2021 INTERIM RESULTS | ANALYST BRIEFING - 12TH AUGUST 2021 - Investors
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
2021 INTERIM RESULTS | ANALYST BRIEFING 12TH AUGUST 2021
DISCLAIMER This presentation has been prepared by Swire Properties Limited (“the “Company”, and together with its subsidiaries, the “Group”) solely for information purposes and certain information has not been independently verified. No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the accuracy, fairness, completeness, reasonableness or correctness of the information or opinions presented herein or any verbal or written communication in connection with the contents contained herein. Neither the Company nor any of its affiliates, directors, officers, employees, agents, advisers or representatives shall have any responsibility or liability whatsoever, as a result of negligence, omission, error or otherwise, for any loss howsoever arising in relation to any information presented or contained in this presentation. The information presented or contained in this presentation is subject to change without notice and shall only be considered current as of the date of this presentation. This presentation may contain certain forward-looking statements that reflect the Company’s beliefs, plans or expectations about the future or future events. These forward‐looking statements are based on a number of assumptions, current estimates and projections, and are therefore subject to inherent risks, uncertainties and other factors beyond the Company’s control. The actual results or outcomes of events may differ materially and/or adversely due to a number of factors, including the effects of COVID-19, changes in the economies and industries in which the Group operates (in particular in Hong Kong and the Chinese Mainland), macro-economic and geopolitical uncertainties, changes in the competitive environment, foreign exchange rates, interest rates and commodity prices, and the Group’s ability to identify and manage risks to which it is subject. Nothing contained in these forward-looking statements is, or shall be, relied upon as any assurance or representation as to the future or as a representation or warranty otherwise. Neither the Company nor its directors, officers, employees, agents, affiliates, advisers or representatives assume any responsibility to update these forward‐looking statements or to adapt them to future events or developments or to provide supplemental information in relation thereto or to correct any inaccuracies. This presentation is for information purposes only and does not constitute or form any part of, and should not be construed as, an invitation or offer to acquire, purchase or subscribe for securities nor is it calculated to invite any such offer or invitation, whether in Hong Kong, the Chinese Mainland, the United States, or elsewhere. This presentation does not constitute, and should not be construed as, any recommendation or form the basis for any investment decisions regarding any securities of the Company. Potential investors and shareholders of the Company should exercise caution when investing in or dealing in the securities of the Company. 2
AGENDA
1. Results Highlights
2. Investment Portfolio Guy Bradley,
3. Trading Portfolio Chief Executive
4. Hotel Portfolio
5. Financial Highlights Fanny Lung,
6. Sustainable Development Finance Director
7. Prospects
8. Q&A
3
REBOUND, RESILIENCE AND RECOVERY
HK$ 1,984 M HK$ 3,716 M HK$ 4,513 M HK$ 49.21 per share
1H 2021 1H 2021 1H 2021 Equity attributable to
+93% Reported profit +0.4% Recurring profit +20% Underlying profit shareholders
-0.3%
(1H 2020 at HK$1,029M) (1H 2020 at HK$3,702M) (1H 2020 at HK$3,753M) (Dec 2020 at HK$49.36 per share)
Resilient Gradual Robust Strategic Sustained
HK office portfolio Recovery Chinese Mainland capital management dividend growth
HK retail portfolio retail portfolio
98% Almost
77% HK$ 3.2 bn HK$ 0.31
Taikoo Place / Pacific Place Fully Let (2)
Attri. retail sales growth (3) Sales proceeds from First interim 2021
Occupancy (1)
Dividend per share
Positive 5-36% 38% EDEN, Singapore
Reversions at Taikoo Place Rebound in retail sales Attri. retail gross rental 3.3%
Reach & Rise, U.S.A First interim 2020
HK$ 0.30 per share
A Large Anchor Stable Sixth retail development Taikoo Shing car parking
spaces, HK
tenant confirmed at Rental income Taikoo Li Qiantan
Two Taikoo Place (excl. amortised concessions) to open in September 2021
(1) HK office overall portfolio occupancy: 96%.
4 (2) HK retail occupancy by malls: 96% at The Mall, Pacific Place; 100% at Cityplaza; 99% at Citygate Outlets and 100% others.
(3) Retail sales for all the malls in our Chinese Mainland portfolio on an attributable basis, compared with the same period last year.
KEY DEVELOPMENTS
ENCOURAGING ACHIEVEMENTS IN 2021 IN ALL REGIONS
January March March
EIGHT STAR STREET Empire City, HCMC EDEN
Hong Kong Vietnam Singapore
▪ Sales launched ▪ Minority investment ▪ All 20 units sold
(15.73%)
▪ 26 of 37 units pre-sold (1)
▪ Residential-led mixed-
use development
Artist impression
Artist impression
May July August
Reach & Rise, Miami Zhangyuan, Shanghai Sanlitun, Beijing
U.S.A. Chinese Mainland Chinese Mainland
▪ Almost all remaining ▪ JV management co. ▪ Framework cooperation
units sold (60%) for leasing and agreement
▪ Reach: 390 units all management ▪ Transformation of a
sold ▪ Historic Zhangyuan BPTC (2) maintenance
▪ Rise: 388 of 390 units shikumen compound depot
sold (1) revitalisation ▪ North of Taikoo Li
▪ Close to HKRI Taikoo Sanlitun
Hui ▪ Further upgrading
Sanlitun business circle
(1) As at 10th August 2021. 5
5 (2) Beijing Public Transport Corporation
STRATEGIC GROWTH ROADMAP
2021 2022 2023 2024 2025 & onwards GFA sq ft
▪ Two Taikoo Place ▪ 46-56 Queen’s Road East ▪ Wong Chuk Hang Station ▪ Wah Ha / Zung Fu Office Project (2)
HK ▪ EIGHT STAR STREET (Pacific Place office extension) Package Four ▪ Quarry Bay Residential Project (3) + 2.9 M
Hong Kong ▪ Chai Wan Residential Project (4)
CM ▪ Taikoo Li Qiantan (1)
▪ Taikoo Li Sanlitun West (1)
▪ Zhangyuan Revitalisation (1)
(by phases from 2022) Chinese Mainland
▪ INDIGO Phase Two
(by phases)
+ 2.3 M (1)
+2.0 M
▪ Brickell City Centre Phase Two
USA U.S.A. / other future developments
▪ The River, Vietnam
SEA ▪ Empire City, Vietnam
(by phases ~ 2026) South East Asia
▪ Savyavasa, Indonesia
+ 1.9 M
▪ Strong balance sheet
fueling future growth
▪ Exciting pipeline
Two Taikoo Place, HK Taikoo Li Qiantan, Shanghai INDIGO Phase Two, Beijing The River, HCMC, Vietnam ▪ Balanced growth from
investment and trading
properties
9.1 M sq ft
Expected Attri. GFA to be
46-56 Queen’s Road East, HK Taikoo Li Sanlitun West, Beijing Empire City, HCMC, Vietnam Savyavasa, South Jakarta, Indonesia Completed from 2020
Hong Kong
(1) Taikoo Li Qiantan was completed in 2020 and Taikoo Li Sanlitun West was completed in Jun 2021. Both are
scheduled to open in 2H 2021. GFA of Zhangyuan revitalisation is not included above.
(4) Subject to agreement on land premium with the Hong Kong government.
(5) As at 12th August 2021
6 (2) Subject to the Company having successfully bid in a compulsory sale. (6) Expected years of completion are shown above 6
(3) Subject to the related joint venture having successfully bid in a compulsory sale and in accordance with applicable
town planning controls.
Two Taikoo Place INVESTMENT PORTFOLIO
HONG KONG OFFICE
PORTFOLIO RESILIENCE – POSITIVE REVERSIONS AT TAIKOO PLACE AND OVERALL FIRM OCCUPANCY
HK$M
3,500
3,277 3,044
Loss of rental from
Cityplaza One
3,000
98% 2% HK$ 3,044 M
2,500
Taikoo Place & Vs 1H 2020
(excl. Cityplaza Attri. Gross Rental
2,000 Pacific Place One)
1,500
1,000
500
1% HK$ 171.3 bn
vs Dec 2020 Attri. Valuation
-
1H 2020 1H 2021
Attributable Gross Rental Income
One Island East / Other Taikoo Place
Pacific Place
One Taikoo Place Office Towers
98% Occupancy(1) 100% Occupancy (1) 96% Occupancy (1)
11% Reversion(2) 10% Reversion (2) 1% Reversion (2)
$100-120 1/2 PP (3) mid 50s – low 70s (3) mid 40s – mid 50s (3)
$90 3 PP (3)
(1) Occupancy as at 30th June 2021.
8 (2) Reversion is the percentage change in rent on lease renewals, entry into new leases and rent reviews.
(3) Refers to latest monthly rentals in HK$ psf.
HONG KONG RETAIL
GRADUAL RECOVERY – REBOUND IN RETAIL SALES AND REDUCED CASH CONCESSIONS
HK$M
1,336 1,167
1,400
1,200
1,000 Flattish HK$ 1,167 M
800
Almost Fully let vs 1H 2020 (excl.
amortised Attri. Gross Rental
concessions)
600
400
200
-
Amortised rental
concessions 2% HK$ 45.5 bn
effects vs Dec 2020 Attri. Valuation
(200)
1H 2020 1H 2021
Attributable Gross Rental Income
PP Mall Cityplaza Citygate
96% Occupancy(1) 100% Occupancy (1) 99% Occupancy (1)
36% Retail sales (2) 5% Retail sales (2) 18% Retail sales (2)
(1) Occupancy as at 30th June 2021.
(2) Retail sales year-on-year growth for the six months ended 30th June 2021.
9
CHINESE MAINLAND PORTFOLIO
SIGNIFICANT CONTRIBUTION – LEVERAGING TAIKOO LI AND TAIKOO HUI BRANDS
▪ Chinese Mainland overall portfolio contributed 36% attributable gross rental income in 1H 2021.
▪ Chinese Mainland retail is the second largest rental contributor.
Chinese Mainland Attributable Gross Rental Income Attributable Gross Rental Income by Region
HK$M
4,500 4,246 4,279
3,958 CM Resid. USA
4,000
CM Office
3,311 1%3%
3,500 6%
3,000 1,963
2,099 2,338 33%
2,614 2,578
2,500
2,153
2,463
1,780 29% 36% 42%
CM Retail Contribution from
2,000 Chinese Mainland HK Office
1,327
1,239
1,500 1,179
2,578
1,000 1,995 2,147
1,941
3%
1,531 16%
1,224 1,287 HK Resid.
500
2H 974
HK Retail
1H
-
2014 2015 2016 2017 2018 2019 2020 2021
10CHINESE MAINLAND RETAIL
STRONG RENTAL GROWTH – ROBUST RETAIL SALES, STRONG LOCAL DEMAND AND RMB APPRECIATION
HK$M
2,108
2,000 95-100% 38% HK$ 2,108 M
1,529 Overall Occupancy vs 1H 2020 Attri. Gross Rental
1,500
(23% growth disregarding amortised rental
1,000 concessions and 9% RMB appreciation)
500
5%
HK$ 47.6 bn
- vs Dec 2020 Attri. Valuation
1H 2020 1H 2021
Attributable Gross Rental Income
100% Occupancy 98% Occupancy
Taikoo Li
Sanlitun 85% Retail sales INDIGO 6% Retail sales
Beijing
95% Occupancy
96% Occupancy
66% Retail sales Shanghai
HKRI
Taikoo Hui 83% Retail sales
Sino-Ocean Chengdu
Taikoo Li Chengdu 100% Occupancy
Guangzhou
Taikoo Hui 88% Retail sales
(1) Occupancy as at 30th June 2021.
11 (2) Retail sales year-on-year growth for the six months ended 30th June 2021.CHINESE MAINLAND RETAIL
IMPRESSIVE TENANTS’ SALES – OVERALL RETAIL SALES GROWTH OF 77%(1) IN 1H 2021
100%
66% 83% 88% 85% 6%
80%
60%
40%
73%
20% 36%
23% 26%
15% 20%
6% 11%
0%
2019 2020 1H 2021 2019 2020 1H 2021 2019 2020 1H 2021 2019 2020 1H 2021 2019 2020 1H 2021
-18% -12%
-20%
Sino-Ocean Taikoo Li HKRI Taikoo Hui, Taikoo Hui, Taikoo Li Sanlitun, INDIGO,
Chengdu Shanghai Guangzhou Beijing Beijing
12 (1) Overall retail sales growth of all the malls in the Chinese Mainland on an attributable basis.
(2) Retail sales year-on-year growth for the six months ended 30th June 2021.CHINESE MAINLAND OFFICE
LARGELY STEADY PERFORMANCE WITH IMPROVED OCCUPANCY
HK$M
500
388 431
400 88-99% 11% HK$ 431 M
300 Overall Occupancy vs 1H 2020 Attri. Gross Rental
200
100
-
Flattish HK$ 14.3 bn
1H 2020 1H 2021 vs Dec 2020 Attri. Valuation
Attributable Gross Rental Income
Taikoo Hui, INDIGO, HKRI Taikoo Hui,
Guangzhou Beijing Shanghai
96% Occupancy (1) 88% Occupancy (1) 99% Occupancy (1)
mid 100s – low 200s (2) low 200s – high 200s (2) mid 300s – mid 400s (2)
(1) Occupancy as at 30th June 2021.
13 (2) Refers to latest monthly rentals in RMB psm.TAIKOO LI QIANTAN, SHANGHAI
SIXTH DEVELOPMENT IN CHINESE MAINLAND OPENING SOON
1.2 M sq ft * 3-line metro Sept > 80% 50:50 JV
GFA Interchange Station Pre-leasing
Open-plan 2021
86,000 sq ft
green area Lanes-driven opening
> 200
shops Lujiazui + Swire
14 * On a 100% basisTAIKOO LI QIANTAN, SHANGHAI FOCUSING ON WELLNESS AND SUSTAINABILITY 15
TAIKOO LI SANLITUN WEST, BEIJING
ADDING ~ 20% RETAIL AREA TO EXISTING TAIKOO LI SANLITUN
0.3 M sq ft
GFA
Extension
to Taikoo Li Sanlitun
2H 2021 100%
Pre-leasing
Refurbished
opening
16ZHANGYUAN REVITALISATION, SHANGHAI
LEVERAGING OUR TRACK RECORD IN URBAN REGENERATION
0.6 M sq ft * 43 shikumen blocks Leasing & 60:40 JV
Above ground GFA 170 historical bldgs Revitalisation Management with Shanghai Jing’an Real
office | resid. | hotels | retail
28 different styles Estate (Group) Co., Ltd
HKRI Taikoo Hui
Zhangyuan
17 * On a 100% basis. Above ground GFA of 0.6M sq ft, below ground GFA of 0.8M sq ft.DUAL GROWTH ENGINES
Expected Attributable GFA of Completed Property Portfolio (incl. Hotels)
(‘000 sq ft)
Hong Kong Portfolio
16% 18%
(vs 2020) Chinese Mainland Portfolio
(vs 2020)
15,000 14,597
13,818 779 11,151
218 218 11,000 9,722
13,000 12,582 1,000 1,000
1,429
9,466
256 256
11,000 619 619 619
9,000
9,000
12,582 12,600 12,600
7,000 8,847 8,847 8,847
7,000
5,000 5,000
2020 2024F 2028F onwards 2020 2024F 2028F onwards
Existing Portfolio 46-56 QRE (Pacific Place office extension) Existing Portfolio Taikoo Li Sanlitun West
Two Taikoo Place Wah Ha / Zung Fu Office (1) Taikoo Li Qiantan INDIGO Phase Two
18 (1) Subject to the Company having successfully bid in a compulsory sale.EIGHT STAR STREET TRADING PORTFOLIO
HONG KONG TRADING PORTFOLIO
ENCOURAGING PRE-SALE PROGRESS, CONTINUOUS RESIDENTIAL PIPELINE
Expected Residential GFA Completions in Hong Kong
(100% Basis)
GFA (‘000 sq ft)
694
946,000 sq ft
(Attributable basis)
638
400
31
2022 2024 Beyond 2025
Wong Chuk Hang Station Package Four
25% Interest Exp. Completion (2024) Foundation works
EIGHT STAR STREET in progress
37 Residential units 26 Pre-sold (1) Chai Wan Inland Lot No. 88 (2)
Exp. Completion (2022) 80% Interest Land acquisition in 2019
Superstructure & interior fitting
out works in progress 983-987A King’s Road / 16-94 Pan Hoi Street, Quarry Bay (3)
> HK$39,000 psf Average selling price 50% Interest Compulsory sale application
submitted in 2018
(1) As at 10th August 2021.
(2) Subject to agreement on land premium with the Hong Kong government.
20 (3) Subject to the related joint venture having successfully bid in a compulsory sale and in accordance with applicable town planning controls.OVERSEAS TRADING PORTFOLIO
EDEN AND ALMOST ALL REACH & RISE SOLD OUT, 3 PROJECTS UNDERTAKEN IN SOUTH EAST ASIA
Ho Chi Minh City, Vietnam Jakarta, Indonesia Singapore Miami, U.S.A.
The River Empire City Savyavasa EDEN Reach & Rise
20% Interest 15.73% Minority interest 50% Interest 100% Interest 100% Interest
525 Luxury apartments Mixed-use (Residential-led) > 400 Residential units 20 Residential units 780 Residential units
Exp. Completion (2022) Exp. Completion Exp. Completion (2024) ALL SOLD 778 units sold
by phases (2021-2026) (Two remaining Rise units
> 90% Pre-sold (1) available for sale) (1)
> 45% Pre-sold (1)
0.8 M sq ft 7.1 M sq ft 1.1 M sq ft
(100% basis) (100% basis) (100% basis)
1.85 M sq ft
21 (1) As at 10th August 2021. (Attributable basis)The Upper House HOTELS
HOTEL PORTFOLIO
RETURNED TO PROFITABILITY AT OPERATING LEVEL
▪ Trading conditions were challenging in HK due to
COVID-19 and associated travel restrictions.
▪ Better business performance in the Chinese
Mainland and U.S.A. with higher RevPAR and
occupancy.
▪ Returned to an EBITDA profit (1) of HK$4M at
managed hotels in 1H 2021, compared with a
loss of HK$98M in 1H 2020.
▪ Resulted in lower underlying losses.
▪ The Silveri Hong Kong – MGallery (2) at Citygate is
expected to open, subject to COVID-19
conditions, later this year.
The Middle House
(1) For managed hotels – including restaurants and taking into account central costs.
23 (2) 20% owned.Taikoo Li Sanlitun FINANCIAL HIGHLIGHTS
UNDERLYING PROFIT
HIGHER UNDERLYING PROFIT ON DISPOSAL GAINS AND BUSINESS IMPROVEMENTS
Underlying Profit
HK$M
Non-recurring ▪ Underlying profit increased by 20%, reflecting the sale of car parking spaces at
24,130 Recurring
Taikoo Shing.
▪ Recurring underlying profit recorded a marginal increase of 0.4%, reflecting higher
12,679
16,497 retail rental income in Chinese Mainland and reduced losses from hotels, largely
offset by lower retail rental income in Hong Kong and loss of rental income from
5,590 4,513
3,753 Cityplaza One.
7,633 7,089 51 797
3,702 3,716 Movement in Underlying Profit
HK$M
2019 2020 1H 2020 1H 2021 746 (152) 17 149
By Segment (HK$M) 1H 2020 1H 2021 Change
Property investment 4,060 3,908 3.7%
3,753 4,513
Property trading (45) (28) n.m.
Hotels (313) (164) n.m.
Recurring Underlying Profit 3,702 3,716 0.4%
Sale of investment properties 51 797 n.m. Underlying Increase in Decrease in Decrease in Decrease in Underlying
profit profit from profit from losses from losses from profit
Underlying Profit 3,753 4,513 20.3% 1H 2020 sale of props trading props hotels 1H 2021
investment investment
props
25 * 2021 Interim Results Summary is included in the Appendix.RENTAL INCOME
MAINTAINING RENTAL GROWTH – INCREASING CONTRIBUTION FROM CHINESE MAINLAND PORTFOLIO
Attributable Gross Rental Income
HK$M
14,117 14,058 HK Office ▪ Loss of rental from the disposal of Cityplaza One.
7% ▪ Disregarding Cityplaza One, attributable rental income decreased by 2%.
▪ Positive rental reversions at Taikoo Place. Firm overall occupancy.
6,439 6,468 HK Retail ▪ Lower base rents and higher amortised rental concessions.
13% ▪ Partly offset by higher turnover rents due to increased retail sales.
▪ Disregarding amortised rental concessions, attributable rental income was flat.
7,207
6,957 ▪ Retail sales increased significantly.
CM Retail
2,539 2,569 ▪ Strong local demand due to travel restrictions outside Chinese Mainland.
3,044 38% ▪ Disregarding RMB appreciation and amortised rental concessions, attributable
3,277
rental income increased by 23%.
3,352 3,420 1,167
1,336 CM Office ▪ Largely steady performance.
2,108 11% ▪ Demand improved in Beijing and Shanghai but was weak in Guangzhou.
830 1,529
794
957 807 388 431
427 457 ▪ Strong recovery in Brickell City Centre in Miami.
Others
2019 2020 1H 2020 1H 2021
7% ▪ Demand for residential investment properties in Hong Kong was primarily local.
HK$ 7,207 M
4% Attributable * Reported gross rental income was HK$6,197M, comprising HK$2,874M for HK office, HK$1,116M for HK retail, HK$1,538M for Chinese
vs 1H 2020 Mainland retail, HK$189M for Chinese Mainland office and HK$480M other rental income.
Gross Rental Income
26DIVIDEND RETURN
SUSTAINED DIVIDEND GROWTH
Dividend Per Share
HK$ / Share
▪ Our policy continues to be to deliver sustainable
growth in dividends to our shareholders and to
0.91
0.88 pay out approximately half of our underlying profit
0.84
in ordinary dividends over time.
0.77
0.71
▪ Full year (2016-2020) CAGR at 6.4%
0.59 0.61
0.57
0.52
0.48
0.31
HK$ 0.31
0.27 0.29 0.30 3.3%
2nd 0.23 0.25 Dividend per share
vs 1st Interim
2020 1st Interim 2021
1st
2016 2017 2018 2019 2020 2021
27INVESTMENT PROPERTIES VALUATION
INCREASE IN CHINESE MAINLAND PORTFOLIO VALUATION OFFSET BY DECREASE IN HK PORTFOLIO VALUATION
Movement in Investment Properties Valuation*
(excl hotels and investment properties held under JVCs)
▪ The decrease in the valuation in the
HK$M investment property portfolio was mainly
266,831
268,000 (2,525) 1,628 (310) (219) 504 265,909 due to a decrease in the valuation of the
266,000
retail and office investment properties in
Hong Kong, partially offset by an increase
264,000
in the valuation of the investment
262,000 properties in the Chinese Mainland.
260,000
▪ There was no change in the capitalisation
258,000
rate.
256,000
254,000
252,000
250,000
HK$ 265,909 M
0.3% Investment Props Valuation
31st
31stDec
Dec2020 Net fair value Net capital Net transfers Disposals Translation 30th
30th JunJun
2021
vs Dec 2020
2020 losses expenditures differences 2021 (Jun 2021)
28 * Valuation before initial leasing costs.NET DEBT AND GEARING
STRONG BALANCE SHEET
Net Debt Reconciliation (HK$M) Financial Ratios * 2017 2018 2019 2020 Jun 2021
Net debt at 31st December 2020 (6,605)
Total equity (HK$M) 259,378 281,291 288,911 290,680 289,849
Net rental, fee receipts and proceeds
from property trading / development 9,140 Net debt (HK$M) 35,347 29,905 15,292 6,605 9,010
and disposals of investment props
Gearing 13.6% 10.6% 5.3% 2.3% 3.1%
Capex – PP&E and props investment and
(1,670)
development cost for props trading Underlying interest
10.7 12.6 48.2 33.5 26.4
cover (x)
Cashflow from JVCs, associates and Underlying cash
(4,660) 7.5 9.7 31.5 20.1 14.5
other investments
interest cover (x)
Dividends paid to the Company’s
(3,569)
shareholders 3.1%
Tax paid (681) 2.3% Gearing
Other net cash paid (999)
Sub-total (9,044)
Lease liabilities 34 21,232 16,917
Net debt at 30th June 2021 (9,010)
3.1%
HK$ M
Cash
6,605
9,010 Gearing
Net Debt
Dec 2020 Jun 2021
29 * Financial ratios as at respective Dec year-ends except for June 2021.MATURITY PROFILE AND LIQUIDITY
Maturity Profile of Available Committed Facilities (at 30th Jun 2021)
Total 33,066 2,800 12,737 700 1,100 3,940 4,583 2,140 4,262 - 804 HK$M Dec 2020 Jun 2021
Drawn 25,466 950 8,887 200 1,100 2,540 4,583 2,140 4,262 - 804 Cash 21,232 16,917
Undrawn - committed 11,751 7,600
HK$M RCL / Term Loans
Bonds 32,983 24,517
3,883
Undrawn - uncommitted 758 739
33,741 25,256
USD
Fixed : Floating
19%
8,854
300 1,940 Currency HKD
82 18 %: %
4,583 4,262 Profile 81%
2,500 200
1,100
2,000 2,140
804
Fitch “A”
500
2H 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Moody’s “A2”
▪ During 1H 2021, we have repaid term and
revolving loan facilities aggregating HK$2.2 bn. 31 % HK$ 33,066 M HK$ 24,517 M
Green Financing Available Cash & Undrawn
Committed Facilities Committed Facilities
30CAPITAL COMMITMENTS
Profile of Capital Commitments for Investment Properties and Hotels – at 30th Jun 2021
HK$M Expenditure Forecast Expenditure Total Commitments* Commitments
relating to JVCs
Six months Six months 2022 2023 2024 & At 30th Jun 2021 At 30th Jun 2021
ended 30th ending 31st later
Jun 2021 Dec 2021
Hong Kong 1,245 3,736 3,606 941 4,101 12,384 58
Chinese Mainland 313 1,067 343 706 3,195 5,311 4,273
U.S.A. 6 2 - - - 2 -
Total 1,564 4,805 3,949 1,647 7,296 17,697 4,331
* The capital commitments represent the Group’s capital commitments of HK$13,366 M plus the Group’s share of the capital commitments of joint venture companies of HK$4,331 M. The Group is
committed to funding HK$356 M of the capital commitments of joint venture companies.
31Fighting Climate Change “We’re All in”
SUSTAINABLE DEVELOPMENT Sustainable
Development
Report 2020
ESG Update for
Investors (Jun 2021)RENEWABLE ENERGY GENERATION AND PROCUREMENT
GREEN AND CLEAN ENERGY TO SUPPORT NET ZERO EMISSIONS
Offsite Renewable Energy Procurement Onsite Renewable Energy Generation in 2020
~57,690,000 kWh (1)
Taikoo Hui, Guangzhou
Sourced offsite 100% renewable
electricity since Jul 2021
INDIGO, Beijing Taikoo Hui, Guangzhou
~40,700,000 kWh (1)
Sino-Ocean Taikoo Li Chengdu /
The Temple House
Taikoo Li Sanlitun, Beijing One Taikoo Place, Hong Kong
Sourced offsite 100% renewable
electricity since 2020 and 2021
respectively
Continue to adopt on and
off-site renewable energy
33 (1) Estimated annual renewable electricity consumption covering both landlord and tenantsPLACES IMPACT REPORT
TAIKOO LI SANLITUN CONTRIBUTES TO A VIBRANT MIXED-USE COMMUNITY
Read the
Add QR
report online
code
now!
Four Dimensions of Place
Key Findings
VIBRANCY LIVELIHOOD
International
Points of interests Local residents and brands often
have grown visitors have a open their first WELLBEING RESILIENCE
exponentially strong connection to regional store at
Taikoo Li Taikoo Li
34TENANT ENGAGEMENT
JOINTLY ADVANCE ENVIRONMENTAL PERFORMANCE THROUGHOUT TENANCY LIFECYCLE
Smart Waste Reduction Pilot Green Kitchen initiative
15
Participating Offices
(Swire + Tenants) 322 k+ Floor Area
(sq ft) 42 F&Bs recognised with Green Kitchen Awards
(since launch in 2018)
Green Performance Pledge (GPP) How it works?
60 %
of new office leases and renewals in wholly- Commit Establish baseline Take action Recognise tenants’
owned portfolios sign a GPP to collaborate on performance to meet agreed SD good performance
sustainability goals
35GREEN FINANCING
PREFERRED FINANCING STRATEGY
~31% 2025 TARGET:
Achieve a minimum of 50% of
of our current bond and bond and loan facilities from green
loan facilities come from financing
green financing (1)
2018 2019 2020 2021
1st green bond in Hong Kong that 1st sustainability-linked loan in Launched four more green bonds
(totalling HK$1,934M)
Named a Top 10 company
globally for our green bond
obtained the Green Finance Hong Kong with the interest rate reporting work, by the Climate
Certification from HKQAA partly reflecting year-on-year SD Secured a HK$1 bn green loan Bonds Initiative
(US$500M) performance improvements facility
(HK$500M)
Launched three more sustainability-
linked loans (totalling HK$3 bn)
36 (1) At June 2021Taikoo
HKRI Place
Taikoo Hui
PROSPECTSACCELERATE DIGITALISATION
Effective Customer Engagement
~0.6 M sq ft GFA
Greater Efficiency through Stronger Synergies with Partners
with Digital Enablers Smarter Processes via Digital Connections
Powerful CRM Strategy AI & Big data Partnership with Tsinghua University through
x Advanced Data Analytics Capability is used to optimise building operations - Smart
the Joint Research Centre for Building Energy
x Innovative Digital Communication Efficiency and Sustainability
Energy Management Platform
+75 % +45 %
EDEN
CRM captured revenue (1) CRM members (1)
Smart Waste Reduction Pilot
15 offices joining by
using IoT scales to
monitor waste disposal
New Pacific Place mobile App
Enhanced Loyalty Programme –
Sino-Ocean Taikoo Li
Chengdu CRM
1st Hong Kong
2.4x Average Daily App Users (2) Gamification 5G business hubs
9.7x more engagement on App (3)
Pacific Place (new) Taikoo Place
(1) Represents the year-on-year growth of overall CRM Revenue and members for all malls (except Citygate) for the six months ended 30th June 2021.
(2) Represents the year-on-year growth of average daily users for the first 3 weeks since the launch of new app.
38 (3) Represents the year-on-year growth of app content page view for the first 3 weeks since the launch of new app.NEW VENTURES AND TECH APPLICATIONS
Technology sourcing and innovation targeting the scaled application of cutting-edge technology
Corporate Venture
Tech Experimentation Fund
Capital Programme
US$50M venture fund investing in Innovation & Collaboration
global Series A – C companies 50+ Tech Trials across the
organisation over the past 3 years
Office-of- The Cave at EIGHT STAR STREET, the first residential
the-future
Robotics & IoT
Hotel virtual apartment viewing experience in Hong Kong
Smart
retail technologies Artificial intelligence
Blockchain
Real Estate
Tech
Virtual reality
Property
& buildings Construction
tech
Cloud software
mgmt
Energy Data analytics
efficiency
Automation Virtual reality experience at the Experience Lounge
at Taikoo Li Qiantan
39PROSPECTS
GROWING OUR BUSINESS WITH GREAT
FUNDAMENTALS AND A BALANCED PORTFOLIO
❑ Signs of economic recovery maintaining its
momentum.
❑ Business expected to continue to improve in 2H
2021.
▪ HK office leasing momentum to pick up gradually.
Taikoo Li Qiantan
▪ Mixed HK retail sentiment but gradual recovery
of retail sales expected. INDIGO Phase Two
Artist Impression
▪ Optimistic about Chinese Mainland retail market
supported by strong local demand.
❑ Two retail developments, Taikoo Li Qiantan and
Taikoo Li Sanlitun West, opening in 2H 2021.
❑ Well-positioned for our growth strategy in core
markets with exciting pipeline.
40HKRI Taikoo Hui Q&A
South Island Place APPENDIX
2021 INTERIM RESULTS SUMMARY
THE ROAD TO BUSINESS RECOVERY
HK$M 1H 2020 1H 2021 Change
Revenue 6,551 9,068 38%
Valuation losses on investment properties (2,621) (2,525) n.m.
Operating profit 1,473 2,467 67%
Underlying profit 3,753 4,513 20%
Recurring underlying profit 3,702 3,716 0.4%
Reported profit 1,029 1,984 93%
Underlying earnings per share (HK$) 0.64 0.77 20%
Recurring underlying earnings per share (HK$) 0.63 0.64 0.4%
Reported earnings per share (HK$) 0.18 0.34 93%
First interim dividend per share (HK$) (1) 0.30 0.31 3%
HK$M Dec 2020 Jun 2021 Change
NAV attributable to the Company’s shareholders (2) 288,736 287,851 0.3%
Net debt 6,605 9,010 36%
Gearing ratio 2.3% 3.1% 0.8%pt
NAV per share (HK$) 49.36 49.21 0.3%
(1) First interim dividend for 2021 was declared on 12th August 2021 and will be paid on 5th October 2021.
43 (2) NAV refers to total equity attributable to the Company’s shareholders.KEY BUSINESS STRATEGIES
▪
Hong Kong Portfolio Map
SUSTAINABLE GROWTH IN SHAREHOLDER VALUE IN THE LONG TERM
Continue to create long-term value by conceiving,
designing, developing, owning and managing
transformational mixed-use and other projects in urban
areas.
▪ Maximise the earnings and value of our completed
properties through active asset management and by
reinforcing our assets through enhancement,
redevelopment and new additions.
▪ Continue with our luxury and high-quality residential
property activities.
▪ Remain focused principally on Hong Kong and the
Chinese Mainland.
▪ Manage our capital base conservatively. Taikoo Hui
44PROPERTY PORTFOLIO AT A GLANCE
A LEADING PROPERTY DEVELOPER, OWNER AND OPERATOR
Investment Props / Hotels Office Retail Hotels (1) Residential / Under Total Attributable Investment Props /
Attributable GFA (M sq ft) Serv. Apts Planning Hotels by Region (GFA M sq ft)
Completed
Hong Kong 8.7 2.5 0.8 0.6 - 12.6
USA
Chinese Mainland 2.9 5.4 1.2 0.2 - 9.7 2.4
U.S.A. - 0.3 0.5 0.1 - 0.9 9%
Sub-Total (A) 11.6 8.2 2.5 0.9 - 23.2
Under Development or Held for Future Development
CM
11.1 27.3
M sq ft
HK
13.8
Hong Kong 1.2 - - - - 1.2
41% 50%
Chinese Mainland - - - - 1.4 1.4
U.S.A. - - - - 1.5 (2) 1.5
Sub-Total (B) 1.2 - - - 2.9 4.1
TOTAL = (A) + (B) 12.8 8.2 2.5 0.9 2.9 27.3
Attributable Attributable
Trading Props Completed Prop Under Development / Total Investment Portfolio Trading Portfolio
Attributable GFA (M sq ft) Held for Sale Held for Development 27.3 M sq ft 4.5 M sq ft
Hong Kong - 0.7 0.7
Total Attributable Property Portfolio
U.S.A. and elsewhere - 3.8 3.8
Total - 4.5 4.5 31.8 M sq ft
As at 30th Jun 2021
(1) Hotels are accounted for in the financial statements under property, plant and equipment and, where applicable, the leasehold land portion is accounted for
under right-of-use assets.
45 (2) This property is accounted for under properties held for development in the financial statements.GEOGRAPHICAL ANALYSIS
TOWARDS A MORE BALANCED PORTFOLIO
Attributable Gross Rental Income by Region Net Asset Employed
Hong Kong Chinese Mainland U.S.A. Hong Kong Chinese Mainland U.S.A. and elsewhere
1H 2021 61% 36% 3% JUN 2021 80% 18% 2%
FY 2020 67% 30% 3% DEC 2020 81% 16% 3%
Completed Investment Properties GFA (excl. Hotels)
Hong Kong Chinese Mainland U.S.A.
JUN 2021 57% 41% 2%
DEC 2020 58% 40% 2%
As at 30th June 2021
46LEASE EXPIRY PROFILE
ONLY SMALL PROPORTION OF HONG KONG LEASES EXPIRING IN 2H 2021
Lease Expiry Profile as at 30th Jun 2021
Hong Kong Portfolio Chinese Mainland Portfolio
60.5% 54.4%
68.3%
79.1%
27.9%
25.0%
27.7%
17.4%
14.5% 17.7%
3.5% 4.0%
Office Retail Office Retail
2023+
▪ Top 10 office tenants occupied approx. 21% office area in HK. ▪ Diverse tenant base.
2022
▪ Top 10 retail tenants occupied approx. 26% retail area in HK ▪ Lease expiry profile well spread-out. 2H 2021
47TENANT MIX
A BALANCED TENANT PROFILE
Jewellery & Fashion & Others
Watches Accessories 20.9%
1.8% 29.5% Fashion and
Accessories
Jewellery and
39.6%
Watches
Supermarkets 2.9%
Food & 5.5% Chinese
Beverages
HK Retail Cinemas
Cinemas Mainland
19.8% 4.9%
4.2% Retail
Ice Rink Supermarkets
0.9% 5.6%
Department
Stores
13.4% Others
24.9% Food and Beverages
26.1%
Others
Others
11.1% Real Estate - 9.9%
related Financial
Financial
5.8% Institutions
Institutions
Trading 30.8%
39.2%
17.1%
Professional
HK Office Services Chinese
13.2%
Mainland
Real Estate- Office
related
7.6% TMT
15.2%
TMT Professional Trading
48 9.9% Services 25.1%
15.1%HONG KONG PROJECTS
REINFORCING THE TWO GLOBAL BUSINESS DISTRICTS
Taikoo Place
Hong Kong Portfolio Map Pacific Place
Two Taikoo Place
Artist Impression
Two Taikoo Place Wah Ha / Zung Fu 46 – 56 Queen’s Road East
redevelopment
▪ ~ 1M sq ft GFA ▪ ~ 779,000 sq ft GFA ▪ Pacific Place office extension
▪ 100% owned ▪ 100% owned ▪ ~ 218,000 sq ft GFA
▪ Superstructure works in progress ▪ Compulsory sale applications ▪ 100% owned
submitted in 2018
▪ Exp. Completion 2022 ▪ Basement works in progress
▪ Exp. Completion 2023
49CHINESE MAINLAND PROJECTS
SCALING UP INVESTMENT AND ASSET REINFORCEMENT IN BEIJING AND SHANGHAI
Beijing
Hong Kong Portfolio Map Shanghai
Two TaikooArtist
PlaceImpression
Artist Impression
Taikoo Li Sanlitun West INDIGO Phase Two Taikoo Li Qiantan Zhangyuan Revitalisation
▪ Taikoo Li Sanlitun retail extension ▪ INDIGO extension ▪ ~ 1.2M sq ft GFA * ▪ Revitalising historic Zhangyuan
Shikumen Compound
▪ ~ 256,000 sq ft GFA ▪ ~ 4.1M sq ft GFA * ▪ 50% owned
▪ Leasing and management
▪ 100% owned ▪ over 2x current INDIGO ▪ Opening in 2H 2021
▪ ~ 1.4M sq ft GFA *
▪ Opening in 2H 2021 ▪ 35% owned ▪ pre-leasing > 80% (above ground 0.6M sq ft /
below ground 0.8M sq ft)
▪ Excavation works in progress
▪ JV management company - 60% owned
▪ Phased opening in late 2025 and 2027
50 * On a 100% basisHONG KONG PORTFOLIO MAP
Completed Investment Props (incl.
Hotels) (100% basis)
Hong Kong Portfolio Map
Investment Props under Development
(100% basis)
5.47 M sq ft GFA 0.22 M sq ft GFA
Pacific Place 46-56 Queen’s Road East
4.1 M (Attri. basis)
Completed Investment Props (incl. Investment Props under Development
Hotels) (100% basis) (100% basis)
7.45 M sq ft GFA 1.0 M sq ft GFA
Taikoo Place Two Taikoo Place
& Cityplaza
6.9 M (Attri. basis)
51HONG KONG PORTFOLIO MAP
Hong Kong Portfolio Map
Completed Investment Props (incl.
Hotels) (100% basis)
1.33 M sq ft GFA
Citygate
0.27 M (Attri. basis)
52CHINESE MAINLAND – BEIJING PORTFOLIO
Hong Kong Portfolio Map
Completed Investment Props (incl.
Hotels) (100% basis)
INDIGO Mall
ONE INDIGO Retail occupancy 98%
1.74 M sq ft GFA EAST, Beijing Retail sales growth 6%
Taikoo Li Sanlitun INDIGO Phase Two Office occupancy 88%
(under development)
Artist Impression
Completed Investment Props (incl. Investment Props under Development
Hotels) (100% basis) (100% basis)
The Opposite House
TKL Sanlitun South
TKL Sanlitun North Occupancy 100%
1.89 M sq ft GFA 4.08 M sq ft GFA
INDIGO INDIGO Phase Two
TKL Sanlitun West (to open in 2021) Retail sales growth 85%
0.94 M (50% basis) 1.43 M (35% basis)
53CHINESE MAINLAND – GUANGZHOU & CHENGDU PORTFOLIO
Hong Kong Portfolio Map
Completed Investment Props (incl.
Hotels) (100% basis)
3.84 M sq ft GFA
Taikoo Hui, Sino-Ocean Taikoo Li Occupancy 95%
Guangzhou The Temple House Retail sales growth 66%
3.72 M (97% basis)
Completed Investment Props (incl.
Hotels) (100% basis)
Taikoo Hui Retail occupancy 100%
Taikoo Hui Towers 1&2 Retail sales growth 88% 1.66 M sq ft GFA
Mandarin Oriental Guangzhou Office occupancy 96% Sino-Ocean Taikoo Li
Chengdu
54
0.83 M (50% basis)CHINESE MAINLAND – SHANGHAI PORTFOLIO
Hong Kong Portfolio Map
Completed Investment Props (incl.
Hotels) (100% basis)
3.54 M sq ft GFA
HKRI Taikoo Hui, Taikoo Li Qiantan (to open in Sep 2021) Pre-leasing > 80%
Shanghai
1.77 M (50% basis)
Completed Investment Props
Taikoo Hui Mall (100% basis)
HKRI Centre 1&2
Retail occupancy 96%
The Middle House
The Sukhothai Shanghai
Retail sales growth 83% 1.24 M sq ft GFA
Office occupancy 99% Taikoo Li Qiantan
The Middle House Residences
55
0.62 M (50% basis)MIAMI, U.S.A. PORTFOLIO
Completed Investment Props (incl.
Hotels) (100% basis)
0.83 M sq ft GFA
Brickell City Centre
0.6 M (Attri. Basis)
Shopping Mall Retail occupancy (1) 97%
EAST, Miami Retail sales growth 71%
Under planning (100% basis)
1.97 M sq ft GFA
One Brickell City Centre
/ Other developments
56 (1) Including space allocated to prospective tenants who have signed letters of intent.HOTEL PORTFOLIO
Managed Hotels No. of Rooms Interest Owned but Non-managed Hotels No. of Rooms Interest
(100% basis) (100% basis)
Hong Kong The Upper House 117 100% Hong Kong Island Shangri-La Hong Kong 561 20%
EAST, Hong Kong 345 100% JW Marriott Hotel Hong Kong 608 20%
Headland Hotel (1) 501 0% Conrad Hong Kong 513 20%
Chinese
The Opposite House, Beijing 99 100% Novotel Citygate Hong Kong 440 20%
Mainland
EAST, Beijing 369 50% The Silveri Hong Kong - MGallery 206 20%
Chinese
The Temple House, Chengdu (2) 142 50% Mandarin Oriental, Guangzhou (3) 287 97%
Mainland
The Middle House, Shanghai (2) 213 50% The Sukhothai, Shanghai 201 50%
U.S.A. EAST, Miami (3) 352 100% U.S.A. Mandarin Oriental, Miami 326 75%
Sub-Total 2,138 Sub-Total 3,142
2,138
Total managed rooms
(1) Headland Hotel is owned by Airline Property Limited, a wholly-owned subsidiary of Cathay Pacific Airways Limited.
(2) Comprising one hotel tower and one serviced apartment tower.
57 (3) Including serviced apartments in a hotel tower.SUSTAINABLE DEVELOPMENT
SETTING NEW KPIS FOR 2025 AND 2030
SD Vision: Achieved Established
“To be the leading SD performer in our
industry globally by 2030”
80+ 40+
KPIs for 2020 milestone new KPIs for 2025 and 2030
The first real estate developer in Hong Kong and the Chinese
mainland to commit to
and support the transition to a net-zero emissions economy by 2050
Green financing constitutes ~30%
of current bond and loan facilities
58BUSINESS OUTLOOK
HK ▪ Resilient office portfolio with high occupancy. CM ▪ Optimistic about Chinese Mainland retail market as supported
Office Retail by strong local consumption.
▪ Leasing activity to show a gradual pick up.
▪ Continue to reinforce and expand our two core portfolios ▪ Strong demand for luxury brands in Guangzhou and Chengdu.
in Taikoo Place and Pacific Place. Steady growth in Shanghai. Continuous recovery in Beijing.
▪ Exciting pipeline of investment opportunities in first tier cities
▪ Mixed retail market in Hong Kong. and emerging first-tier cities including GBA region.
HK
Retail ▪ But further relaxation of COVID-19 restrictions should
help to boost retail sales. CM ▪ Improving office demand in Beijing and Shanghai.
Office
▪ Modest recovery in Guangzhou office market.
▪ Improving residential sentiment in Hong Kong.
Trading ▪ Outlook for hotels in Hong Kong remains challenging.
▪ Positive prospects in luxury residential markets in Hotels
Indonesia and Vietnam. ▪ Businesses in the Chinese Mainland and U.S.A. continue to
recover.
▪ Strategic capital management driving future growth.
Capital
▪ Accelerating sustainable leadership and digital
transformation of our business.
59© Swire Properties Limited
You can also read
