Interim Report 2024/25

香港啟德天璽‧天

Smartphone and tablet users can download PDF version via QR Code Reader

Interim Report 2024/25 SUN HUNG KAI PROPERTIES LIMITED 1

Board of Directors and Committees

BOARD OF DIRECTORS

COMMITTEES

2 Interim Report 2024/25 SUN HUNG KAI PROPERTIES LIMITED

Financial Highlights and Corporate Information

FINANCIAL HIGHLIGHTS

Notes:

1. Underlying profit attributable to the Company's shareholders excluded the net effect of changes in the valuation of investment properties
2. Including contributions from joint ventures and associates

CORPORATE INFORMATION

CHOICE OF LANGUAGE OR MEANS OF RECEIPT OF CORPORATE COMMUNICATIONS

This interim report is now available in printed form in English and in Chinese, and on the website of the Company.

If (i) shareholders, who have received or chosen to receive or are deemed to have consented to receive this interim report by electronic means, wish to receive printed copies; or (ii) shareholders for any reason have difficulty in receiving or gaining access to this interim report on the Company's website, they may obtain printed copies free of charge by sending a written request to the Company c/o the Share Registrar, Computershare Hong Kong Investor Services Limited, by post to 17M Floor, Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong or by email at shkp@computershare.com.hk.

For shareholders who wish to change their choice of language or means of receipt of the Company's future corporate communications free of charge, they may at any time notify the Company by giving reasonable notice (of not less than 7 days) in writing to the Company c/o the Share Registrar by post or by email or by completing and returning the accompanying Reply Form.

Interim Report 2024/25 SUN HUNG KAI PROPERTIES LIMITED 3

Chairman's Statement

I am pleased to present my report to the shareholders.

RESULTS

The Group's underlying profit attributable to the Company's shareholders for the six months ended 31 December 2024, excluding the effect of fair-value changes on investment properties, amounted to HK$10,463 million, compared to HK$8,906 million for the corresponding period last year. Underlying earnings per share were HK$3.61, compared to HK$3.07 for the same period last year.

Reported profit and reported earnings per share attributable to the Company's shareholders were HK$7,523 million and HK$2.60 respectively, compared to HK$9,145 million and HK$3.16 for the corresponding period last year. The reported profit for the period included a decrease in fair value of investment properties net of deferred taxation and non-controlling interests of HK$2,034 million, compared to an increase of HK$432 million for the same period last year.

DIVIDEND

The directors have declared an interim dividend payment of HK$0.95 per share for the six months ended 31 December 2024, the same as the corresponding period last year. The dividend will be payable on 20 March 2025.

BUSINESS REVIEW

Development Profit and Rental Income

Development Profit

For the period under review, the Group's profit generated from property sales reached HK$2,506 million, as compared to HK$2,040 million during the corresponding period last year. Contracted sales during the period totalled about HK$25,500 million in attributable terms.

Rental Income

During the period, the Group's gross rental income, including contributions from joint ventures and associates, decreased by 1% year-on-year to HK$12,280 million, while net rental income decreased by 3% year-on-year to HK$9,004 million.

4 Interim Report 2024/25 SUN HUNG KAI PROPERTIES LIMITED

Chairman's Statement

Property Business - Hong Kong

Land Bank

As at 31 December 2024, the Group's attributable land bank in Hong Kong amounted to about 56.9 million square feet. Of these, about 37.6 million square feet were diversified completed properties, an overwhelming majority of which were for rental and long-term investment purposes, contributing to the Group's substantial recurring income. Some 12.9 million square feet of the remainder were residential properties under development for sale, which will be adequate to meet the Group's development needs over the medium term.

During the period under review, the Group added two residential sites with a total gross floor area of about 465,000 square feet to its land bank. Details of the additions are shown in the table below.

Adhering to its prudent financial discipline in land bank replenishment, the Group acquired two residential sites through public tenders subsequent to the end of the review period. In January 2025, the Group won the tender for a site comprising a total gross floor area of 194,000 square feet in Tai Wai. Boasting tranquillity in a mature community with easy access to public transport and neighbourhood facilities, the site will be developed into a residential development, providing mainly small- and medium-sized units to meet end-user demand. In February 2025, the Group also acquired a harbourfront site located at Tung Chung New Town Extension. Served by the future MTR Tung Chung East Station, the site offers panoramic sea view and design flexibility. It will be developed into a residential project with a total gross floor area of about 401,000 square feet, which together with the planned facilities and amenities in the vicinity will form a new and vibrant community. These additions have brought the Group's land bank to 57.5 million square feet.

Property Development

Driven by lower mortgage interest rates and relaxation of mortgage rules in the second half of 2024, Hong Kong's primary residential market saw solid activity despite a soft domestic economic environment and keen competition. Supported by a continued inflow of talent and students, residential rents have remained resilient, reflecting solid end- user demand for housing.

In Hong Kong, the Group achieved contracted sales of about HK$24,800 million in attributable terms during the period. Major contributors included Cullinan Sky Phase 1 in Kai Tak, Victoria Harbour Phase 2B in North Point, The YOHO Hub II in Yuen Long and NOVO LAND Phase 3B in Tuen Mun. The remaining units from various completed properties such as St Michel in Sha Tin and Dynasty Court in Mid-levels Central continued to receive positive market response.

Interim Report 2024/25 SUN HUNG KAI PROPERTIES LIMITED 5

Chairman's Statement

Guided by its Building Homes with Heart philosophy, the Group continued to demonstrate its commitment to deliver premium quality and customer-centric developments while upholding its reputation as a trusted brand. Through its property management operations and SHKP Club, the Group maintains effective two-way communication with customers, enabling it to closely monitor market trends and understand customer expectations so as to better serve their evolving needs. Attaching great importance to blending nature and wellness elements into its projects, the Group successfully integrates green and smart technologies into the daily lives of residents to elevate its customer services and enhance convenience for residents.

Scheduled for completion in phases over a number of years, the Group's upcoming Sai Sha project demonstrates its commitment to creating vibrant communities through meticulous long-term planning, which encompasses the strengthening of transport connectivity and the incorporation of innovative, family- and pet-friendly development concepts. Surrounded by scenic mountains and the sea, the residential portion of the development is complemented by the GO PARK Sai Sha, a 1.3 million-square-foot sports-and-commercial complex. Featuring comprehensive facilities that incorporate smart technologies, the project is expected to cater to the different lifestyles of residents of all ages.

Two projects in Hong Kong with an attributable gross floor area of about 852,000 square feet were ready for handover during the period, an overwhelming majority of which were residential properties for sale. Project details are shown in the table below.

An approximate 1.8 million square feet of attributable gross floor area are scheduled for completion in the second half of this financial year, including about 1.3 million square feet of residential premises for sale. The remaining 0.5 million square feet are retail space to be retained for rental and long-term investment.

As at 31 December 2024, the Group's contracted sales yet to be recognized in Hong Kong amounted to HK$30,400 million, of which about HK$20,200 million is expected to be recognized in the second half of this financial year. Most of the related sales proceeds will be received when the respective units are delivered.

6 Interim Report 2024/25 SUN HUNG KAI PROPERTIES LIMITED

Chairman's Statement

Property Investment

During the period under review, the Group's property investment portfolio in Hong Kong continued to provide a sizable and stable recurring income to the Group. Gross rental income, including contributions from joint ventures and associates, registered a modest decrease of 1% year-on-year to HK$8,813 million while overall occupancy of the portfolio remained satisfactory.

The uncertain economic outlook and the strength of the Hong Kong dollar have affected consumer sentiments. These factors, along with changing consumption habits, have posed challenges to the local retail market. Nevertheless, driven by various mega events and favourable policies, including the resumption and expansion of the multiple-entry Individual Visit Scheme for Shenzhen residents, the foot traffic at malls has shown signs of improvement over the past few months. During the period, the rental performance of the Group's retail portfolio was resilient with overall occupancy remaining at around 93%.

Bolstering the competitive edge of the Group's malls remained a key strategy to stay at the forefront of the changing operating environment. Riding on its well-established retail network and reputation, the Group has stepped up its efforts to attract mainland and overseas brands to open their debut stores in its malls across populous districts. In addition, the Group's seasoned leasing teams regularly refined the malls' tenant mix and store layouts, enriching their offerings and diversity to meet evolving consumer preferences. Creative and interactive marketing initiatives, ranging from busking to pyrotechnics, have been rolled out periodically in collaboration with tenants to drive footfall and sales.

Adapting to the latest market trends, the Group continued to upgrade and reconfigure its properties and enhance service quality. Apart from pet- and family-friendly areas, the malls have introduced additional leisure space and recreational facilities to enrich the experiences of visitors. At New Town Plaza in Sha Tin, Chill Park, a brand new outdoor space with garden trails, was opened in September 2024. A revamp of the mall's outdoor space on the seventh floor is scheduled for completion in mid-2025, offering additional green and interactive elements.

While promotion campaigns targeting tourists have been rolled out at various malls, the Group leveraged The Point, the integrated loyalty programme for SHKP malls, to enhance shoppers' experiences for attracting tourists and retaining local customers. Spending by loyal members remained resilient in the evolving retail sector, while the successful launch of Instant Point Earn has driven members' spending and boosted sales. During the period, The Point mobile app was upgraded with a new interface for easy access to tenant promotions and latest information based on members' spending and preferences. A VIP programme has recently been launched to reward premium members with a range of exclusive privileges, including EV charging booking, extra parking hours and bonus points, and a soon-to- be-launched VIP lounge. In addition, The Point continued to leverage the Group's hotels and other business arms to enrich its member privileges and customer experience.

The office leasing market in Hong Kong remained under pressure in light of a sluggish economic outlook and weak demand. While new supply in core business districts continued to weigh on office rents, the current demand-supply imbalance is expected to improve over the medium term. Nevertheless, the Group's office portfolio maintained an average occupancy of about 90% during the period.

Known for its high green-building standards and professional property management, the Group's premium office portfolio remained competitive under the trend of flight-to-quality. The Group's grade-A offices in prime locations, such as IFC in Central and ICC in West Kowloon continued to be ideal upgrading options for financial institutions and government-related bodies. In spite of ample new supply in the district, the Millennium City office cluster in Kowloon East maintained relatively stable occupancy. To bolster the key strength of its office portfolio, the Group will continue to elevate the building quality and green-building standards through upgrades.

Interim Report 2024/25 SUN HUNG KAI PROPERTIES LIMITED 7

Chairman's Statement

Tapping the growing accommodation demand from young professionals and incoming talent, TOWNPLACE WEST KOWLOON, which offers both short- and long-stay leasing options, registered encouraging occupancy. Riding on the same trend, Vega Suites in Tseung Kwan O is upgrading part of its serviced suites in phases with target completion in early 2026. The Group will further review its existing property rental portfolio and enhance its value and rental contribution via asset enhancements and the incorporation of new-to-market concepts.

Looking ahead, the Group's recurrent income base will be further strengthened as more investment properties come on stream in the next two to three years. The first phase of the 500,000-square-foot shopping mall beneath The Millennity in Kwun Tong will open in the second quarter of 2025. Pre-leasing is progressing well. A selection of speciality restaurants and shops, including those with experiential elements, will be available in the mall upon its full opening. The new mall is expected to synergize with the Group's APM mall and the Millennium City office cluster in the vicinity. In addition, Cullinan Sky Mall, the 220,000-square-foot retail podium connected to MTR Kai Tak Station, is scheduled to open in phases beginning in the second half of 2025.

Another key project under development, the High Speed Rail West Kowloon Terminus Development, comprises grade-A offices and premium retail space atop the city's only high-speed rail station and with easy access to the Airport Express and MTR lines. The Group is dedicated to differentiating itself in the market through the incorporation of new and sustainable designs in its landmark projects. Putting this idea into practice, the Group incorporated plenty of greenery and human-centric designs that promote wellness and a comfortable working and leisure environment in the project, which was named the World's Best Real Estate Development in Euromoney's Real Estate Awards 2024 in recognition of its excellence. Leveraging its unrivalled transport connectivity and top-notch sustainable building features, the project's office portion International Gateway Centre (IGC) has attracted multinational financial institutions as its key tenants. Construction is progressing on schedule, with target handover starting in early 2026. The 603,000-square-foot shopping mall beneath IGC will introduce high-end retail and dining options.

In the vicinity of IGC, the Artist Square Towers Project in the West Kowloon Cultural District will provide premium office space that serves diverse industries, including cultural and creative organizations. The superstructure work of the project has begun. These two West Kowloon projects under construction are expected to complement the Group's well-established ICC upon their completion, forming a unique and green commercial hub in the Greater Bay Area.

Property Business - Mainland

Land Bank

As at 31 December 2024, the Group's total attributable land bank on the mainland stood at about 66.4 million square feet, of which about 21.2 million square feet were completed properties mostly held for rental and long-term investment purposes. A vast majority of these are premium integrated projects located in core business hubs in first-tier and leading second-tier cities, particularly favoured by a discerning clientele.

In addition, the Group held about 45.2 million square feet of properties under development on the mainland, of which over 50% will be developed into quality residential units and office space for sale. The Group will focus on developing its existing projects on the mainland while dedicating itself to enhancing quality and services to captivate the hearts of customers in a challenging market.

8 Interim Report 2024/25 SUN HUNG KAI PROPERTIES LIMITED