Hang Lung Properties Limited · HKEX:101
Hang Lung Properties — H1 2022 Earnings Presentation
67 slides from Hang Lung Properties's earnings presentation, July 2022
Slide 1: 2022 Interim Results Presentation
Heartland 66, Wuhan 2022 Interim Results Presentation July 2022
Slide 2: Contents
Contents FY2022 Interim Results Highlights P.3 ESG Highlights P.11 Mainland China Portfolio P.36 • Mall P.37 • Office P.44 • Residences P.46 • Hotel P.47 Mainland China Projects Under Development P.48 Hong Kong Portfolio P.49 • Residential Properties P.55 Appendix P.59 • HLP – Financial Highlights a
Slide 3: FY2022 Interim Results Highlights
FY2022 Interim Results Highlights Hang Lung Properties (101.HK) Hang Lung Group (10.HK) Total Revenue Underlying Profit Total Revenue Underlying Profit HK$5,302M HK$2,217M HK$5,605M HK$1,600M +7% YoY +1% YoY +6% YoY +7% YoY Rental HK$ 4,986M Flat YoY Rental HK$ 2,109M -5% YoY Rental HK$ 5,289M Flat
Slide 4: Revenue Contribution by Segments
Revenue Contribution by Segments Majority from rental business; recognition of property sales revenue HLP Bi-annual revenue contribution by segments (HK$mn) Rev (HK$mn) 1H22: 6,000 HK$5,302mn Property sales: HK$316mn 5,000 from booking of Blue Pool Road 4,000 HK rental: HK$1,619mn 3,000 32% of total
Slide 5: Mainland China Rental Revenue
Mainland China Rental Revenue Resilient revenue despite serious disruption from COVID resurgence HLP Mainland China rental revenue (RMB mn) Rental rev (RMB mn) 7,000 6,000 1H22: 5,000 RMB2,784mn HK$3,367mn 2H YoY +1% YoY +2% 4,000 HoH -8% HoH -8% 2H 3,000 2H 2H 2,000 1H 1H 1,000 1H 1H 1H 0 FY18 FY19
Slide 6: Mainland China Retail Rental Revenue
Mainland China Retail Rental Revenue HLP Mainland China rental revenue from retail (RMB mn) Rental rev YoY change (RMB mn) (%) 40% 2,800 30% 2,300 20% 1,800 10% 1,300 800 0% 1H22: -1% YoY (Like-for-like -5% YoY) 300 -10% 1H19 2H19 1H20 2H20 1H21 2H21 1H22 Mainland Retail rental rev Retail - YoY% Not
Slide 7: Mainland China Tenant Sales
Mainland China Tenant Sales Affected by COVID resurgence in Shanghai and Shenyang, partially offset by strength at Olympia 66 and newly opened Heartland 66 Mainland China Tenant Sales YoY Change (%) YoY change (in RMB) Overall tenant sales Luxury malls Sub-luxury malls -15% YoY in 1H22 -14% YoY in 1
Slide 8: Mainland China Office Rental Revenue
Mainland China Office Rental Revenue 16% YoY with expansion of portfolio and organic occupancy rates HLP Mainland China rental revenue from office (RMB mn) Rental rev (RMB mn) (%) 600 25% 1H22: 20% of total Mainland revenue 550 20% 500 1H22: +16% YoY 15% 450 10% 400 5% 350 300 0% 1H19 2H19 1H20 2H20
Slide 9: Hong Kong Rental Revenue
Hong Kong Rental Revenue Stabilization has continued, despite COVID resurgence HLP HK rental revenue (HK$mn) Rental rev (HK$mn) 4,500 4,000 3,500 3,000 2H 2H 1H22: 2H HK$1,619mn 2,500 2H YoY - 4% 2,000 HoH - 5% 1,500 1,000 1H 1H 1H 1H 1H 500 0 FY18 FY19 FY20 FY21 FY22 Hang Lung Properties Limited 9
Slide 10: Hong Kong Rental Revenue
Hong Kong Rental Revenue Stabilization is noted in all 3 segments HLP HK rental revenue (HK$mn) and YoY change (%) Rental rev YoY change (HK$mn) (%) 2,000 10% Resid. & S.A. (7% of total) +6% YoY 5% 1,500 0% Retail (59% of total) -3% YoY -5% Office (34% of total) 1,000 -7% YoY -10% -15% 500 -20% 0 -2
Slide 11: ESG Highlights
Sustainability ESG Highlights Report 2021 • In July 2022, we launched a group-level Health & Safety Policy and updated Sustainability Policy & Sustainable Procurement Policy • Arranged sustainable finance amounting to HK$20.5 billion as of 30 June 2022, which accounted for 33% of total debts & avail
Slide 12: Key Milestones and Ratings on Sustainability in 1H2022
Key Milestones and Ratings on Sustainability in 1H2022 Key Milestones since July 2022 Published Sustainability Became a participant of Report 2021, the UN Global Compact 1H2022 including disclosures of 2022 ESG KPIs & Made the second round Updated Sustainability Pledged commitments Arranged sustaina
Slide 13: Board Engagement and Diversity
Board Engagement and Diversity Highly engaged (as of 31 December 2021) ▪ 6 regular Board meetings/year (100% attendance) ▪ 4 Audit Committee meetings/year (100% attendance) ▪ 4 meetings of Audit Committee members with external auditor without the presence of management Board diversity of Hang Lung P
Slide 14: Climate Resilience: The Journey of Decarbonization
Climate Resilience: The Journey of Decarbonization • We became one of Asia's first real estate companies to commit to the Science-Based Targets initiative’s (SBTi’s) Net Zero Standard. We pledge to reduce our greenhouse gas emissions in line with SBTi’s 1.5°C trajectory and to achieve net-zero carbo
Slide 15: A Clear Agenda for the Short, Medium and Long Term
A Clear Agenda for the Short, Medium and Long Term • Set Strategic ESG • Define concrete and • Goals: Provide broad • Reach net-zero value KPIs across the quantifiable measures principles governing our chain greenhouse gas Group tied to for all employees for the efforts emissions by no later departm
Slide 16: 2030 Sustainability Goals and Targets
2030 Sustainability Goals and Targets In December 2020, we announced our overarching ambition to become one of the most sustainable real estate companies in the world by 2030, supported by four goals and ten targets to achieve by 2030 4 Priority 4 Goals 10 Targets • Demonstrate best efforts to achie
Slide 17: 25 x 25 Sustainability Targets
25 x 25 Sustainability Targets In December 2021, we announced our 25 x 25 Sustainability Targets. These elaborate on the 2030 goals and targets and provide quantifiable measures to achieve across the business over the next four years No. of Priority Topics addressed Targets • Greenhouse gas (GHG) (s
Slide 18: 28 Strategic ESG KPIs for 2022
28 Strategic ESG KPIs for 2022 No. of The 28 strategic ESG KPIs Priority Strategic Examples of topics addressed ESG KPIs • Approved by Sustainability Steering Committee & Vice • Scopes 1, 2 and 3 GHG emissions reductions Chair Climate • Renewable energy 8 Resilience • Electric vehicle parking • Sust
Slide 19: Climate Resilience: Scope 1 & 2 GHG Emissions
Climate Resilience: Scope 1 & 2 GHG Emissions Scope 1 & 2 emissions progress (tCO2e/m2): 2018-2030 Progress in 2021 • All properties contribute to an annual Greenhouse Gas (GHG) Mitigation Plan • Achieved scope 1 & 2 GHG emissions intensity reduction of 28.9% in 2021 compared with 2018 baseline Demo
Slide 20: Climate Resilience: Scope 3 GHG Emissions
Climate Resilience: Scope 3 GHG Emissions Progress in 2021 Scope 3 emissions breakdown in 2020 • Completed our first comprehensive inventory of Scope 3 emissions (for 2020) in 2021 • Set embodied carbon reduction target & tenant carbon reduction target for 2025 Source of 2025 2025 target Target How
Slide 21: Climate Resilience: Renewable Energy
Climate Resilience: Renewable Energy Spring City 66 is 100% powered by renewable energy • In Dec 2021, we announced that Spring City 66 in Kunming is now 100% powered by renewable energy • Spring City 66 is also the first commercial complex in Yunnan Province to achieve net-zero carbon emissions in
Slide 22: Climate Resilience: Climate Adaptation
Climate Resilience: Climate Adaptation Progress in 2021 Key Findings • Partnered with a climate risk consultancy to complete property- Significant Extreme heat rainfall flood exposure in specific physical climate risk Flooding Heat Wave exposure at several properties assessments across our portfolio
Slide 23: Resource Management
Resource Management Category Key Achievements in 2021 Key Initiatives for 2022 Reduction Targets for 2025 • Our electricity intensity in • Retro-commissioning at multiple • 18% cumulative reduction Energy 2021 was 10.7% below our properties in electricity intensity (kWh/ 2018 baseline • Chiller plan
Slide 24: Resource Management: Electricity Intensity Reduction
Resource Management: Electricity Intensity Reduction Electricity intensity reduction from 2018-2021 Case study: Olympia 66’s reduction in electricity intensity Key internal measures In 2021, Olympia 66 achieved a 24% electricity intensity reduction by adjusting equipment setting, shutting down unnec
Slide 25: Resource Management: Green Building Certifications
Resource Management: Green Building Certifications Case study: Westlake 66 Received 38 green building certifications or pre-certifications • Received our first LEED (Building Design and (as of 30 June 2022) >77% Construction Core and Shell • 32 LEED Platinum/Gold construction floor Development v4) P
Slide 26: Wellbeing: Employee Wellbeing
Wellbeing: Employee Wellbeing Engagement Diversity & Inclusion • Conducted a company-wide • About 38.4% of executive employees employee engagement survey are female in 2021 in May 2021 to obtain feedback • Have plans to support top female on corporate culture, work-life executives in their leadershi
Slide 27: Wellbeing: Response to COVID-19
Wellbeing: Response to COVID-19 Employees Customers • Adopted flexible work arrangements as well as reporting and self-quarantine • Offered support, both financially and non-financially, during the protocol from early 2020 business restrictions caused by COVID-19 • Sanitized and disinfected our prop
Slide 28: Wellbeing: Response to COVID-19 (Cont'd)
Wellbeing: Response to COVID-19 (Cont’d) Hang Lung COVID-19 Relief Fund 2.0 Hong Kong Mainland • In Feb 2022, we made our second donation valued HK$10 million under the “Hang • Announced a further injections of Lung COVID-19 Relief Fund 2.0” to provide targeted support for urgent public RMB3 million
Slide 29: Wellbeing: Wellness Certifications
Wellbeing: Wellness Certifications • The building area applying for WELL and WELL Health and Safety Rating (HSR) is around 37 million square feet – nearly 64% of total construction floor area will be certified with WELL or WELL HSR by 2023 • One of our projects under development, 228 Electric Road R
Slide 30: Wellbeing: Community Investment
Wellbeing: Community Investment Hang Lung Mathematics Awards (HLMA) Hang Lung As One volunteer teams • Founded in 2004, the biennial HLMA aims to empower • Over 1,500 active volunteers secondary school students in Hong Kong to realize • Organized 138 volunteer their creative potential in mathematics
Slide 31: Community Investment
Community Investment Chair Mr. Ronnie Chan awarded the Grand Chair Mr. Ronnie Chan awarded the 2018 Dwight Bauhinia Medal (GBM), the highest honor D. Eisenhower Global Leadership Award bestowed, by the Government of the Hong Kong by the Business Council for International Understanding Special Admini
Slide 32: Community Investment
Community Investment Rebuilding of Jianfu Palace Garden & Hang Lung Center for Real Estate, The Hall of Rectitude Complex in Beijing Tsinghua University, Beijing • Projects funded by the China Heritage Fund, a non-profit • The Hang Lung Center for Real Estate serves as an organization created by Cha
Slide 33: Chan Family's Philanthropy
Chan Family’s Philanthropy Harvard T.H. Chan School of Public Health University of Southern California • The Morningside Foundation, founded by Chair Mr. Ronnie • Chair Mr. Ronnie Chan and his wife Chan and Non-Executive Director of Hang Lung Group Mrs. Barbara Chan made a USD20 Dr. Gerald Chan, mad
Slide 34: Sustainable Transactions: Sustainable Finance
Sustainable Transactions: Sustainable Finance Arranged Sustainable finance Accounted for 33% amounting to of total debts & available Categories of Eligible Green Projects (with each category defined in Green Finance Framework) HK$20.5 billion facilities (as of 30 June 2022, for HLP) • Green Building
Slide 35: Sustainable Transactions: Collaboration with Suppliers & Tenants
Sustainable Transactions: Collaboration with Suppliers & Tenants Supplier Collaboration Tenant Collaboration Key Achievements in 2021 Key Achievements in 2021 • Collaborated with tenants on multiple community • For operations, developed a sustainable sustainability initiatives and enhanced our ESG p
Slide 36: Mainland China Portfolio
Mainland China Portfolio Hang Lung Properties Limited 36
Slide 37: Luxury Malls on the Mainland
Luxury Malls on the Mainland 100% Powered by Renewable Energy Grand Gateway 66 Plaza 66 Forum 66 Center 66 Olympia 66 Spring City 66 Heartland 66 Shanghai Shenyang Wuxi Dalian Kunming Wuhan Shanghai Completion Year 1999 to 2006 2001 to 2006 2012 onwards 2013 onwards 2015 2019 onwards 2020 onwards Re
Slide 38: Sub-luxury Malls on the Mainland
Sub-luxury Malls on the Mainland Palace 66 Parc 66 Riverside 66 Shenyang Jinan Tianjin Completion Year 2010 2011 2014 Rental Revenue (6 months ended June 30, 2022) - Mall RMB82M RMB151M RMB83M Rental Revenue Change (YoY in RMB) 9% 1% 1% Occupancy (at June 30, 2022) - Mall 86% 92% 83% Hang Lung Pr
Slide 39: New Luxury Malls outside Shanghai: Heartland 66, Wuhan
New Luxury Malls outside Shanghai Heartland 66, Wuhan Mall opened in Mar 2021 Key luxury brands opened in 2022: Impressive assortment of luxury brands since mall opened in 2021 Opened in July 2022 Hang Lung Properties Limited 39
Slide 40: New Luxury Malls outside Shanghai: Olympia 66, Dalian
New Luxury Malls outside Shanghai Olympia 66, Dalian 120% Tenant Sales 1H22 (YoY) A rich line-up of top notch key luxury tenants opened on L1: Opened in 2022 Hang Lung Properties Limited 40
Slide 41: Two Luxury Malls in Shanghai
Two Luxury Malls in Shanghai ▪ Shanghai’s citywide lockdown in April and May 2022 ▪ Both revenue and tenant sales recorded a healthy recovery in the month of June. We will roll out more marketing and promotion initiatives to accelerate the recovery “Home to Luxury” brands including: Plaza 66 Shangha
Slide 42: Luxury Malls Outside Shanghai
Luxury Malls Outside Shanghai Forum 66 Key brands Upcoming Shenyang opened in 2022: key brand: 16% Tenant Sales 1H22 (YoY) Key brands Upcoming Center 66 opened in 2022: key brands: Wuxi 1% Tenant Sales 1H22 (YoY) Spring City 66 Key brands Upcoming Kunming opened in 2022: key brands: 1% Tenant
Slide 43: Sub-luxury Malls on the Mainland
Sub-luxury Malls on the Mainland ▪ AEI started in Jun 2021 to pave the way for a stronger Parc 66 mix of affordable luxury and beauty brands Jinan Key opening in 2H 22% Tenant Sales 1H22 (YoY) ▪ Completion in phases from 2022 onwards Palace 66 Upcoming key brands: Shenyang 26% Tenant Sales 1H22
Slide 44: Mainland China Office Portfolio
Mainland China Office Portfolio Plaza 66, Shanghai Forum 66, Shenyang Office Occupancy (at June 30, 2022) 96% (-1% vs end-21) 92% (same vs end-21) ▪ LVMH ▪ Bank of China Multinational Corporations ▪ Everbright Securities ▪ HSBC and Leading Domestic Companies ▪ Cushman & Wakefield ▪ Siemens ▪ KPMG ▪
Slide 45: Mainland China Office Portfolio
Mainland China Office Portfolio 100% Powered by Renewable Energy Center 66, Wuxi Spring City 66, Kunming Heartland 66, Wuhan Office Occupancy 88% (same vs end-21) 79% (+8% vs end-21) 61% (+4% vs end-21) (at June 30, 2022) ▪ AIA ▪ Alibaba Group ▪ CITIC-Prudential Insurance Multinational Corporations
Slide 46: Mainland China Residences Portfolio
Mainland China Residences Portfolio Heartland Residences Center Residences Wuhan Wuxi ▪ End 2023 onwards ▪ 2024 onwards targeted completion targeted completion ▪ Comprises 3 towers offering more than 490 units ▪ Comprises 2 towers with approx. 600 units ▪ Pre-sale marketing activities for Tower 3 co
Slide 47: Mainland China Hotel Portfolio
Mainland China Hotel Portfolio Conrad Shenyang (at Forum 66) Grand Hyatt Kunming (at Spring City 66) ▪ Opened in 2019 ▪ Targeted Year of Opening: 2023 Curio Collection by Hilton (at Center 66) Mandarin Oriental Hangzhou (at Westlake 66) ▪ Targeted Year of Opening: 2024 ▪ Targeted Year of Opening: 20
Slide 48: Mainland China Projects Under Development
Mainland China Projects Under Development Heartland 66 Spring City 66 Center 66 Westlake 66 Forum 66 Wuhan Kunming Wuxi Hangzhou Shenyang Dec 2006 / Land use right signed Sep 2013 Nov 2011 May 2018 Aug 2006 May 2009 Mall, Office, Mall, Office, Hotel, Mall, Office, Hotel, Mall, Office, Mall, Office,
Slide 49: Hong Kong Portfolio
Hong Kong Portfolio Hang Lung Properties Limited 49
Slide 50: Hong Kong Rental Performance
Hong Kong Rental Performance Hong Kong Rental Revenue (HK$mn) Hong Kong Occupancy (%) Maintained at satisfactory level Rental rev (HK$mn) 1H22: 110% 2,000 HK$1,619mn 100% 1,600 Resi.&S.A.: Resi.&S.A.: 98% 7% of total 7% of total 90% Office: Office: 87% 1,200 35% of total 34% of total 80% 800 70% 70%
Slide 51: Hong Kong Investment Properties
Hong Kong Investment Properties Central Portfolio Peak Galleria ▪ Comprising 4 office buildings with diversified tenant profile ▪ A tourist landmark, with pet-friendly features to attract local pet lovers Standard Chartered Bank Building 1 Duddell Street Printing House Baskerville House ▪ A fine-din
Slide 52: Hong Kong Investment Properties
Hong Kong Investment Properties Kornhill Plaza / Causeway Bay Portfolio Kornhill Apartments ▪ An elite shopping destination featuring numerous internationally ▪ A community mall in Quarry Bay offering the renowned fashion, beauty, and lifestyle brands largest Japanese department store in HK Fashion
Slide 53: Hong Kong Investment Properties
Hong Kong Investment Properties Mongkok Portfolio Amoy Plaza ▪ Continued to solidify the area’s position as the place “Where Trends Meet” ▪ A one-stop community hub in Kowloon East Gala Place Grand Plaza Hang LungRetail 53 Properties Limited Office
Slide 54: Hong Kong Investment Properties (Under Development)
Hong Kong Investment Properties (Under Development) 228 Electric Road* Redevelopment North Point ▪ Jointly developed with Hang Lung Group Limited Grade A office tower / Usage Retail area on podium floors Total Gross Floor Area 105,000 sq ft Expected Completion 2023 Green Building • LEED Pre-certific
Slide 55: Hong Kong Residential Properties at Prime Locations
Hong Kong Residential Properties at Prime Locations For Sale No. of As of June 30, 2022 unsold units Remarks Total 125 units were pre-sold, The Aperture Revenue is expected to be (under development) 169 recognized in 2023 upon completion 23-39 Blue Pool Profit for the sale of one house 10 was recogn
Slide 56: Hong Kong Residential Properties: The Aperture
Hong Kong Residential Properties Scan to view the website The Aperture Location Kowloon Bay Total no. of units 294 residential units No. of pre-sold units (at June 30, 2022) 125 units Targeted Completion 2023 Taken in June 2022 Green Building BEAM Plus (New Building) Certification Provisional Gold c
Slide 57: Hong Kong Residential Properties: Blue Pool Road
Hong Kong Residential Properties Scan to view the website 23-39 Blue Pool Road Location Happy Valley Saleable Area 4,571 – 4,599 sq ft per Unit No. of completed units 10 semi-detached houses available for sale Project Details ▪ 3 floors plus roof floor (at June 30, 2022) Green Building LEED for Home
Slide 58: Hong Kong Residential Properties (Investment Properties)
Hong Kong Residential Properties (Investment Properties) The Summit Location Mid-Levels Total no. of units 54 duplex suites Burnside Villa Location Southern District Total no. of units 56 units Hang Lung Properties Limited 58
Slide 59: Appendix
Appendix Hang Lung Properties Limited 59
Slide 60: Hang Lung Properties – Financial Highlights
Hang Lung Properties – Financial Highlights 1-6/2022 1-6/2021 Property Property Property Property Total Leasing Sales Total (HK$M) Leasing Sales Revenue 4,986 316 5,302 4,975 - 4,975 - Mainland China 3,367 - 3,367 3,295 - 3,295 - Hong Kong 1,619 316 1,935 1,680 - 1,680 Operating Profit / (Loss) 3,57
Slide 61: Hang Lung Properties – Financial Position
Hang Lung Properties – Financial Position 30/6/2022 31/12/2021 At June 30, 2022 HK$M HK$M Investment Properties 172,339 177,456 - Mainland China 112,582 117,649 - Hong Kong 59,757 59,807 Investment Properties under development 22,268 22,399 Properties for sale 11,019 10,790 • As of June 30, 2022, to
Slide 62: Investment Property Portfolio: HLP
Investment Property Portfolio: HLP Completed (M sq ft) GFA Hong Kong Portfolio 7M sq ft GFA by usage Geographical Split of Total GFA: 58M sq ft Mainland China Portfolio Shanghai Grand Gateway 66 37.3M sq ft 1.8 Retail (Exclude car parks) Office Plaza 66 2.9 51% Hong Kong 33% Shenyang Palace 66 2.0 F
Slide 63: Hang Lung Group – Financial Highlights
Hang Lung Group – Financial Highlights 1-6/2022 1-6/2021 Property Property Property Property Total Leasing Sales Total (HK$M) Leasing Sales Revenue 5,289 316 5,605 5,275 - 5,275 - Mainland China 3,607 - 3,607 3,526 - 3,526 - Hong Kong 1,682 316 1,998 1,749 - 1,749 Operating Profit / (Loss) 3,796 133
Slide 64: Hang Lung Group – Financial Position
Hang Lung Group – Financial Position 30/6/2022 31/12/2021 At June 30, 2022 HK$M HK$M Investment Properties 181,149 186,582 - Mainland China 119,576 124,962 - Hong Kong 61,573 61,620 Investment Properties under development 22,268 22,399 Properties for sale 11,040 10,811 • As of June 30, 2022, total c
Slide 65: Investment Property Portfolio: HLG
Investment Property Portfolio: HLG Note: Properties held via HLP are excluded from this session 9 Wing Hong Street Luen Cheong Can Centre Tai Hing Gardens Grand Gateway 66 Cheung Sha Wan, HK Tuen Mun, HK Tuen Mun, HK Puxi, Shanghai Office Tower I & Office Office Retail portion Serviced Apartments 22
Slide 66: Grand Gateway 66, Above Xujiahui Subway Station, Puxi, Shanghai
Grand Gateway 66, Above Xujiahui Subway Station, Puxi, Shanghai Rental Revenue Occupancy Key tenants (6 months ended June 30, 2022) (at June 30, 2022) Office Tower I RMB125M 98% 1% YoY Serviced RMB74M 91% Apartments 10% YoY Mall (held via HLP) RMB553M 99% 2% YoY Hang Lung Properties Limited 66
Slide 67: End of Presentation
End of Presentation Disclaimer 1. All information and data are provided for information purposes only. All opinions included herein are based on information available as of the date hereof and are subject to change without notice. There is no guarantee, representation or warranty provided for accura