2016 results - hongkong land - home · sol acres 1,327 1,240 2018 44% lake grande 710 537 2019 77%...
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Presentation
3rd March 2017
2016 Results
2016 Results 1
2016 Review
• Underlying profit down 6%
• Continued strong contribution from commercial portfolio
• Steady residential contribution from mainland China and Singapore
• Net assets per share up 9% on higher capital values
2016 Results 2
2016 Results Highlights
2015 2016
US$905m Underlying profit attributable to shareholders US$848m
US$1,107m Non-trading items US$2,498m
US$2,012m Profit attributable to shareholders US$3,346m
US¢38.44 Underlying earnings per share US¢36.03
US¢85.50 Earnings per share US¢142.23
US$12.19 NAV per share US$13.30
US¢13.00 Final dividend per share US¢13.00
US¢19.00 Total dividend per share US¢19.00
2016 Results 3
Commercial Property
2016 Results 4
Commercial Portfolio (’000 sq. ft NFA)
HKL’s Share Office Retail Hotel Total
Hong Kong 4,139 572 143 4,854
Macau - 93 151 244
Singapore 1,652 129 - 1,781
Jakarta 664 64 - 728
Hanoi 106 11 - 117
Bangkok 27 61 - 88
Others 71 - 312 383
TOTAL 6,659 930 606 8,195
2016 Results 5
Hong Kong
1. One Exchange Square
2. Two Exchange Square
3. Three Exchange Square
4. The Forum
5. Jardine House
6. Chater House
7. Alexandra House
8. Gloucester Tower
9. Edinburgh Tower
9a. The Landmark Mandarin Oriental
10. York House
11. Landmark Atrium
12. Prince’s Building
12
5
1 2
3
6
8 9
7 10
4
11 9a
2016 Results 6
Hong Kong Central Grade “A” Office Rental Index
Source: Jones Lang LaSalle
80
100
120
140
160
180
2012 2013 2014 2015 2016
Index
2016 Results
-0.5
0
0.5
1
1.5
2
2.5
'02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21
Vacancy % m sq. ft New supply Net take up Vacancy
7
Hong Kong Central Grade “A” Office Market
0
3
6
9
12
15
Source: Jones Lang LaSalle
Disclaimer: The above forecast shall be regarded solely as a general guide. No representation is made nor responsibility accepted by Jones Lang LaSalle for the accuracy of the whole or any part whatsoever.
2016 Results 8
Hong Kong Grade “A” Office Market
0
3
6
9
12
15
-2
0
2
4
6
8
10
'02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21
Vacancy % m sq. ft New supply Net take up Vacancy
Source: Jones Lang LaSalle
Disclaimer: The above forecast shall be regarded solely as a general guide. No representation is made nor responsibility accepted by Jones Lang LaSalle for the accuracy of the whole or any part whatsoever.
2016 Results 9
Hongkong Land Central Portfolio: Office
2014 2015 2016
Average Net Rent (HK$ psf/month) 102 101 103
Year-end Vacancy 5.4% 3.4% 2.2%
Weighted Average Lease Expiry (years) 3.4 4.1 3.8
2016 Results 10
Hong Kong: Office Tenant Profile
Banks and other financial
services 39%
Legal 30%
Accounting 8%
Governments 1%
Trading 2%
Property 6%
Others 14%
2016 Results 11
Hong Kong: Expiration and Interim Rent Revisions
2017 2018 2019
Total lettable office area subject to expiration/rent revisions (’000 sq. ft)
1,322 1,330 1,020
% of area subject to expiration/rent revisions 32% 32% 25%
- Expiration 11% 19% 20%
- Rent revisions 21% 13% 5%
Average expiring net rent (HK$ psf/month) 101.7 103.2 112.8
2016 Results 12
Hongkong Land Central Portfolio: Retail
Note: Vacancy excludes areas under renovation.
2014 2015 2016
Average Net Rent (HK$ psf/month) 214 221 218
Year-end Vacancy 0% 0% 0%
Weighted Average Lease Expiry (years) 2.8 2.4 2.8
2016 Results
Singapore
One Raffles Link (100%-owned)
Marina Bay Financial Centre (33%-owned)
One Raffles Quay (33%-owned)
13
2016 Results 14
Singapore CBD Grade “A” Office Market
CBD – Raffles Place, Shenton Way, Marina Bay & Marina Centre
0
3
6
12
15
9
Source: Jones Lang LaSalle
-1
0
1
2
3
4
5
'02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21
Vacancy % m sq. ft New supply Net take up Vacancy
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.
2016 Results 15
Office Retail Total HKL’s Share
One Raffles Link 243 68 311 311
One Raffles Quay 1,327 4 1,331 444
Marina Bay Financial Centre 2,900 179 3,079 1,026
TOTAL 4,470 251 4,721 1,781
Singapore Commercial Portfolio (’000 sq. ft NFA)
2016 Results 16
Singapore: Office Tenant Profile
Banks and other financial
services 73%
Legal 6%
Accounting 3%
Natural resources
7%
Others 11%
2016 Results 17
Singapore: Office Average Rents and Vacancy
Note: According to local market practice, the average office rent includes management charges.
2014 2015 2016
Average Gross Rent (S$ psf/month) 9.2 9.5 9.3
Year-end Vacancy 1.7% 3.0% 0.1%
Weighted Average Lease Expiry (years) 5.5 5.1 4.8
2016 Results 18
Singapore: Expiration and Interim Rent Revisions
Note: According to local market practice, the average office rent includes management charges.
2017 2018 2019
HKL’s Share: Total lettable office area subject to expiration/rent revisions (’000 sq. ft)
130 719 320
% of area subject to expiration/rent revisions 7.8% 43.5% 19.3%
- Expiration 4.4% 5.8% 12.0%
- Rent revisions 3.4% 37.7% 7.3%
Average expiring rent (S$ psf/month) 8.9 9.0 9.8
2016 Results 19
• Existing portfolio features 135,000 sq. m. NFA
• Average gross rent: US$25.3 psm per month (2015: US$25.3 psm per month)
• Occupancy: 90%
• WTC 3: Construction has progressed to Level 39 (Completion: 2018)
Jakarta
Jakarta Land (50%-owned)
WTC 3
2016 Results
Phnom Penh
20
EXCHANGE SQUARE (100%-owned)
• Mixed-use complex with 30,000 sq. m. NFA
• Heart of Phnom Penh
• Tenant handover commenced: December 2016
2016 Results 21
• Prestigious retail centre, which includes an exclusive luxury hotel
• 43,000 sq. m. NFA
• Open: Q4 2017
Beijing
WF CENTRAL (84%-owned)
22 2016 Results
Residential Property
2016 Results 23
Mainland China – Completed Projects, Beijing
Project Project Type
Maple Place (90%) • 31 units handed over in 2016
• 2 units available for future sale
Central Park (40%) • 72 apartments
Maple Place
Central Park
2016 Results 24
Mainland China – Development Projects Summary
HKL’s Share
Project Interest Year of
Acquisition Site Area
(ha)
Developable Area
(m sq. m.)
Constructed (m sq. m.)
Under Construction
(m sq. m.)
Yorkville South, Chongqing 100% 2010 39 0.88 0.51 0.16
Yorkville North, Chongqing 100% 2011 54 1.09 0.34 0.07
Bamboo Grove, Chongqing 50% 2005 39 0.73 0.64 0.09
New Bamboo Grove, Chongqing 50% 2015 17 0.32 - 0.18
Landmark Riverside, Chongqing 50% 2009 11 0.50 0.15 0.15
Central Avenue, Chongqing 50% 2013 20 0.55 0.03 0.15
WE City, Chengdu 50% 2010 10 0.45 0.15 0.09
Parkville, Shanghai 50% 2015 4 0.11 - 0.11
TOTAL 194 4.63 1.82 1.00
2016 Results 25
Mainland China – Revenue Recognised
US$m
Note: The above chart includes HKL’s share of Joint Ventures & Associates.
$621m
$505m
$676m
0
200
400
600
800
2014 2015 2016
Chongqing Chengdu Beijing
2016 Results 26
Mainland China – Contracted Sales
Note: The above chart includes HKL’s share of Joint Ventures & Associates.
$635m
$802m
$1,105m
0
200
400
600
800
1,000
1,200
2014 2015 2016
Chongqing Chengdu Shanghai Beijing US$m
2016 Results 27
Mainland China – Sold but Unrecognised Sales
$533m
$821m
$1,083m
0
200
400
600
800
1,000
1,200
2014 2015 2016
Sales to be recognised next year Sales to be recognised after next year US$m
Note: The above chart includes HKL’s share of Joint Ventures & Associates.
2016 Results 28
Singapore
Margaret Drive
LakeVille
Sol Acres
Lake Grande
J Gateway
2016 Results 29
Singapore – Projects for Completion from 2017
Project Units GFA
(’000 sq. ft) Estimated
Completion Date Pre-Sold
LakeVille 699 674 2017 99%
Sol Acres 1,327 1,240 2018 44%
Lake Grande 710 537 2019 77%
Margaret Drive 316 238 2020 Not yet
launched
TOTAL 3,052 2,689
2016 Results 30
Units GFA
(’000 sq. m.)
Estimated Completion
Date
% of Construction
No. of Units
Launched
Pre-Sold % of Units Launched
Under development
Villas and Landed Housing
- Lancewood 223 61 2017 96% 223 88%
- Lakewood 130 46 2018 2% 45 36%
Mid-rise Apartments
- Marigold 589 56 2020 18% 203 84%
Sub-total 942 162
Undeveloped 640 2029
Total 802
Nava Park, Greater Jakarta (49%-owned)
Indonesia
2016 Results 31
• JV with Astra International
• Site area: 1.6 ha
• GFA: 116,000 sq. m.
• 509 luxury apartments; 92% pre-sold
• Completion: 2018
Indonesia
Anandamaya Residences (40%-owned)
2016 Results 32
• 50:50 JV between Modernland and Astra Land, of which HKL holds 50%
• Site area: 69 ha
• GFA: 940,000 sq. m.
• East of central Jakarta
• Construction start: 2017
Indonesia
Jakarta Garden City (25%-owned)
Jakarta Garden City
Background image from Google Earth
2016 Results 33
• JV with Ayala Land
• Site area: 0.5 ha
• GFA: 98,000 sq. m.
• 182 units; 99% pre-sold
• Completion: 2018
Philippines
Two Roxas Triangle (40%-owned)
2016 Results 34
• JV with Taft Property
• Site area: 20 ha
• GFA: 1.2 million sq. m.
• Residential and commercial
• Phase One: 1,226 units, 43% pre-sold
• Completion: 2035
Philippines
Mandani Bay (40%-owned)
2016 Results 35
• JV with Singha Estate
• Site area: 0.4 ha
• GFA: 38,000 sq. m.
• High-rise luxury condominium
• 374 units
• Construction start: Early 2018
Thailand
S36, Bangkok (49%-owned)
36 2016 Results
Financial Results
2016 Results 37
Consolidated Profit and Loss Account (US$m)
2015 2016
1,932 Revenue 1,994
(938) Net operating costs (1,023)
994 Operating profit 971
141 Share of results of joint ventures 117
(74) Net financing charges (69)
(151) Tax (168)
(5) Non-controlling interests (3)
905 Underlying profit 848
1,107 Non-trading items 2,498
2,012 Profit attributable to shareholders 3,346
2016 Results 38
Revenue (US$m)
2015 2016
973 Commercial revenue 986
959 Residential revenue 1,008
1,932 Total 1,994
2016 Results 39
Underlying Profit by Business (US$m)
2015 2016
940 Commercial property 946
354 Residential property 293
(60) Corporate expenses (62)
1,234 1,177
(107) Net financing charges (102)
(209) Tax (214)
(13) Non-controlling interests (13)
905 Underlying profit 848
2016 Results 40
Commercial Property Underlying Profit (US$m)
2015 2016
Greater China
784 - Hong Kong 794
16 - Mainland China & Macau 11
Southeast Asia & Others
118 - Singapore 120
22 - Others 21
940 Total 946
2016 Results 41
Residential Property Underlying Profit (US$m)
2015 2016
Greater China
57 - Hong Kong -
171 - Mainland China & Macau 170
Southeast Asia & Others
127 - Singapore 120
(1) - Others 3
354 Total 293
2016 Results 42
Consolidated Cash Flow (US$m)
2015 2016
896 Operating activities 1,096
(146) Investing activities (245)
(796) Financing activities (442)
(46) Net cash inflow/(outflow) 409
1,659 Cash and cash equivalents at beginning of year 1,566
(47) Effect of exchange rate changes (77)
1,566 Cash and cash equivalents at end of year 1,898
(3,906) Gross debt (excluding bank overdrafts) (3,906)
(2,341) Net debt at end of year (2,008)
2016 Results 43
Operating Activities (US$m)
2015 2016
994 Operating profit excluding non-trading items 971
(78) Net interest paid (75)
(175) Tax paid (141)
(281) Payments for residential sites (79)
(407) Development expenditure on residential projects (336)
1,079 Proceeds from residential sales 953
117 Dividends received from joint ventures 88
(353) Others (285)
896 1,096
2016 Results 44
Investing Activities (US$m)
2015 2016
(58) Major renovations capex (92)
(256) Funding of joint ventures (104)
391 Advances and loan repayments from joint ventures 103
(152) Development expenditure (148)
(71) Payment of deposit for a joint venture (4)
(146) (245)
2016 Results 45
Financing Activities (US$m)
2015 2016
(445) Dividends paid by the Company (444)
(4) Dividends paid to minority shareholders (4)
(347) Net drawdown/(repayment) of borrowings 26
- Change in interests in subsidiaries (20)
(796) (442)
2016 Results 46
Consolidated Balance Sheet (US$m)
2015 2016
Investment properties
24,957 - Subsidiaries 27,712
4,296 - Joint ventures 4,180
29,253 31,892
Properties held for sale
2,714 - Subsidiaries 2,218
1,771 - Joint ventures 1,835
4,485 4,053
(2,677) Others (2,623)
31,061 Gross assets (excluding cash) 33,322
Financed by:
28,720 - Total equity 31,314
2,341 - Net debt 2,008
31,061 33,322
2016 Results 47
Investment Property – Basis of Valuation
Note: These capitalisation rates are provided on an indicative basis.
Capitalisation Rates 2015 1H 2016 2016
Hong Kong Office - Exchange Square 1 & 2 3.75% 3.60% 3.50%
Hong Kong Retail - Landmark Atrium 4.50% 4.50% 4.50%
Singapore Office - MBFC 3.75% 3.50% 3.50%
2016 Results 48
Investment Property – Carrying Values (US$m)
Note: The analysis includes share of Joint Ventures & Associates.
2015 2016
Greater China
23,671 - Hong Kong 26,381
1,532 - Mainland China & Macau 1,513
Southeast Asia & Others
3,428 - Singapore 3,351
622 - Others 647
29,253 Total 31,892
2016 Results 49
Properties Held for Sale – Carrying Values (US$m)
Note: The analysis includes share of Joint Ventures & Associates.
2015 2016
Greater China
18 - Hong Kong 18
2,766 - Mainland China & Macau 2,570
Southeast Asia & Others
1,528 - Singapore 1,250
173 - Others 215
4,485 4,053
(1,187) Pre-sale proceeds (1,637)
3,298 Net investment 2,416
2016 Results 50
Gross Assets at 31st Dec 2016
Commercial 91%
Residential 9%
By Activity
Hong Kong 78%
Mainland China and Macau 9%
Southeast Asia 13%
By Location
2016 Results 51
Treasury Management
Summary 2015 2016
Net debt (US$m) 2,341 2,008
Gearing 8% 6%
Average tenor of debt (years) 7.2 6.4
Average interest cost 3.3% 3.4%
Credit ratings
- S & P
- Moody’s
A
A3
A
A3
2016 Results 52
$663m
$1,086m $882m
$294m
$756m
$2,836m
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2017 2018 2019 2020 2021 2022+
Bank Facilities (Drawn & Undrawn) Bonds US$m
Maturity Profile of Committed Facilities/Bonds (US$m)
*
* Includes bonds and notes issued under MTN Programme which are at face value.
2016 Results 53
Liquidity at 31st Dec 2016 (All figures in US$bn)
2015 HK$1
S$2
US$ RMB Total
6.4 Committed lines 4.7 1.4 - 0.4 6.5
3.9 Gross debt 3.3 0.4 - 0.2 3.9
2.5 Available lines 1.4 1.0 - 0.2 2.6
1.6 Cash - 0.2 0.7 1.0 1.9
4.1 Available liquidity 1.4 1.2 0.7 1.2 4.5
Notes: (1) HK$ debt includes US$ debt swapped into HK$. (2) S$ debt includes HK$ debt swapped into S$.
2016 Results 54
Outlook
• Stable performance from commercial property portfolio
• Higher contribution in our residential business from mainland China, offset by lower profits from Singapore
• Continue to seek expansion opportunities in mainland China and Southeast Asia
Hongkong Land
www.hkland.com
Thank you
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