Presentation 6th March 2015
2014 Review Strong underlying profit Increased contribution from commercial portfolio Moderately reduced residential performance despite strong profits from Hong Kong and mainland China Stable asset values 1
Highlights 2013 2014 US$935m Underlying profit attributable to shareholders US$930m US$255m Non-trading items US$397m US$1,190m Profit attributable to shareholders US$1,327m US 39.73 Underlying earnings per share US 39.52 US 50.56 Earnings per share US 56.42 US$11.41 NAV per share US$11.71 US 12.00 Final dividend per share US 13.00 US 18.00 Total dividend per share US 19.00 2
Commercial Property 3
Commercial Portfolio ( 000 sq. ft NFA) HKL s Share Office Retail Hotel Total Hong Kong 4,142 592 143 4,877 Macau - 94 151 245 Singapore 1,651 134-1,785 Jakarta 661 66-727 Hanoi 105 11-116 Bangkok 27 61-88 Others 71-312 383 TOTAL 6,657 958 606 8,221 4
Hong Kong 1. One Exchange Square 2. Two Exchange Square 3. Three Exchange Square 4. The Forum 5. Jardine House 6. Chater House 7. Alexandra House 8. Gloucester Tower 9. Edinburgh Tower 9a. The Landmark Mandarin Oriental 10. York House 11. Landmark Atrium 12. Prince s Building 5
Hong Kong Central Grade A Office Rental Index Index 180 160 140 120 100 80 2010 2011 2012 2013 2014 Source: Jones Lang LaSalle 6
Hong Kong Central Grade A Office Market m sq. ft 2.5 2 1.5 1 0.5 0 New supply Net take up Vacancy Vacancy % 15 12 9 6 3 0-0.5 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 Source: Jones Lang LaSalle Disclaimer: The above forecast shall be regarded solely as a general guide. No representation is made nor responsibility accepted by Jones Lang LaSalle for the accuracy of the whole or any part whatsoever. 7
Hong Kong Grade A Office Market m sq. ft 10 8 6 4 2 0 New supply Net take up Vacancy Vacancy % 15 12 9 6 3 0-2 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 Source: Jones Lang LaSalle Disclaimer: The above forecast shall be regarded solely as a general guide. No representation is made nor responsibility accepted by Jones Lang LaSalle for the accuracy of the whole or any part whatsoever. 8
Hongkong Land Central Portfolio: Office 2012 2013 2014 Average Net Rent (HK$ psf/month) 90 99 102 Year-end Vacancy 3.4% 5.0% 5.4% Weighted Average Lease Expiry (years) 3.7 3.6 3.4 9
Hong Kong: Office Tenant Profile Property 6% Trading 2% Governments 1% Accounting 8% Others 13% Banks and other financial services 39% Legal 31% 10
Hong Kong: Expiration and Interim Rent Revisions 2015 2016 2017 Total lettable office area subject to expiration/rent revisions ( 000 sq. ft) 1,034 865 1,456 % of area subject to expiration/rent revisions 25% 21% 35% Average expiring net rent (HK$ psf/month) 95 105 104 11
Hongkong Land Central Portfolio: Retail 2012 2013 2014 Average Net Rent (HK$ psf/month) 171 201 214 Year-end Vacancy 0% 0% 0% Weighted Average Lease Expiry (years) 2.5 2.4 2.8 Note: Vacancy excludes areas under renovation. 12
Macau One Central (47%-owned) Retail component 96% let 5% increase in average rent 13
Singapore One Raffles Link (100%-owned) One Raffles Quay (33%-owned) Marina Bay Financial Centre (33%-owned) 14
Singapore CBD Grade A Office Market m sq. ft 5 4 3 2 1 0 New supply Net take up Vacancy Vacancy % 15 12 9 6 3 0-1 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 CBD Raffles Place, Shenton Way, Marina Bay & Marina Centre Source: Jones Lang LaSalle Disclaimer: The above forecast shall be regarded solely as a general guide. No representation is made nor responsibility accepted by Jones Lang LaSalle for the accuracy of the whole or any part whatsoever. 15
Singapore Commercial Portfolio ( 000 sq. ft NFA) Office Retail Total HKL s Share One Raffles Link 239 73 312 312 One Raffles Quay 1,330 4 1,334 445 Marina Bay Financial Centre 2,906 179 3,085 1,028 TOTAL 4,475 256 4,731 1,785 16
Singapore: Office Tenant Profile Natural resources 8% Accounting 3% Others 9% Legal 5% Banks and other financial services 75% 17
Singapore: Office Average Rents and Occupancy 2012 2013 2014 Average Gross Rent (S$ psf/month) 8.7 9.1 9.2 Year-end Vacancy 5.6% 1.7% 1.7% Weighted Average Lease Expiry (years) 6.6 5.9 5.5 Note: According to local market practice, the average office rent includes management charges. 18
Singapore: Expiration and Interim Rent Revisions 2015 2016 2017 HKL s Share: Total lettable office area subject to expiration/rent revisions ( 000 sq. ft) 120 311 317 % of area subject to expiration/rent revisions 7% 19% 19% Average expiring rent (S$ psf/month) 9.5 11.1 9.2 Note: According to local market practice, the average office rent includes management charges. 19
Jakarta Jakarta Land (50%-owned) Existing portfolio features 135,000 sq. m. WTC 3 Average gross rent: US$24.0 psm per month (2013: US$21.6 psm per month) Occupancy: 95.4% Construction begun on new tower, WTC 3 Strong demand for office space 20
Hanoi and Bangkok Central Building (71%-owned) Gaysorn (49%-owned) 63 Ly Thai To (74%-owned) 21
Phnom Penh EXCHANGE SQUARE (100%-owned) Mixed-use complex Heart of Phnom Penh Completion: 2017 22
Beijing WF CENTRAL (90%-owned) Prestigious retail centre, which includes a small luxury hotel 43,000 sq. m. lettable retail area Completion: end-2016 23
Beijing CBD (30%-owned) Prime Grade A office 120,000 sq. m. lettable area Completion: 2019 24
Residential Property 25
Hong Kong Serenade Final 14 units sold and handed over in 2014 26
Macau One Central (47%-owned) Final five units handed over in 2014 27
Mainland China Shenyang Chengdu Beijing Chongqing Background image from Google Earth Background image from Google Earth 28
Mainland China Completed Projects, Beijing Project Project Type Maple Place Maple Place (90%) Central Park (40%) 16 units handed over in 2014 64 units available for future sale, mostly leased 72 units of serviced apartments Central Park 29
Mainland China Development Projects Summary Project Interest Project Type Bamboo Grove, Chongqing 50% Primarily Residential Landmark Riverside, Chongqing 50% Residential (76%), Office, Retail & Others Yorkville South, Chongqing 100% Primarily Residential Yorkville North, Chongqing 100% Residential (74%), Office, Retail & Others Central Avenue, Chongqing 50% Residential (66%), Office & Retail Chengdu Project 50% Residential (46%), Office (14%), Retail (17%), Hotel & Serviced Apartments (23%) Shenyang Projects 50% Primarily Residential 30
Mainland China Development Projects Summary HKL s Share Project Year of Acquisition Site Area (ha) Developable Area (m sq. m.) Constructed (m sq. m.) Under Construction (m sq. m.) Bamboo Grove, Chongqing 2005 39 0.73 0.54 0.09 Landmark Riverside, Chongqing 2009 17 0.75 0.10 0.07 Yorkville South, Chongqing 2010 39 0.88 0.28 0.29 Yorkville North, Chongqing 2011 54 1.09 0.16 0.26 Central Avenue, Chongqing 2013 20 0.55-0.04 Chengdu Project 2010 10 0.45 0.03 0.12 Shenyang Projects 2007 58 1.01 0.13 - TOTAL 237 5.46 1.24 0.87 31
Mainland China Revenue Recognised US$m 700 600 500 400 300 200 100 0 Chongqing Chengdu Shenyang Beijing $621m $451m $213m 2012 2013 2014 Note: The above chart includes HKL s share of Joint Ventures & Associates. 32
Mainland China Contracted Sales US$m 700 600 500 400 300 200 100 0 Chongqing Chengdu Shenyang Beijing $632m $635m $429m 2012 2013 2014 Note: The above chart includes HKL s share of Joint Ventures & Associates. 33
Mainland China Contracted Sales US$m Chongqing Chengdu Shenyang Beijing 500 400 $369m $373m 300 200 100 $200m $229m $263m $262m 0 1H '12 2H '12 1H '13 2H '13 1H '14 2H '14 Note: The above chart includes HKL s share of Joint Ventures & Associates. 34
Mainland China Contracted Sales At 31st December 2014, US$533m (2013: US$534m) in sold but unrecognised contracted sales Some 80% of contracted sales scheduled to be recognised in 2015 35
Singapore Choa Chu Kang Grove Parcels A & B Terrasse Ripple Bay LakeVille Palms @ Sixth Avenue J Gateway Hallmark Residences Uber 388 Marina Bay Suites 36
Singapore Completed Project Marina Bay Suites (33%-owned) 221 units, 0.47m sq. ft Completion: 2013 Three units handed over in 2014 16 units available for sale 37
Singapore Completions in 2014 Project Units GFA ( 000 sq. ft) Sold Terrasse Terrasse 414 476 100% Uber 388 95 98 100% Uber 388 38
Singapore Projects for Completion from 2015 Project Units GFA ( 000 sq. ft) Estimated Completion Date Pre-Sold Palms @ Sixth Avenue 32 109 2015 - Completed 56% Hallmark Residences 75 110 2015 - Completed 88% Ripple Bay 679 672 2015 100% J Gateway 738 576 2016 100% LakeVille 699 741 2016 53% Choa Chu Kang Grove 1,327 1,240 2018 Not launched TOTAL 3,550 3,448 39
Indonesia Nava Park, Greater Jakarta (49%-owned) JV with PT Bumi Serpong Damai Site area: 67 ha Southwest of central Jakarta 223 units launched for sale; 59% pre-sold Completion of 1st phase: 2016 40
Indonesia Anandamaya Residences (40%-owned) JV with Astra International 509 units of luxury apartments; 78% pre-sold Completion: 2018 41
Philippines Roxas Triangle (40%-owned) JV with Ayala Land 182 units; 70% pre-sold Completion: 2019 42
Financial Results 43
Consolidated Profit and Loss Account (US$m) 2013 2014 1,857 Revenue 1,876 (940) Net operating costs (809) 917 Operating profit 1,067 235 Share of results of joint ventures 123 (64) Net financing charges (69) (149) Tax (187) (4) Non-controlling interests (4) 935 Underlying profit 930 255 Non-trading items 397 1,190 Profit attributable to shareholders 1,327 44
Revenue (US$m) 2013 2014 925 Commercial revenue 961 932 Residential revenue 915 1,857 Total 1,876 45
Underlying Profit by Business (US$m) 2013 2014 914 Commercial property 953 413 Residential property 398 (60) Corporate expenses (62) 1,267 1,289 (103) Net financing charges (103) (224) Tax (247) (5) Non-controlling interests (9) 935 Underlying profit 930 46
Commercial Property Underlying Profit (US$m) 2013 2014 Greater China 743 - Hong Kong 772 29 - Mainland China & Macau 29 Southeast Asia & Others 122 - Singapore 130 20 - Others 22 914 Total 953 47
Residential Property Underlying Profit (US$m) 2013 2014 Greater China 19 - Hong Kong 69 116 - Mainland China & Macau 179 Southeast Asia & Others 278 - Singapore 149 - - Others 1 413 Total 398 48
Consolidated Cash Flow (US$m) 2013 2014 908 Operating activities 699 (378) Investing activities 88 (404) Financing activities (426) 122 Others 7 248 Decrease in net debt 368 (3,273) Net debt at beginning of period (3,025) (3,025) Net debt at end of period (2,657) 49
Operating Activities (US$m) 2013 2014 917 Operating profit excluding non-trading items 1,067 (77) Net interest paid (81) (139) Tax paid (134) (367) Payments for residential sites (429) (303) Development expenditure on residential projects (454) 918 Proceeds from residential sales 962 151 Dividends received from joint ventures 153 (192) Others (385) 908 699 50
Investing Activities (US$m) 2013 2014 (40) Major renovations capex (38) (422) Funding of joint ventures (216) 104 Loan repayments from joint ventures 479 (134) Development expenditure (137) 114 Others - (378) 88 51
Consolidated Cash Flow (US$m) 2013 2014 908 Operating activities 699 (378) Investing activities 88 Financing activities (397) - Dividends paid by the Company (421) (7) - Dividends paid to minority shareholders (5) (404) (426) 122 Others 7 248 Decrease in net debt 368 (3,273) Net debt at beginning of period (3,025) (3,025) Net debt at end of period (2,657) 52
Consolidated Balance Sheet (US$m) 2013 2014 Investment properties 23,583 - Subsidiaries 23,697 4,167 - Joint ventures 4,474 27,750 28,171 Properties held for sale 2,670 - Subsidiaries 2,923 1,247 - Joint ventures 1,372 3,917 4,295 (1,743) Others (2,211) 29,924 Gross assets (excluding cash) 30,255 Financed by: 26,899 - Total equity 27,598 3,025 - Net debt 2,657 29,924 30,255 53
Investment Property Basis of Valuation Capitalisation Rates 2013 1H 2014 2014 Hong Kong Office - Exchange Square 1 & 2 4.00% 4.00% 4.00% Hong Kong Retail - Landmark Atrium 4.50% 4.50% 4.50% Singapore Office - MBFC 3.80% 3.80% 3.75% Note: These capitalisation rates are provided on an indicative basis. 54
Investment Property Carrying Values (US$m) 2013 2014 Greater China 22,302 - Hong Kong 22,336 1,368 - Mainland China & Macau 1,650 Southeast Asia & Others 3,603 - Singapore 3,628 477 - Others 557 27,750 Total 28,171 Note: The analysis includes share of Joint Ventures & Associates. 55
Properties Held for Sale Carrying Values (US$m) 2013 2014 Greater China 62 - Hong Kong 23 2,308 - Mainland China & Macau 2,435 Southeast Asia & Others 1,456 - Singapore 1,696 91 - Others 141 3,917 4,295 (923) Pre-sale proceeds (941) 2,994 Net investment 3,354 Note: The analysis includes share of Joint Ventures & Associates. 56
Gross Assets at 31st Dec 2014 By Activity By Location Commercial 88% Residential 12% Hong Kong 73% Mainland China and Macau 11% Southeast Asia 16% 57
Treasury Management Summary 2013 2014 Net debt (US$m) 3,025 2,657 Gearing 11% 10% Average tenor of debt (years) 6.7 7.3 Average interest cost 2.7% 2.9% Credit ratings - S & P - Moody s A- A3 A A3 58
2014 Financing Activity US$452m notes issued under MTN programme Total of US$1.2bn in banking facilities raised - US$355m in bilateral facilities - US$500m project loan for WF CENTRAL - US$339m project loan for Choa Chu Kang project 59
Maturity Profile of Committed Facilities/Bonds (US$m) US$m 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 Bank Facilities (Drawn & Undrawn) Bonds $3,263m $1,286m $785m $675m $882m $310m 2015 2016 2017 2018 2019 2020+ * * Includes bonds and notes issued under MTN Programme which are at face value. 60
Liquidity at 31st Dec 2014 (All figures in US$bn) 2013 HK$ 1 S$ 2 US$ RMB Total 7.1 Committed lines 4.7 2.0-0.5 7.2 4.4 Gross debt 3.1 1.2 - - 4.3 2.7 Available lines 1.6 0.8-0.5 2.9 1.4 Cash - 0.3 1.0 0.3 1.6 4.1 Available liquidity 1.6 1.1 1.0 0.8 4.5 Notes: (1) HK$ debt includes US$ debt swapped into HK$. (2) S$ debt includes HK$ debt swapped into S$. 61
Outlook Commercial leasing markets in Hong Kong and Singapore remain stable in 2015 Further strong profits expected from residential development activities in mainland China No residential profits in Hong Kong and lower contribution from Singapore The Group continues to seek opportunities in premium commercial and residential developments in Greater China and Southeast Asia 62
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