Slide 1: Hysan Development 2016 Annual Results Press Conference
Hysan Development 2016 Annual Results Press Conference 希慎興業 2016年全年業績 新聞發佈會 22. 2. 2017
Slide 2: Remarks by Ms. Irene Yun Lien Lee, Chairman
Remarks by Ms. Irene Yun Lien LEE Chairman 主席利蘊蓮女士 簡介 2016 年全年業績摘要 2
Slide 3: 2016 Highlights
2016 Highlights 2016年摘要 ● Turnover up 3.1% from 2015; Recurring Underlying Profit up 3.8% ● Reported Profit decline reflecting fair value change on investment properties valuation ● Strong occupancy in our commercial portfolio (Retail: 99%; Office 96%) ● With sound financials and a strong balance sh
Slide 4: The Bigger Picture
The Bigger Picture 宏觀環境 ● 2016 saw further global political and economic instability ● Hong Kong’s economy was buffeted by headwinds from abroad ● Retail sales hurt by further drop in tourist arrivals, but showed signs of improvement towards the end of the year ● Office leasing market still saw tigh
Slide 5: Where We Are
Where We Are 我們的現況 ● The new normal: weak retail sales and changes in tourists spending pattern ● Hysan continues to position itself dynamically to capture opportunities which come from the structural changes ● 新常態：零售業銷售疲弱和旅客消費模式轉變 ● 我們會繼續作出靈活部署，務求把握市場的結構性轉變所帶來的機遇 5
Slide 6: Where We Are (con't)
Where We Are (con’t) 我們的現況 （續） ● Sound Financials Strong Balance Sheet Turnover and Recurring Underlying Profit saw growth Occupancy for commercial portfolio strong ● Sound Assets No distressed assets Well planned property enhancement cycles Lee Garden Three to complete ahead of schedule
Slide 7: Where We Are (con't)
Where We Are (con’t) 我們的現況（續） ● Explore Investment Opportunities Develop for sale projects: successful bid for residential sites at Tai Po with HKR International Seek further high quality projects aligned to Hysan’s portfolio strategy in HK and beyond, while maintaining Lee Gardens as core focus
Slide 8: Where We Are (con't)
Where We Are (con’t) 我們的現況（續） ● Strong Team Provide the knowledge, skills and relationships Continue to lead Hysan team as Executive Chairman Addition of COO Ricky LUI with extensive experience in the property industry in Hong Kong, Mainland China and overseas ● 強而有力的管理團隊 提供知識、技能及人脈 繼續以執行主
Slide 9: Our Challenges
Our Challenges 我們的挑戰 ● Retail Portfolio Structural Changes Millennials preferring all things digital Refocus on health, wellness and lifestyle themes leads to changes in offerings ● Mainland Visitors Spending Changes Travel and tax policy changes Desire to shop overseas and buying power fuel
Slide 10: Our Challenges (con't)
Our Challenges (con’t) 我們的挑戰（續） ● Industry Competition Competition shifts focus to local customers Landlords working hard to retain tenants ● Increase in Occupancy Costs Some retail tenants feel the pressure Consolidation of number of shops may lead to more vacancies ● 同業競爭 加強爭取本地顧客 業主積極
Slide 11: Our Challenges (con't)
Our Challenges (con’t) 我們的挑戰（續） ● Office Portfolio Structural Changes More upcoming Grade A supply on HK Island Trend to use more open plan or co-work space More tech leading to fewer headcount and lower space demand ● 寫字樓組合的結構性轉變 香港島甲級寫字樓的供應將會陸續增加 開放式和按活動需要設計的辦公空間日漸流行 科技令人手需求相應下降，空間需求因而
Slide 12: Our Recipe to Curate a Community and Destination
Our Recipe to Curate a Community and Destination 成功有道 – 創建社區 營造熱點 ● Lee Gardens as a Community A distinct part of Causeway Bay Those who live, work and play here form an emotional attachment, often for generations ● A Front-of-Mind Destination for Locals and Visitors Refresh our hardware (real
Slide 13: Our Recipe to Curate a Community and Destination (con't)
Our Recipe to Curate a Community and Destination (con’t) 成功有道 – 創建社區 營造熱點（續） ● Stakeholders contribute to and benefit from multi-dimensional curation ● All help shape Lee Gardens as a destination for today and the long-term ● 我們的持份者帶動我們的多層面策展活動，並從中受惠 ● 造就利園區於現今及長遠而言成為一個到訪熱點 13
Slide 14: Our Recipe to Curate a Community and Destination (con't)
Our Recipe to Curate a Community and Destination (con’t) 成功有道 – 創建社區 營造熱點（續） ● Mainland Chinese professionals who work and live in Hong Kong Working, shopping and dining habits increasingly indifferentiable from longer-term local residents from all over the world Through their daily interaction
Slide 15: Our Recipe to Curate a Community and Destination (con't)
Our Recipe to Curate a Community and Destination (con’t) 成功有道 – 創建社區 營造熱點（續） ● Lee Garden Three Anticipated completion date in late 2017 Strong green and wellness credentials Promote multi-dimensional interaction involving the landlord, tenants, workers and the community ● 利園三期 預期於2017年年底竣工
Slide 16: 2017 Outlook
2017 Outlook 2017 展望 ● Political and economic volatility in the global environment remain; local consumer sentiment still weak ● Clear strategy to curate Lee Gardens as a community ● 全球政治及經濟環境持續波動，本地消費意欲仍疲弱 ● 打造利園區成為一個社區的清晰策略 16
Slide 17: Presentation by Mr. Roger Hao, Chief Financial Officer
Presentation by Mr. Roger HAO Chief Financial Officer 財務總監賀樹人先生 簡介 2016 年全年業績 17
Slide 18: 2016 Annual Results Highlights
2016 Annual Results Highlights 2016年全年業績摘要 2016 2015 HK#039;M HK#039;M % 百萬港元 百萬港元 百分比 Turnover 營 業 額 3,535 3,430 3.1% Recurring Underlying Profit 經 常 性 基 本 溢 利 2,369 2,283 3.8% Underlying Profit 基 本 溢 利 2,369 2,283 3.8% - Fair value (loss) or gain on investment properties located in 投資物業之公平值(虧損)或收益 ‧ Hon
Slide 19: 2016 Performance: By Portfolio
2016 Performance: By Portfolio 2016年表現：按業務劃分 Turnover (HK$’M) 營業額（百萬港元） 3,430 3,535 HK$274M (8%) -3.9% HK$285M (8%) HK$1,243M (36%) HK$1,292M (36%) +3.9% HK$1,902M (56%) HK$1,969M (56%) +3.5% 2015 2016 Retail 商舖 Office 寫字樓 Residential 住宅 19
Slide 20: 2016 Performance: Retail Portfolio
2016 Performance: Retail Portfolio 2016年表現：商舖業務 Market overview: Hong Kong Retail Sales ● 2016 full year: overall decline of 8.1% when compared to 2015 full year ● Reflected fall in nearly all major categories, except food, alcoholic drinks and tobacco 市場概覽：本港零售市況 ● 2016 全年：較去年全年整體下跌8.1% ● 反映接近所有主要類
Slide 21: 2016 Performance: Retail Portfolio (con't)
2016 Performance: Retail Portfolio (con’t) 2016年表現：商舖業務（續） ● Retail portfolio turnover increased by 3.5% to Retail Portfolio Turnover HK$1,969 million (2015 : HK$1,902 million) 商舖業務收入 Turnover rent of HK$46 million HK$’M 百萬港元 (2015: HK$71 million) 2,200 +3.5% 2,000 ● Occupancy: 99% as at 31 Dec 20
Slide 22: 2016 Performance: Retail Portfolio (con't)
2016 Performance: Retail Portfolio (con’t) 2016年表現：商舖業務（續） ● Positive rental reversion in renewals, reviews and new lettings across the portfolio, with an average increase of around 5% in rental levels ● 商舖組合中因續約、租金檢討與新出租物業而訂立的租金水平平均上升約5% 22
Slide 23: 2016 Performance: Retail Portfolio (con't)
2016 Performance: Retail Portfolio (con’t) 2016年表現：商舖業務（續） ● Creative retail experiences including new food and beverage outlets and innovative in-mall marketing activities ● Total foot traffic rose around 5%, achieved against a fall in visitors’ arrivals ● Estimated overall tenant sales saw double-
Slide 24: 2016 Performance: Retail Portfolio (con't)
2016 Performance: Retail Portfolio (con’t) 2016年表現：商舖業務（續） ● Hysan Place Around 5% foot traffic growth in 2016 Added trendy stores and wellness / sport shops to tenant mix Popular in-mall events New food and beverage outlets ● 希慎廣場 2016年的人流增加約5% 商戶組合加入多家時尚商店以及保健和運 動用品店 商場內的人氣活動 多間新食府
Slide 25: 2016 Performance: Retail Portfolio (con't)
2016 Performance: Retail Portfolio (con’t) 2016年表現：商舖業務（續） ● Lee Gardens hub Lee Garden One foot traffic remained stable, while Lee Garden Two saw around 5% increase Fashion brands and new food and beverage offerings added to the hub’s attraction ● 利園商舖組群 利園一期訪客人數保持穩定，利園二期 的人流則增加約5% 多個時裝品牌及餐
Slide 26: 2016 Performance: Retail Portfolio (con't)
2016 Performance: Retail Portfolio (con’t) 2016年表現：商舖業務（續） ● Lee Theatre hub Around 5% increase in foot traffic Lee Theatre Plaza flagship stores and Leighton Centre “sports- themed street” remained popular ● 利舞臺商舖組群 人流增加約5% 利舞臺廣場的旗艦店，以及禮頓中心以「體育街」 為主題的地面商舖均受歡迎 26
Slide 27: 2016 Performance: Retail Portfolio (con't)
2016 Performance: Retail Portfolio (con’t) 2016年表現：商舖業務（續） ● The hubs have special characters, but retail portfolio should be considered in a more holistic manner ● Working to improve the connections among the different hubs ● 商舖組群各有特色，但要全盤審視整個商舖組合 ● 正改善各個商舖組群之間的連繫 27
Slide 28: 2016 Performance: Retail Portfolio (con't)
2016 Performance: Retail Portfolio (con’t) 2016年表現：商舖業務（續） ● New Lee Gardens Plus tenant membership programme ● The offer-and-reward programme now app-based for today’s tech-savvy users ● Improved upon our loyalty programme, Club Avenue with an extra tier, as well as better staff training ● 推出新的「Lee
Slide 29: 2016 Performance: Office Portfolio
2016 Performance: Office Portfolio 2016年表現：寫字樓業務 ● Hysan’s office space accounts for more than 50% of its overall portfolio’s gross floor area ● Contributes 36% of its turnover ● 希慎寫字樓業務組合佔集團業務總樓面面積超過50% ● 佔營業額的36% 29
Slide 30: 2016 Performance: Office Portfolio (con't)
2016 Performance: Office Portfolio (con’t) 2016年表現：寫字樓業務（續） ● Office portfolio turnover increased by 3.9% to Office Portfolio Turnover HK$1,292 million (2015: HK$1,243 million) 寫字樓業務收入 HK$’M ● Occupancy: 96% as at 31 Dec 2016 百萬港元 1,600 (31 Dec 2015: 99%) 1,400 ● Positive rental reversion in renewal
Slide 31: 2016 Performance: Office Portfolio (con't)
2016 Performance: Office Portfolio (con’t) 2016年表現：寫字樓業務（續） ● Mainland Chinese banking and financial sectors ramp up demand in Central and Admiralty ● Companies in other industries needing quality space with good facilities and transportation turn to Causeway Bay and Lee Gardens ● Newly joined tenan
Slide 32: 2016 Performance: Office Portfolio (con't)
2016 Performance: Office Portfolio (con’t) 2016年表現：寫字樓業務（續） ● Balanced tenant mix: Professional and Consulting Insurance High-end Retailers Banking and Finance Represented 52.2% of our office lettable floor area ● No single category took up more than 20% of total lettable area ● 均衡租戶組合：
Slide 33: 2016 Performance: Residential Portfolio
2016 Performance: Residential Portfolio 2016年表現：住宅業務 ● Residential portfolio turnover decreased by 3.9% to Residential Portfolio Turnover HK$274 million (2015: HK$285 million) 住宅業務收入 ● Positive rental reversion with an average rental increase HK$’M of around 5% 百萬港元 ● Occupancy: 82% as at 31 Dec 201
Slide 34: Hysan Business Update: Lee Garden Three
Hysan Business Update: Lee Garden Three 集團業務最新進展：利園三期 ● Above-ground construction was up to 22/F as of mid-February 2017 ● Project expected to be completed around Q4 2017 ● 截至2017年2月中，上蓋工程已進展至22樓 ● 預計整個項目可於2017年第四季完成 34
Slide 35: Hysan Business Update: Asset Enhancement Project
Hysan Business Update: Asset Enhancement Project 集團業務最新進展：資產增值項目 ● Final phase of Lee Garden One ground floor lobby and higher floors’ retail space enhancement project successfully completed in middle of 2016 as scheduled ● Valentino opening expanded store in January 2017 ● Two new food and beverage
Slide 36: Strong Financial Position
Strong Financial Position 穩健財政狀況 Low Gearing 低負債率 ● Total Gross Debt: HK$6,305 million ● 債務總額： 63億5百萬港元 (31 Dec 2015: HK$4,875 million) （2015 年 12 月 31 日： 48億7千5百萬港元） ● Net Debt to Equity: 5.4% (31 Dec 2015: 3.0%) ● 淨債務與股東權益比率：5.4% Stable Debt Profile （2015 年 12 月 31 日：3.0%） ● Fixed Rate Debt: 73.4%
Slide 37: Thank you
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