Swire Properties Limited · HKEX:1972

Swire Properties — H1 2016 Earnings Presentation

44 slides from Swire Properties's earnings presentation, Aug 18, 2016

  1. Slide 1: 2016 Interim Results | Analyst Briefing

    2016 Interim Results | Analyst Briefing 18th August 2016 © Swire Properties Limited 太古地產有限公司

  2. Slide 2: Key Developments

    Key Developments Artist Impression Mar Apr 2016 2016 Three Brickell City Centre Opened ALASSIO Pre-sale 84% Occupancy (1) 184 units sold (2) Artist Impression Artist Impression Jun Jul 2016 2016 EAST, Miami Opened One & Two Taikoo Place with 352 Rooms, including 89 Serviced Apartments HK$15Bn redeve

  3. Slide 3: Financial Summary

    Financial Summary DE4@ SWiRE PROPERTIES

  4. Slide 4: Result Highlights

    Result Highlights Gross Rental Income Underlying Profit Underlying Profit Equity Attri. to Shareholders HK$ 5,367 M Flat HK$ 3,559 M 9.6% HK$ 218.3 Bn 1.0% 10,320 10,716 378 216.2 353 4,260 4,366 5,368 187 191 + 2.1% 7,152 216.2 218.3 7,078 2,187 2,148 - 1.8% 207.7 5,707 5,972 3,938 3,559 2,994 3,02

  5. Slide 5: Results Highlights

    Results Highlights  Underlying profit was down 9.6% reflecting lower trading profits from Hong Kong residential sales whilst rental income remained stable.  Solid performance from Hong Kong office portfolio with high occupancy notwithstanding the loss in rental for space re Taikoo Place redevelopm

  6. Slide 6: Financial Summary

    Financial Summary HK$M 1H 2015 1H 2016 Change Revenue 9,386 7,886 16.0% Valuation gains on investment properties 4,458 2,307 48.3% Operating profit 9,605 6,730 29.9% Underlying profit 3,938 3,559 9.6% Reported profit 8,493 5,334 37.2% Underlying earnings per share (HK$ per share) 0.67 0.61 9.0% Repo

  7. Slide 7: Earnings Reconciliation

    Earnings Reconciliation Earnings Reconciliation Movement in Underlying Profit HK$M 1H 2015 1H 2016 HK$’M Attributable profit 8,493 5,334 Revaluation of investment props (5,202) (2,617) 64 (68) 4,000 3,938 (18) Deferred tax on investment props 565 660 (304) Realised profit on sale of properties 19 -

  8. Slide 8: Movement in Investment Properties

    Movement in Investment Properties Movement in Investment Properties (excl. Hotels & Investment Properties held under JVCs) Fair Value Gains Breakdown HK$’M 232,000 + 2,307 231,238 HK$’M + 1,435 (432) U.S.A Hong Kong 229,000 228,449 (521) 730 761 HK$ + 2,307 M 226,000 PRC 223,000 816 220,000 30th Jun

  9. Slide 9: Investment Portfolio

    Investment Portfolio DE4@ SWiRE PROPERTIES

  10. Slide 10: Gross Rental Income

    Gross Rental Income HK Office 0.5% Gross Rental Income  Occupancy remained high at 99%.  Positive rental reversions.  Demand for office space is likely to be Flat subdued in 2H 2016. 10,716 HK$’M 9,676 10,320 27 HK$ 5,367M 25 HK Retail 3.7% 10,000  Occupancy levels at 100%. 22 2,014 1,897  The

  11. Slide 11: HK Office Occupancy

    HK Office Occupancy Completed HK GFA (sq ft) Occupancy Area Let (sq ft) Reversion(1) Attri. Office Properties (100% basis) (30th Jun 2016) (New and Renewed (incl. Rent Interest Tenancies) Reviews) Pacific Place 2,186,433 98% 520,603 +12% 100% Cityplaza 1,632,930 100% 216,702 +9% 100% TKP Office Towe

  12. Slide 12: HK Retail Occupancy

    HK Retail Occupancy Completed HK GFA (sq ft) Occupancy Retail Sales Attri. Retail Properties (100% basis) (30th Jun 2016) Growth Interest (1H 2016) The Mall, Pacific Place 711,182 100% -17.0% 100% Cityplaza 1,105,227 100% -4.1% 100% Citygate Outlets 462,428 100% -13.0% 20% Others (1) 556,818 100% N/

  13. Slide 13: HK Portfolio – Tenant Mix and Leases

    HK Portfolio – Tenant Mix and Leases Others Lease Expiry Profile (1)(2) 13.7% Financial Institutions 37.3% Trading HK Office HK Retail 16.4% HK Office 76.3% 63.2% Real Estate- related 9.2% Professional TMT Services 14.5% 8.9% 29.6% Others Department 17.2% 23.3% Stores 6.5% 7.2% 17.0% Jul - Dec 2016

  14. Slide 14: 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) 16,000 15,713 15.7 M sq ft 15,500 Taikoo Place 980 Redevelopment (Ph 2) 15,000 14,733 14,733 14,733 Taikoo Place 14,500

  15. Slide 15: Hong Kong Investment Properties Update

    Hong Kong Investment Properties Update 2017 2017 New Kowloon Inland Lot 6312 2018 Tung Chung Town Lot 11  100% owned site in Kowloon Bay  20% owned site in Tung Chung acquired by tender in Nov 2013. (next to Citygate) acquired by  Being developed into an office tender in Mar 2013. building.  Bei

  16. Slide 16: Property Portfolio – Mainland China

    Property Portfolio – Mainland China Attributable GFA of Completed Property Portfolio in Mainland China (1)(2) Exp. Attributable Attributable Valuation Completed GFA (1) (Investment Props) (Investment Props) GFA (‘000 sq ft) HK$ 42.2 Bn 8.7 M sq ft 8,771 8,152 8,000 1,735 HKRI Taikoo Hui 7,036 1,116

  17. Slide 17: Property Portfolio – Mainland China

    Property Portfolio – Mainland China Sino-Ocean Taikoo Li Dalian Port Project Taikoo Li Sanlitun INDIGO Chengdu  Framework Agreement signed  Mixed-use: retail and apartments Occupancy Retail Sales Occupancy Retail Sales Occupancy Retail Sales 93% +4% 91% 99% +13% Dalian 91% +113% Retail Office Reta

  18. Slide 18: HKRI Taikoo Hui, Shanghai

    HKRI Taikoo Hui, Shanghai Artist’s Impression  GFA: 3.5M sq ft  A retail mall, 2 office buildings, 2 hotels and 1 serviced apartment tower  Structural work has been completed  Open in phases from 2H 2016 Artist Impression 18

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

    Brickell City Centre, Miami - Investment Artist Impression EAST, Miami Reach Artist Impression EAST, Miami Office Reach Rise Three BCC Office Artist Impression Rise Two BCC Shopping Mall Artist Impression Shopping Centre Artist Impression Artist Impression  Located in the centre of the Brickell fin

  20. Slide 20: Three Brickell City Centre / EAST, Miami

    Three Brickell City Centre / EAST, Miami Three Brickell City Centre EAST, Miami 84% Occupancy(1) 352 rooms, including 89 serviced apartments Artist Impression One BCC 20 (1) At 30th June 2016.

  21. Slide 21: Trading Portfolio

    Trading Portfolio DE4@ SWiRE PROPERTIES

  22. Slide 22: HK Trading Portfolio

    HK Trading Portfolio ALASSIO AREZZO 13 units left (184 units sold) 9 units left (118 units sold) $28,806 psf (avg price) $30,713 psf (avg price) WHITESANDS 26 units left (2 units sold) $23,031 psf (avg price) (1) At 16th Aug 2016. 22 (2) Average selling price is based on saleable area (excluding car

  23. Slide 23: Brickell City Centre, Miami - Trading

    Brickell City Centre, Miami - Trading Future Condominium Tower 523,000 sf EAST, Miami Future Development 1,444,000 sf Reach Artist Impression Handover in Apr 16 Reach 349 out of 390 units sold since launch (1) mid US$ 600s psf (avg price) (2) Rise 174 out of 390 units sold since launch (1) Rise high

  24. Slide 24: Financing

    Financing SWIRE PROPERTIES

  25. Slide 25: Net Debt and Gearing

    Net Debt and Gearing Net Debt Reconciliation (HK$M) Gearing Net debt at 31st Dec 2015 (33,348) HK#039;M Net rental and fees received 37,734 38,068 18% 4,580 40,000 15.9% 16% Proceeds from property trading / development 1,460 15.3% 4,386 2,994 14% Capex- PP&E and property investment (2,140) 30,000 12% D

  26. Slide 26: Maturity Profile and Liquidity

    Maturity Profile and Liquidity Maturity Profile of Available Committed Facilities (at 30th Jun 2016) HK$M Dec 2015 Jun 2016 Total 45,453 2,757 11,222 5,480 4,178 5,682 5,205 4,309 200 600 1,740 4,080 Cash 4,386 2,994 Drawn 37,650 2,007 10,221 5,480 1,801 4,882 2,330 4,309 200 600 1,740 4,080 Undrawn

  27. Slide 27: Capital Commitments

    Capital Commitments Profile of Capital Commitments – at 30th Jun 2016 HK$’M Expenditure Forecast Year of Expenditure Commitments* 6 mths ended 6 mths ended 2017 2018 2019 & At 30th Jun 2016 30th Jun 2016 31st Dec 2016 later Hong Kong 979 3,295 3,933 2,742 5,771 15,741 Mainland China 285 958 1,215 45

  28. Slide 28: Prospects

    Prospects D4 SwirE PROPERTIES

  29. Slide 29: Prospects

    Prospects Hong Kong Office Hong Kong Retail  Given the uncertain economic outlook, demand for office  The fall in retail sales in Hong Kong has made retailers space in Hong Kong is likely to be subdued in 2H 2016. more cautious. Swire Properties’ retail properties in Hong  However, high occupancy

  30. Slide 30: Sustainable Development

    Sustainable Development Energy Reduction and Gross Floor Area Trend Innovation and Experimentation 2020 Energy Reduction Pledge (HK: 64 million kWh/yr; PRC: 23 million kWh/yr) 16% (42+ million kWh) energy saving in HK (from 2001 to 2015) Performance (Environment) 1,710 tonnes of waste recycled in ou

  31. Slide 31: Swire Properties in Five Years

    Swire Properties in Five Years Expected Attri. Trading GFA Sales Expected Attributable GFA by Segment Expected Attributable GFA by Region to Complete GFA (‘000 sq ft) 25% GFA (‘000 sq ft) 25% Exp. Units 27,165 27,165 HK Residential (5.7%) 195,533 sq ft 197 1,555 N/A 21,729 21,729 2,681 + 273% 986 +

  32. Slide 32: Appendix

    Appendix D4 SwiRE PROPERTIES

  33. Slide 33: Property Portfolio

    Property Portfolio Investment Props / Hotels Office Retail Hotels(2) Resid./Serviced Under- Total Attributable Investment Props by Attributable GFA (M sq ft)(1) apartment Planning Region (GFA) Completed 10% Hong Kong 10.2 2.5 0.7 0.6 - 14.0 U.S. & Mainland China 2.0 3.9 1.0 0.1 - 7.0 elsewhere 2.7 U

  34. Slide 34: Completed Investment Portfolio

    Completed Investment Portfolio Expected Attributable GFA of Completed Investment Portfolio (incl. Hotels) (1)(2)(3)(4) GFA (‘000 sq ft) 21,270 21,729 22,521 23,356 24,663 24,741 24,741 27,165 TKP Redevelopment 8-10 Wong Chuk TKP Redevelopment (Ph 2) (3) TKP Redevelopment Hang Road (50%) (Ph 2 - CH)

  35. Slide 35: Revenue Analysis

    Revenue Analysis 1H 2016 Revenue Breakdown by Segment 1H 2016 Revenue Breakdown by Region HK$’M HK$’M 5,193 65.9% 61 504 0.8% 6.4% 1,510 19.1% 1,954 24.8% 7,886 5,367 68.1% 1,183 7,886 5,193 65.9% HK$’M 15.0% HK$’M Comparison Comparison 1H 2015 1H 2016 1H 2015 1H 2016 Rental 5,368 5,367 HK 8,119 5,1

  36. Slide 36: HK Portfolio Map

    HK Portfolio Map (1) The simplified maps are not to scale and are for illustrative purpose only. 36 (2) GFA figures are for reference only.

  37. Slide 37: Taikoo Li Sanlitun, Beijing

    Taikoo Li Sanlitun, Beijing  Gross rental income at Taikoo Li Sanlitun increased in the first half of 2016, as the Project Summary (100% Basis) portfolio continues to gain popularity. GFA 1.47 M sq ft  Overall occupancy at Taikoo Li Sanlitun was 93%(1) at 30th Jun 2016. Components TKL Sanlitun Sou

  38. Slide 38: 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 the first half of 2016, reflecting in GFA 3.84 M sq ft part improvements to the tenant mix. Components Shopping Mall  Occupancy of t

  39. Slide 39: INDIGO, Beijing

    INDIGO, Beijing  Occupancy (1) at the shopping mall was 99%(1) at 30th Jun 2016. Project Summary (100% Basis)  Retail sales increased by 13% in the first half of 2016 which supported rental growth. GFA 1.89 M sq ft  The office tower, ONE INDIGO, was 91% leased (1) at 30th Jun 2016. Demand for off

  40. Slide 40: Sino-Ocean Taikoo Li Chengdu

    Sino-Ocean Taikoo Li Chengdu Artist’s Impression Artist’s Artist’s Impression Impression Artist’s Impression  A large-scale retail-led development comprising a street-style retail complex (2-3 storey Project Summary (100% Basis) blocks), a boutique hotel and serviced apartments (the Temple House),

  41. Slide 41: HKRI Taikoo Hui, Shanghai

    HKRI Taikoo Hui, Shanghai Artist Impression  A large-scale retail-led mixed-use development comprising a retail mall, two office Project Summary (100% Basis) buildings, two hotels and one serviced apartment tower, which is expected to become a landmark development in Shanghai. GFA 3.47 M sq ft  Pr

  42. Slide 42: HK Trading Portfolio

    HK Trading Portfolio Trading Properties Sold or Being Saleable Total Unit Actual Actual Units for which Profit Recognised or Int. Sold or Pre-sold Area(1) Units Sold Completion Handover Expected to be Recognised (Year) (At 16th Aug 2016) (sq ft) (100% basis) MOUNT PARKER RESIDENCES, 2,748 92 91 2013

  43. Slide 43: 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

  44. Slide 44: Valuation of Completed Investment Properties

    Valuation of Completed Investment Properties  Consistent value creation through continuous property investment and asset reinforcement. 2005 – Jun 2016 Valuation of Completed Investment Properties (excl. Hotels) * Valuation of investment portfolio tripled in 11 years 228,449 231,238 218,720 29,069

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