Hysan Development Co., Ltd. · HKEX:14
Hysan Development — H1 2021 Earnings Presentation
30 slides from Hysan Development's earnings presentation, Aug 11, 2021
Slide 1: Hysan Development 2021 Interim Results Analyst Briefing
Hysan Development 2021 Interim Results Analyst Briefing 11 August 2021
Slide 2: Disclaimer
Disclaimer 11 August 2021 | Page 2 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 comp
Slide 3: Signs of Recovery
Signs of Recovery 11 August 2021 | Page 3 • 1H 2021: first signs of recovery in major economies after global roll-out of COVID-19 vaccines • Hong Kong: GDP grew, labour market improved and residential sales market remained active • Global recovery still uneven and uncertain; Hong Kong still affected
Slide 4: 2021 Hysan's Interim Results Highlights
2021 Hysan’s Interim Results Highlights 11 August 2021 | Page 4 • In 1H 2021, Hysan’s Turnover and Recurring Underlying Profit decreased YoY by 7.4% and 12.6% respectively • Occupancies of Office and Retail portfolios were 95% and 97% on a committed basis respectively
Slide 5: An Active 2021 for Hysan
An Active 2021 for Hysan 11 August 2021 | Page 5 • Won tender for Caroline Hill Road site • Enlarged landholdings will augment neighbourhood and community vision • Highlights our confidence in HK and its role in GBA • Complement our existing portfolio which has a strong dual-engine office and retail
Slide 6: An Active 2021 for Hysan (con't)
An Active 2021 for Hysan (con’t) 11 August 2021 | Page 6 • Hong Kong’s office rental market continued to be affected by COVID-19 issues • Hysan’s office portfolio saw demand from new economy tenants • Expansion from individual tenants in fin tech, flex/co-work and wealth management • Demand from tho
Slide 7: An Active 2021 for Hysan (con't)
An Active 2021 for Hysan (con’t) 11 August 2021 | Page 7 • Lack of tourists continued to affect HK retail • Our estimated tenant sales still grew by 32% YoY, significantly better than HK retail sales growth of 8.4% YoY • Proved Hysan’s business model creating “destination of choice” in recent years
Slide 8: Support for the Community
Support for the Community 11 August 2021 | Page 8 • Hysan contributed as a major community stakeholder, in particular towards its tenants • Invested time and effort into partnership with tenants and understood their needs • Launched creative, customized and collaborative marketing events • Enhanced
Slide 9: Support for the Community (con't)
Support for the Community (con’t) 11 August 2021 | Page 9 • To encourage vaccination and aim for a fully-vaccinated Lee Gardens area: o Partnered Adventist Medical to host HK’s first in-mall vaccination promotion health check centre at Leighton Centre o Distributed health check packages to underpriv
Slide 10: A New Venture in Flex
A New Venture in Flex 11 August 2021 | Page 10 • Lee Gardens portfolio will continue to be our core business • Well prepared to build for the future which will complement and extend our reach • Forms JV with IWG to operate co-work/flex centres in the Greater Bay Area including Hong Kong • Flex will
Slide 11: A New Venture in Flex (con't)
A New Venture in Flex (con’t) 11 August 2021 | Page 11 • Hysan a pioneer of the sector in HK from more than 20 years ago when we started partnership with IWG • IWG proven global market leader that wins out after industry consolidation, already having 30+ centres in GBA • Hysan provides landlord pers
Slide 12: Looking Ahead
Looking Ahead 11 August 2021 | Page 12 • Major economies are on the road to recovery • However development and containment of COVID is unpredictable • Compounded by geopolitical tensions affecting confidence • Hong Kong economy can only make significant stride when vast majority of the community is
Slide 13: Looking Ahead (con't)
Looking Ahead (con’t) 11 August 2021 | Page 13 • Hysan has comprehensive strategy for long and short-term targets • Grow our core business in Lee Gardens • Our strong balance sheet ensures our strength to capture opportunities, and now the right time to do so, both at our core business and beyond
Slide 14: 1H 2021 Results Highlights
1H 2021 Results Highlights 11 August 2021 | Page 14 1H 2021 1H 2020 HK$'M HK$'M % Turnover 1,834 1,981 -7.4% Recurring Underlying Profit 1,177 1,346 -12.6% Underlying Profit 1,177 1,346 -12.6% - Fair value gain on investment properties located in ‧ Hong Kong (517) (3,871) ‧ Shanghai* 72 (19) - Imput
Slide 15: 1H 2021 Performance: By Portfolio
1H 2021 Performance: By Portfolio 11 August 2021 | Page 15 Turnover (HK$’M) 2500 1,981 2000 154 (8%) 1,834 1,729 134 (7%) 142 (8%) 1500 927 (47%) 880 (48%) 887 (51%) 1000 500 900 (45%) 820 (45%) 700 (41%) 0 1H 2020 2H 2020 1H 2021 Retail Office Residential
Slide 16: Strong Financial Position & Ample Liquidity
Strong Financial Position & Ample Liquidity 11 August 2021 | Page 16 Debt Maturity Profile as at 30 June 2021 Financial Position Highlight (HKD’m) 4,672 3,790 Gearing Ratio* Average Debt Maturity 2,730 8.2% 6.6 years 2,166 1,500 Fixed : Floating Effective Interest Rate 750 531 565 400 300 500 500 2.
Slide 17: Indicative Cap Rates
Indicative Cap Rates 11 August 2021 | Page 17 30 Jun 2021 31 Dec 2020 Retail 5.25% - 5.50% 5.25% - 5.50% Office 4.25% - 5% 4.25% - 5% Residential 3.75% 3.75%
Slide 18: 1H 2021 Performance: Office Portfolio
1H 2021 Performance: Office Portfolio 11 August 2021 | Page 18 • Office turnover declined by 5.1% YoY to HK$880 million Office Portfolio Turnover (HK$’M) 1000 • Occupancy: 93% (95% on a committed basis) as at 30 June 2021 950 927 • Average rental reversion rate on renewals, rent 900 887 review and n
Slide 19: 1H 2021 Performance: Office Portfolio (con't)
1H 2021 Performance: Office Portfolio (con’t) 11 August 2021 | Page 19 • Balanced portfolio with different industries Office Portfolio represented Professional & Consulting 14.5% Banking & Finance • Lee Gardens as a preferred location for 24.5% banking and finance, new economy and personal services
Slide 20: 1H 2021 Performance: Retail Portfolio
1H 2021 Performance: Retail Portfolio 11 August 2021 | Page 20 • Retail turnover was HK$820 million, down 8.9% YoY Retail Portfolio Turnover (HK$’M) 1000 • Occupancy was 97% 900 (97% also on a committed basis) 900 820 800 • Overall rental reversion rate on renewals, 700 rent review and new lettings
Slide 21: 1H 2021 Performance: Retail Portfolio (con't)
1H 2021 Performance: Retail Portfolio (con’t) 11 August 2021 | Page 21 • Hysan tenant retail sales outperformed overall Hong Kong & Hysan Tenant Retail Sales Hong Kong retail sales (Jan-Jun 2021, YoY) • Hysan outperformed the market in basically all the Type of retail outlet Hong Kong Hysan (estimat
Slide 22: Marketing Incentives and Loyalty Programmes
Marketing Incentives and Loyalty Programmes 11 August 2021 | Page 22 • Events and promotional activities throughout the reporting period providing support for tenants • Club Avenue VIPs treated to private promotional and sales events
Slide 23: 1H 2021 Performance: Residential Portfolio
1H 2021 Performance: Residential Portfolio 11 August 2021 | Page 23 • Residential portfolio turnover saw a decline of 13.0% YoY to HK$134 million Residential Portfolio Turnover (HK$’M) • Occupancy was 73% as at 30 June 2021 170 160 154 • Luxury residential market continued to be affected 150 by trav
Slide 24: Property Development – Caroline Hill Road and Tai Po
Property Development – Caroline Hill Road and Tai Po 11 August 2021 | Page 24 • Acquisition of Caroline Hill Road site marks a clear expansion of our core assets in Lee Gardens • Adds 1.07 million square feet of prime commercial space, 27% expansion of our current portfolio’s GFA • An estimated 10 t
Slide 25: Property Development – Caroline Hill Road and Tai Po (con't)
Property Development – Caroline Hill Road and Tai Po (con’t) 11 August 2021 | Page 25 • The value is further enhanced by proposed connectivity scheme, offer pleasant weatherproof walkway from Hysan Place to Caroline Hill • 60 thousand square feet of greenery: urban oasis matches sustainability minds
Slide 26: Property Development – Caroline Hill Road and Tai Po (con't)
Property Development – Caroline Hill Road and Tai Po (con’t) 11 August 2021 | Page 26 • Tai Po residential project’s target completion date: early 2022 • Sales launch also targeted for early 2022
Slide 27: Harnessing Business Technology
Harnessing Business Technology 11 August 2021 | Page 27 • Ready to unveil an interactive e-community • E-commerce platform for unique shopping and related experiences, including activities and events • New channel for tenants to engage customers • Hysan’s new headquarters is a “smart” office with ad
Slide 28: Sustainability and Community
Sustainability and Community 11 August 2021 | Page 28 • Health, wellness and safety top priorities during COVID-19 days • Forward-looking provision of air purifiers to F&B and service tenants preceded HK Govt directives • Wide use of HK developed technology • Hosted wellness town halls including COV
Slide 29: Thank you
11 August 2021 | Page 29 Thank you
Slide 30: Hysan Development 2021 Interim Results Analyst Briefing
Hysan Development 2021 Interim Results Analyst Briefing 11 August 2021
Hysan Development Company — H1 2021 Earnings Presentation on 6ix