office Portfolio
2017 1H Performance: Office Portfolio ● Office portfolio turnover increased by 5.8% to Office Portfolio HK$672 million Turnover HK$’M (2016 1H: HK$635 million) 800 + 5.8% ● Occupancy: 94% as at 30 Jun 2017 600 (31 Dec 2016: 96%) ● Positive rental reversion in renewals, reviews 400 635 657 672 and ne
Slide 23: 2017 1H Performance: Residential Portfolio
2017 1H Performance: Residential Portfolio ● Residential portfolio turnover decreased by 3.6% Residential Portfolio to HK$134 million (2016 1H: HK$139 million) Turnover HK$’M ● Positive rental reversion on renewals, reviews and 160 - 3.6% new lettings ● Occupancy: 84% as at 30 Jun 2017 120 (31 Dec 2
Slide 24: Indicative Cap Rates
Indicative Cap Rates ● No change in Cap rate from 31 Dec 2016 30 Jun 2017 31 Dec 2016 Retail Lee Garden One 5.00% 5.00% Lee Garden Two 5.25% 5.25% Office Lee Garden One 4.25% 4.25% Lee Garden Two 4.75% 4.75% Residential Bamboo Grove 3.75% 3.75% Property under development Lee Garden Three
Slide 25: Strong Financial Position
Strong Financial Position Low Gearing Stable Debt Profile ● Total Gross Debt: HK$6,392 million ● Fixed Rate Debt: 72.6% of the total gross (31 Dec 2016: HK$6,305 million) debt ● Net Debt to Equity: 4.5% (31 Dec 2016: 5.4%) (31 Dec 2016: 73.4% of the total gross debt) ● Average Debt Maturity: 4.8 yea
Slide 26: Thank you
Thank you [eo Ly ere
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