1H 2023 Half-Year Results Presentation

Good morning, everyone. Thank you for joining us in person to review Hong Kong Land's results for the first half of 2023. We are also very pleased to welcome those of you participating online. I'm Robert Wong, the Chief Executive of Hong Kong Land, and with me is Craig Bilti, our Chief Financial Officer. Following our presentation, there will be opportunities for questions. For those of you watching via the webcast, please send us your questions through the website and we will include them in the Q&A sessions. Today, I will take you through some key updates and half-year results highlights for investment properties and development properties before turning over to Craig to cover financial highlights.

I will then conclude with an update on the Group Sustainability and other corporate initiatives as well as our outlooks, followed by Q&A. Before I move into the half-year results in detail, let me first provide a brief update on our key business segments, along with observations in each of our key markets. In Hong Kong, headwinds in global financial markets have dampened office demand, especially from the financial services sector. The well-documented office supply surplus, predominantly in decentralized areas has resulted in an increase in vacancy across the city. The group's central portfolio vacancies continue to outperform the office market both across Hong Kong and within the

central district. This is driven by continuous flight to quality, demand from occupiers attracted to the portfolio central location, premium offerings and tenant services, as well as strong sustainability credentials. On luxury retail, trading conditions have improved significantly since the reopening of the border and the return of visitors, with tenant sales and food for approaching pre-COVID levels. Moving on to the Chinese mainland, despite the introduction of policy support measures, sentiment for the residential market was weighted down by the weak economic outlook in China and remained cautious in the first half of the year. The group's focus on premium residential products in selected top tier cities, as well as our

strong reputation for quality resulted in a better sales performance than the general market. Turning to retail, there was a strong recovery in tenant sales and food fall in the first half of 2023 at both WF Central in Beijing and one central Macau. In Singapore, office leasing momentum in the first half of 2023 continued to benefit from healthy occupier demand, although market sentiment has turned cautious as a result of softer demand from technology and financial services sector. Office rent continued to rise due to positive net options and a tight supply. On the residential side, buyer sentiment remains satisfactory despite recent cooling

measures targeted at tempering demand from foreign investors. Presales at the group's recently launched Tambazu Grant project were well received by the market. Turning to an overview of the 2023 half-year results, despite challenging trading conditions in a number of our key markets, I am pleased to say that the group produced a solid performance overall in the first half of the year. The group's underlying profit in the first half of 2023 was USD 422 million in line with the same period last year. The total profit contribution from the group's investment properties business increased on the back of a much-engroved performance from our luxury retail portfolio, which was partly offset by lower contributions

from the development properties business due to less-planted residential sales completions. Underline earnings per share was US$0.19 per share, a slight increase compared to the same period in 2022 as a result of the buyback and cancellations of 5% of Hong Kong land shares since the share buyback was launched in September 2021. The overall loss per share was US$15.5 after the impact of non-trading items. The loss attributable to shareholders was US$333 million after accounting for a net re-evaluation loss of US$755 million on the the group's investment properties portfolio, nearly all of which related to the Hong Kong

office portfolio. The net asset value per share at 30th June 2023 was US$14.51. The board has declared an interim dividend of US$0.06 per share unchanged from the prior year. The group's balance sheet remains strong. Now let's turn to some of the progress we have made in the first half of 2023. In April, the group commenced sales of Tampusu Grant, a residential development in the Khaton region in Singapore. The project was well received In the market, heaven sold 53% of the units on the launch weekend.

During the period, the group increased its investments into existing projects, acquiring a 15% interest in Yew City, a mixed-use project in Nanjing from Country Garden, and acquiring a 50% interest in Dreamland, a mixed-use project in Wuhan from Zhao. Both projects were acquired at a discount valuation, which resulted in one-off gains recognised in the results for the first half of 2023, amounting to US$72 million. The group also secured two new investments in Indonesia through its joint venture with Astra. New New Investments in the first half of 2023 was US$100 million. For reference, the group invested US$1 billion for the full year of 2022. The group's intent is to maintain a

disciplined approach when assessing new investment opportunities to navigate the current uncertain market conditions. In the first half of 2023, the group continued to progress on its sustainability goals, including the disclosure of scope-free emissions for the first time in our Sustainability Performance Report 2022, the development of bespoke tools to measure the carbon emissions impact from our projects and 3. The soft launch of a more comprehensive sustainability partnership program without tenants in Hong Kong. I will provide further details on all these items later on the presentation. Diving further into the commercial component of our development activities, I would like to take these opportunities to speak more

about the positioning of our retail portfolio on the Chinese Mainland. Inoperated by the launch of WF Central Beijing in 2019, the Central brand is Hong Kong Land's leading premium luxury retail series on the Chinese Mainland. The group expects to launch four additional central branded luxury retail properties from 2024 to 2027 in Nanjing, Chongqing, Suzhou and Shanghai, with an estimated attributable net-latable area of approximately 163,000 square metres. In April 2021, the group opened a seven-level shopping mall under the lifestyle retail brands The Ring in Chongqing. This property is the first in a series of moles under development using the RING brand.

The group expects to launch six additional moles under this brand from 2024 to 2028, with an estimated attributable net-lettable area of approximately 197,000 square metres. Upon completion in 2028, the group's total attributable retail net-latable area under the two brands will be three times greater than the current levels. These assets will provide the group with a strong source of growth in recurring income stream. Depending on their performance and market conditions after rents stabilize, the group will consider whether to continue operating these assets for long-term capital appreciations or to dispose of them and recycle capital invested.

Turning now to an update on the Westbun, construction is largely progressing on schedule, with completion expected in phases starting from 2023 through 2027. The first phase to be completed is the residential component, both for lease and for sale. The residential properties for sale component will be launched later this year. The buildings are now undergoing interior feet-out work with completion expected by the end of 2023. The second phase, which is expected to be completed in stages between 2024 and 2026, consist of low and mid-rise offices, luxury and lifestyle retail. Currently, the basement and superstructure works are in progress. The final phase will consist of the office and luxury retail for lease, as well as luxury hotel and service apartments, which are expected