Swire Properties Limited · HKEX:1972

Swire Properties — H1 2015 Earnings Presentation

42 slides from Swire Properties's earnings presentation, Aug 20, 2015

1. Slide 1: 2015 Interim Results | Analyst Briefing

   2015 Interim Results | Analyst Briefing 20th August 2015 © Swire Properties Limited 太古地產有限公司

2. Slide 2: Financial Summary

   Financial Summary DE4@ SWiRE PROPERTIES

3. Slide 3: Result Highlights

   Result Highlights Gross Rental Income Underlying Profit Equity Attri. to Shareholders 10,320 6.4% 4.3% 2.8% 9,676 5,368 M 213.5 Bn HK$ HK$ 3,938 M HK$ 5,045 + 10.7% + 4.8% + 7.3% 2013 2014 1H 2014 1H 2015 2013 2014 1H 2014 1H 2015 Dec 2013 Dec 2014 Jun 2015  Gross rental income up 6.4% to HK$5,368M

4. Slide 4: Key Developments

   Key Developments Apr Sino-Ocean Taikoo Li Chengdu Apr Taikoo Place Apartments 2015 2015  50:50 JV with Sino-Ocean Land ~ 1.3M sf GFA  111 serviced apartments ~ 63,000 sf GFA  Formally opened in Apr 2015 with 87% occupancy  Pre-leasing in progress with opening in Aug 2015 Apr Brickell City Centre

5. Slide 5: Financial Summary

   Financial Summary HK$M 1H 2014 1H 2015 Change Revenue 8,338 9,386 12.6% Valuation gains on investment properties 2,357 4,458 89.1% Operating profit 7,103 9,605 35.2% Underlying profit 3,775 3,938 4.3% Reported profit 6,461 8,493 31.5% Underlying earnings per share (HK$ per share) 0.65 0.67 3.1% Repo

6. Slide 6: Earnings Reconciliation

   Earnings Reconciliation Earnings Reconciliation Movement in Underlying Profit HK$M 1H 2014 1H 2015 HK$’M Attributable profit 6,461 8,493 + 51 (17) 3,938 Revaluation of investment props (3,265) (5,202) + 94 (9) Deferred tax on investment props 505 565 + 44 Realised profit on sale of properties 19 19

7. Slide 7: Movement in Investment Properties

   Movement in Investment Properties Movement in Investment Properties Fair Value Gains Breakdown (excl. Hotels & Investment Properties held under JVC) HK$’M HK$’M U.S. & + 4,458 224,524 Others 163 PRC 1,160 HK$ + 4,458 M Hong Kong 3,135 + 1,545 218,720 (168) (31) Notes: Others include U.S. properties

8. Slide 8: Investment Portfolio

   Investment Portfolio DE4@ SWiRE PROPERTIES

9. Slide 9: Gross Rental Income

   Gross Rental Income HK Office 6.5% Gross Rental Income  Positive rental reversions at Taikoo Place and 1H 2015 Gross Rental Income HK$’M Cityplaza, and high occupancy levels at Pacific 10,320 Place.  Demand for office space improved. 9,676 HK$ 5,368 M  Mainland Chinese companies and existing 9,01

10. Slide 10: HK Office Occupancy

    HK Office Occupancy Completed HK GFA (sq ft) Occupancy Area Let (sq ft) Reversion(5) Attri. DCHPlace Taikoo Commercial Centre Island East Office Properties (100% basis) (30th Jun 2015) (New and Renewed (incl. Rent Interest Tenancies) Reviews) Pacific Place 2,186,433 98% 189,028 -4% 100% Cityplaza 1,

11. Slide 11: HK Retail Occupancy

    HK Retail Occupancy Completed HK GFA (sq ft) Occupancy Retail Sales Attri. Retail Properties (100% basis) (30th Jun 2015) Growth Interest ( 1H 2015) The Mall, Pacific Place 711,182 100% -12.7% 100% Cityplaza 1,105,227 100% +10.9% 100% Citygate Outlets 462,428 100% -5.3% 20% Others (1) 556,818 100% N

12. Slide 12: HK Portfolio – Tenant Mix and Lease Expiry

    HK Portfolio – Tenant Mix and Lease Lease Expiry Profile (1)(2) HK Office Jul – Dec 2015 2016 2017 and onwards HK Retail  Strong and diverse tenant base.  Well-balanced lease expiry profile.  Top 10 office tenants occupied approx. 21% of office area in HK.  Top 10 retail tenants occupied approx.

13. Slide 13: Property Portfolio – Hong Kong

    Property Portfolio – Hong Kong Exp. Attributable Expected Attributable GFA of Completed Property Portfolio in Hong Kong (1)(2) Completed GFA (1) (Investment Props) GFA (‘000 sq ft) 15,709 15.7 M sq ft TaiKoo Place Redevelopment (Ph 2) 14,729 14,729 14,729 CP3 Exchange / TaiKoo Place 13,975 13,975 TK

14. Slide 14: Hong Kong Investment Properties Update

    Hong Kong Investment Properties Update 2017 2017 Tung Chung Town Lot 11 New Kowloon Inland Lot 6312  20% owned, a site in Tung  100% owned, a site in Chung (adjacent to Citygate) Kowloon Bay acquired by acquired by tender in Mar tender in Nov 2013. 2013. 2018 +  Plans for an office building  Pla

15. Slide 15: Property Portfolio – Mainland China

    Property Portfolio – Mainland China Attributable GFA of Completed Property Portfolio in Mainland China (1)(2) Exp. Attributable Completed GFA (1) Attributable Valuation (Investment Props) GFA (Investment Props) (‘000 sq ft) HK$ 41.8 Bn 8,740 8.7 M sq ft HKRI Taikoo Hui 6,848 7,011 (Shanghai) (3) Dac

16. Slide 16: Property Portfolio – Mainland China

    Property Portfolio – Mainland China Daci Temple Project Dalian Port Project Taikoo Li Sanlitun INDIGO  Framework Agreement signed.  JV with CITIC Real Estate and Dalian Port Real Estate  Mixed-use: retail & apartments Occupancy Occupancy Retail Sales Occupancy Retail Sales 87% 95% +7% 97% 94% +36

17. Slide 17: Sino-Ocean Taikoo Li Chengdu

    Sino-Ocean Taikoo Li Chengdu Artist’s Impression 87% occupancy 70% opened * 300+ retail / F&B brands 17 * At 30th Jun 2015 and including letters of intent.

18. Slide 18: The Temple House, Chengdu

    The Temple House, Chengdu Artist’s Impression 100 rooms A new intriguing urban hotel opening in Jul 2015 42 serviced apartments 18

19. Slide 19: Brickell City Centre, Miami - Investment

    Brickell City Centre, Miami - Investment Artist Impression EAST, Miami Artist Impression REACH Office RISE Office Shopping Mall Artist Impression Artist Impression Artist Impression Artist Impression Artist Impression  Located in the centre of the Brickell financial district of Miami, with a light

20. Slide 20: Trading Portfolio

    Trading Portfolio DE4@ SWiRE PROPERTIES

21. Slide 21: HK Trading Portfolio

    HK Trading Portfolio AREZZO WHITESANDS 108 units out of 127 units sold since launch 28 Modern Detached Two-Storey Houses official launch soon… $28,981 psf (avg price) 100 Caine Road (GFA: 195,533 sf) to be completed by 2016 DUNBAR PLACE AZURA ARGENTA MOUNT PARKER RESIDENCES All Sold (53 units sold)

22. Slide 22: Brickell City Centre, Miami - Trading

    Brickell City Centre, Miami - Trading Condominiums – REACH and RISE RISE EAST, MIAMI REACH Artist Impression Artist Impression Artist Impression REACH 317 out of 390 units sold since launch (1) mid-600s psf (avg price) (2) Artist Impression RISE 129 out of 390 units sold since launch (1) high-600s p

23. Slide 23: Financing

    Financing SWIRE PROPERTIES

24. Slide 24: Net Debt and Gearing

    Net Debt and Gearing Net Debt Reconciliation (HK$M) Gearing Net debt at 31st Dec 2014 (34,071) Net rental and fees receipts 36,945 36,805 4,571 Proceeds from property trading / development 3,031 Capex- PP&E and property investment (1,770) Development costs – property trading (1,594) Net investments

25. Slide 25: Maturity Profile & Liquidity

    Maturity Profile & Liquidity Maturity Profile of Available Committed Facilities (at 30th Jun 2015) HK$M Dec 2014 Jun 2015 Cash 2,874 3,032 Total 43,346 758 7,434 11,553 6,501 4,375 5,701 487 4,363 487 1,087 600 Drawn 36,332 258 6,684 9,464 6,001 2,000 4,901 487 4,363 487 1,087 600 Undrawn - committe

26. Slide 26: Capital Commitments

    Capital Commitments Profile of Capital Commitments – at 30th Jun 2015 HK$’M Expenditure Forecast Year of Expenditure Commitments* 6 mths ended 6 mths ended 2016 2017 2018 & At 30th Jun 2015 30th Jun 2015 31st Dec 2015 later Hong Kong 843 869 4,089 3,900 7,966 16,824 Mainland China 395 521 2,096 868

27. Slide 27: Prospects

    Prospects D4 SwirE PROPERTIES

28. Slide 28: Prospects

    Prospects Hong Kong Office Hong Kong Retail  The pick-up in demand for office space in Hong Kong  The fall in retail sales in Hong Kong has made retailers more experienced in 1H 2015 is expected to continue. cautious.  There is demand for space in the central district.  However, Swire Properties

29. Slide 29: Swire Properties in Five Years

    Swire Properties in Five Years Expected Attributable GFA by Segment Expected Attributable GFA by Region Expected Attri. Trading GFA Sales to Complete GFA (‘000 sq ft) + 26% GFA (‘000 sq ft) + 26% 27,104 27,104 Exp. Units N/A HK Residential (5.1%) + 11% 195,533 sq ft 197 (3.1%) (9.8%) + 439% + 22% 21

30. Slide 30: Appendix

    Appendix D4 SwiRE PROPERTIES

31. Slide 31: Property Portfolio

    Property Portfolio Investment Props / Hotels Office Retail Hotels(2) Resid. Under- Total Attributable Investment Props by Attributable GFA (M sq ft)(1) Planning Region (GFA) Completed Hong Kong 10.2 2.5 0.7 0.6 - 14.0 10% Mainland China 2.0 3.8 1.1 0.1 - 7.0 U.S.A. and others - - 0.5 - - 0.5 Sub-Tot

32. Slide 32: Completed Investment Portfolio

    Completed Investment Portfolio Expected Attributable GFA of Completed Investment Portfolio (incl. Hotels) (1) (2) (3)(4) GFA (‘000 sq ft) 21,316 21,479 22,341 23,305 23,613 24,824 26,124 26,124 27,104 TKP Redevelopment Brickell City (Ph II) (3) (4) TKP Redevelopment Centre (Ph II) TKP Redevelopment

33. Slide 33: Revenue Analysis

    Revenue Analysis 1H 2015 Revenue Breakdown by Segment 1H 2015 Revenue Breakdown by Region HK$’M HK$’M 9,386 9,386 HK$’M HK$’M Comparison Comparison 1H 2014 1H 2015 1H 2014 1H 2015 Rental 5,045 5,368 HK 7,191 8,119 Trading 2,707 3,403 China 1,050 1,171 Hotels 522 550 U.S.A. 9 12 Others 64 65 U.K.& Ot

34. Slide 34: HK Portfolio Map

    HK Portfolio Map 333,529 sf 34 (1) The simplified maps are not to scale and are for illustrative purpose only. (2) GFA figures are for reference only.

35. Slide 35: Taikoo Li Sanlitun, Beijing

    Taikoo Li Sanlitun, Beijing  Gross rental income at Taikoo Li Sanlitun increased in 1H 2015, because of growth in Project Summary (100% Basis) reversionary rents. GFA 1.47 M sq ft  Overall occupancy at Taikoo Li Sanlitun was 95% at 30th Jun 2015. Components TKL Sanlitun South  Retail sales grew b

36. Slide 36: 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 increased in 1H 2015. GFA 3.84 M sq ft  Occupancy of the shopping mall was 99% at 30th Jun 2015. Components Shopping Mall 2 Office Towers  Retai

37. Slide 37: INDIGO, Beijing

    INDIGO, Beijing  Occupancy (1) at the shopping mall was 94% at 30th Jun 2015. Project Summary (100% Basis)  Retail sales increased by 36% in 1H 2015, and are expected to continue to grow. GFA 1.89 M sq ft  More people visited the mall following the opening of Line 14 of the Beijing Metro in Compo

38. Slide 38: Daci Temple Project, Chengdu

    Daci Temple Project, 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  A large-scale retail-led development comprising a street-style retail complex (2-3 storey Project Summary (10

39. Slide 39: HKRI Taikoo Hui, Shanghai

    HKRI Taikoo Hui, Shanghai Artist’s Impression Artist’s Impression  A large-scale retail-led mixed-use development comprising a retail mall, two office Project Summary (100% Basis) towers and three hotels (1), and is expected to become a landmark development in GFA 3.46 M sq ft Shanghai. Components

40. Slide 40: HK Trading Portfolio

    HK Trading Portfolio Trading Properties being Sold Saleable Total Unit Actual Actual Units for which Profit Recognised or Int. (At 18th Aug 2015) Area(1) Units Sold Completion Handover Expected to be Recognised (Year) (sq ft) (100% basis) - 122 (before 2015), 3 (1H 2015) and 1 AZURA, 2A Seymour Road

41. Slide 41: 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

42. Slide 42: Valuation of Completed Investment Properties

    Valuation of Completed Investment Properties  Consistent value creation through continuous property investment and asset reinforcement. 2004 – Jun 2015 Valuation of Completed Investment Properties (excl. Hotels) * 224,524 Valuation of investment 218,720 portfolio tripled in 11 years 213,423 42 * Pe

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