# Hongkong Land Holdings Limited — 1H 2025 Half-Year Results Presentation Event: 1H 2025 Half-Year Financial Results Webcast Presentation & Analyst Briefing Date: 30 July 2025 Issuer: Hongkong Land Holdings Limited (SGX:H78) Provenance: automated speech recognition (asr) of the issuer's public webcast recording Source recording: https://webcast.irasia.com/hkland/halfyear/2025/archived/ Official record: https://www.hkland.com/en/investor-relations/ Presenters: Michael Smith (Chief Executive), Craig Beattie (Chief Financial Officer) Words: ~10,006 Unofficial machine transcript. Prepared by SMID Research from the issuer's public webcast recording by automated speech recognition, without a full manual check: expect mis-heard names and figures. There is no speaker attribution: the source recording carries no diarisation, so cues are shown as timestamp and text only; timestamps refer to the recording. Not a company publication. Hongkong Land Holdings Limited's own investor relations page (https://www.hkland.com/en/investor-relations/) is the authoritative record. Copyright in the briefing rests with Hongkong Land Holdings Limited; contact contact@smidresearch.com for corrections or removal. --- [00:00:02] Good morning, everyone. A warm welcome to you all and thank you for joining us either in Hong Kong live or online I'm Michael Smith the chief executive of Hong Kong land and with me as Craig Beatty our chief financial officer Since the last time we met back in March We've continued building momentum and delivering on our initiatives which underpin the initial phases of our new strategy I am incredibly humbled by the continued support from many of you who have strongly endorsed not only Hong Kong Land's new direction, but the progress and announcements that we have made today. Some of you may recall that I highlighted the key areas of focus for Hong Kong Land with priorities 1, 2 and 3 relating to capital recycling. While we are incredibly pleased with the announcement in April of our landmark transaction with the Hong Kong Stock Exchange, work continues on a number of other initiatives, very important initiatives to recycle capital, which we are confident of delivering in the months ahead. [00:01:08] Now let me talk you through some of the details of what I just outlined, as well as go through our interim financial results for 2025. We'll have plenty of time for questions following the presentation. 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 session. Here's the structure for today's presentation and let's otherwise state it all numbers quoted will be in US dollars. So let's begin. Turning first to an update on the overall strategic pivot of the business on which we continue to build strong execution momentum. On portfolio recycling we have reached 1.3 billion. In less than 12 months since the launch of our new strategy, we have already achieved 33% of our 2027 target. This includes the transaction with the Hong Kong Stock Exchange, which crystallizes independent [00:02:10] valuations and the central portfolio's NAV, further underlying both its attractiveness and its scarcity. As I mentioned earlier, this remains a key focus for the management team, with more announcements expected as other initiatives progress. On capital management, consolidated debt is down 200 million. The interim dividend is maintained, although our very strong intention, our conviction, is to deliver annual, mid-single digit growth in DPS remains unchanged. Finally, we have fulfilled our commitment to allocate up to 20% of net proceeds from capital recycling into share buybacks. The 200 million program announced in April is actively underway. On third party capital capabilities, Michelle Ling, who's sitting here, who joined us as our CIO earlier this year, has been busy building out our capabilities on portfolio recycling, [00:03:11] new investments, and partnering with third party capital providers. With her team now largely in place, they have been actively elevating Hong Kong land's profile amongst private market investors. One of the core pillars of Hong Kong land strategy is a focus on ultra-premium integrated commercial properties or UPICPs. The $1 billion tomorrow's central transformation continues to gain momentum with some exciting new opening scheduled before the end of this year. To position the central portfolio and wider district for the future, we are looking to take a stewardship role in further elevating the core central district for both tenants and the wider community. In Shanghai, Westbourne Central is also seeing strong momentum, attracting well-known international tenants such as Adidas. I will provide more details on all of this later in the presentation. Since the launch of our Strategic Vision 2035, we have spoken at length about no longer [00:04:15] investing in the build to sell segment. In order to enhance decision making and accelerate the recycling of capital, we have initiated an organizational restructuring of our build to sell business in China. Finally, at the core of our 2035 vision is a focus on total shareholder return or TSR. In the past, Hong Kong land management teams had minimum shareholdings in the business. With the introduction of a new renumeration framework, which includes the group's first long-term incentive plan, which we announced back in March, there is now significantly improved alignment with shareholders. As at the end of June, members of the board and the senior management team collectively hold over 1% of the group's total free flow. The ability to recycle capital is fundamental to the long-term execution of our strategy. We've made significant progress towards our target [00:05:16] of recycling at least $4 billion by the end of 27, achieving 33% of that target so far. The most notable transaction is the strata title sale of One Exchange Square, parts of One Exchange Square to the Hong Kong Stock Exchange. This not only secures their permanent iconic home at One Exchange Square, but it also ensures their long-term presence in our central ecosystem. Net proceeds from the transaction amounted to 5.9 billion Hong Kong dollars, which is in line with the latest valuations prepared by independent valuables. The remaining net proceeds recycled were from bill-to-sell portfolios, including 0.4 billion from the Chinese mainland and 0.1 billion from assets in Singapore and South Asia. One of the most critical success factors for Hong Kong land is living up to the vision, the ideal, that experience is central. Effective execution of our strategy over the long term [00:06:19] requires constant innovation and reinvestment in our portfolio anchors. I wanted to show you briefly some highlights on work being done to enhance our central portfolio ecosystem. Firstly, on tomorrow's central, since kicking off in the second half of last year, the transformation continues to gain momentum. Our initial phase of work is expected to begin bearing fruit with a number of exciting openings scheduled to take place over the next six to eight months. Many of our long-standing tenants and concepts have embraced Tomorrow Central and put in significant investments in their presence at the landmark. To highlight a few examples, we have three flagships all with new interiors including Bokelete, which is already open, as well as Petit Philippe and Yumyu, which will open in the next few months. The fully renovated China Tang reopened in recent months also, and a 14,000 square foot fully renovated Rubishan will reopen later this summer. [00:07:23] In addition, there will be a number of new to landmark concepts. Many of you may have seen the announcement in May of the unveiling of a new concept by award-winning French chef Daniel Balut. This will be Terrace Balut's inaugural presence in Asia and will open on the 25th floor of Landmark Princes, featuring expansive rooftop terrace with unmatched views of the Hong Kong skyline and the harbour. We're also very excited to have two other firsts, including Scarped Ellie, which will have its first store in Asia at the Landmark, and Joseph Declos, which will have its first store in Hong Kong at the landmark. Finally, many of you would have seen hoardings at Landmark yourselves. We are also eagerly anticipating the opening of both the Prada and St. Laurent Maisons before the end of this year. I'm expecting these openings to be spectacular and really something quite unique for the city. Separately, we'll be working closely with the Hong Kong Stock Exchange to deliver asset enhancement initiatives at our Exchange [00:08:26] Square complex. By delivering a permanent home that the Hong Kong X can be proud of, we will further strengthen Central's interconnected financial ecosystem and Central's importance to the city and the region. In addition to the group's assets, we are also exploring ways to strengthen the Central District for the future. Our ambition is to transform the core Central area into a hub comparable to the best of what New York, London and Tokyo has to offer. The three core components of our work will include urban space improvement. This includes master planning urban spaces in Core Central to improve connectivity, create experiential moments and enhance public space engagement, as well as improving streetscapes via placemaking and placekeeping initiatives. Activations and programming focused on year-round activation of the district through arts and culture, heritage and other activities. And finally community engagement and [00:09:30] partnerships, leveraging public and private sector partnerships and continued investments by Hong Kong land and other stakeholders in central as well as engagement and partnership with NGOs. Turning to an update on Westbund Central. Following the successful launch of phase one last year, in particular the residential units that were sold at record prices and the debut of Westbund Central Residences, the team has been hard at work pushing ahead on the second phase of the project. Phase 2 of Westbourne Central Residences will open in the second half of 2025 with approximately 176 units expected to be available immediately, which we will manage, followed by an additional 600-plus units to open in phases starting in 2026. Given the success of the service residences, the central residences in Phase 1, which are currently near 100% occupancy, I think 96, 97% occupancy, we are confident that the [00:10:30] new units will also be well received by the market. The office component, which has a GFA of 78,000 square metres, is being progressively handed over to tenants. In light of the well-documented challenges of the Shanghai office market, this is a remarkable result and demonstrates the unique positioning of the Westbun Central development. We are excited to have welcomed Rossino, an affiliate of the Sinophon group who have now already taken over a full tower of their, as their China headquarters. We will soon be welcoming Lulu Lemon who have also taken up another full tower as their China headquarters and I'm very very happy to announce here that we have secured Adidas who will be relocating their Greater China headquarters to Westbourne Central, excluding business parks, the Adidas leasing transaction was the largest new grade office leasing transaction in Shanghai since 2023. Moving on to the retail component of phase two, it will comprise 27,000 square meters [00:11:34] GFA of retail space with contemporary fashion and lifestyle positioning. Pre-leasing is on track with opening expected in mid-26. On the personnel front, we're incredibly happy to have Stuart Grant now on board as the chief executive of this project. Stewart has over 30 years of real estate experience, having overseen the management of $20 billion US worth of assets across Asia when he was a partner at Blackstone, and most recently in a partnership with Brookfield in the UK. Stewart has vast experience on how to build unique ecosystems. He really knows what good is, and he understands the importance of partnership. After having moved his family to Shanghai, he has already hit the ground running, reshaping teams and responsibilities, as well as working closely with our partners. We are extremely excited about this project, and I urge any of you who have not seen it in person yet, definitely let us know when you're going to Shanghai next because we really wanna show you. [00:12:34] Now for those of you who still haven't made it up there, we have a short clip which will give you some idea on how the project is progressing and how it's taking shape with a strong team behind it. [00:14:21] Getting back now to the presentation. Further to the opening of the Ring in Chengdu last year, the group continues to deliver on its lifestyle retail pipeline in China. In April, our 50% owned retail mall in Nanjing, JLC, had a successful soft opening. The 44,000 square meter project is located in the heart of Xinjiku, Central Business District, and has an affordable luxury positioning. The mall has attracted a very strong footfall and is well received by our tenants today. The grand opening is scheduled for September this year where we expect occupancies to be around 90 to 95%. The group has four more lifestyle-focused retail projects which will complete over the next 12 to 18 months. As the trading performance of these assets stabilise, the group will look for opportunities to recycle capital from this portfolio. As the group executed stated strategy of exiting the Build to Sell segment, We have proactively initiated an organizational restructuring [00:15:25] of our build to sell business in China. The goal is to streamline internal governance structures, structures to accelerate inventory turnover, centralized decision making for greater efficiency and faster execution, and ensure the retention of expertise so that we can build quality as projects are divested. The initial cost savings is expected to be circa $16 million for 2025, while annual savings is expected to reach circa $50 million by 2028. I'll now pass over to Craig, who walked through our interim results and financials. Thanks, Michael, and a pleasure to be here. Good morning. So, I'll now take you through our financial performance in the first half of this year, and all numbers referred to in the presentation are in US dollars, unless otherwise indicated. So let me expand on a few of the numbers on this slide before covering the rest in more detail in subsequent slides. Excluding the impact of provisions in the Chinese mainland bill to sell business, underlying [00:16:27] profit was $320 million, 11% increased year on year, primarily due to higher contributions from the bill to sell projects in Singapore. EPS was $14.56, up 12% year-on-year, which further benefited from shared buybacks. At 30th June, the valuation of the group's Hong Kong office portfolio was $17.7 billion, stable compared to the end of last year. This is the first time that the Hong Kong office valuations have stabilised since prime office rents began to decline in 2019. Operating profits from prime property investments decreased by 57 million year-on-year due to negative rent reversions in Hong Kong office, as well as the temporary impacts from the ongoing renovations at the landmark. Operating profits from the build-to-sell segment, excluding one-off provisions, increased by [00:17:28] 95 million year-on-year, primarily due to more contributions from Singapore projects and to a lesser extent more planned completions on the Chinese mainland. Net financing charges were lowered by 11 million year on year primarily due to lower net debt. And this was offset by higher taxes in Singapore due to the higher profit contributions that I mentioned there. Turning to rental income, which was down 6% year on year, mainly due to an 8% decline in contributions from Hong Kong office. Our Hong Kong and Singapore portfolios continued to outperform the market, benefiting from a flight to quality. Rental income in Hong Kong retail, as I mentioned, was temporarily impacted by the ongoing renovations and landmark, but this was partially offset by positive rent reversions, as well as resilient tenant sales from a robust VIC customer base. In Singapore, there was stable growth in our portfolio supported by low [00:18:30] vacancies as well as positive rent reversions. Rental income from our Chinese mainland portfolio increased by 15 million dollars driven by a combination of new mall openings as well as higher rental income from the existing malls in Chongqing and Beijing. And the performance from the hospitality and other segments were down mainly due to the temporary closure of landmark Mandarin Oriental as part of our tomorrow's central renovations. Turning now to the operating profit from the group's bill to sell business, and please note this slide includes the group share of John Ventures and Associates. Profits in Singapore were higher primarily due to the completion and handover of a coping grand, a large project which was fully sold. Profits from the Chinese mainland, excluding inventory provisions, increased year-over-year due to the timing of project completions. And despite government stimulus measures, Chinese mainland market sentiment remains subdued and sales momentum across the [00:19:36] group's projects remain well below historical levels. Contributions in our other markets were stable. In the first half of 2025, 23 million of non-cash provisions were taken in respect of residential projects in Wuhan where sales prices were reduced and this compares to 323 million of provisions in the same period last year after an extensive review of all our China inventory that we undertook last year. Net asset value per share at 30th of June was $13.62 up by 5 cents compared to the end of 2024, driven primarily by stabilising valuations in the Hong Kong office portfolio as well as the ongoing shared buyback programme. As we mentioned, it's worth noting that this is the first time since 2018 that net asset value per share for Hong Kong land has increased. There are positive contributions from the resilient [00:20:38] recurring underlying earnings and as I mentioned earlier the shared buyback program is underway with slightly over half of the announced 200 million US dollars having been invested as at the end of June. Net exchange translation differences mainly related to assets on the Chinese mainland and Singapore which had a higher value due to the strengthening of the renminbi in Singapore dollar. Let's turn now to an update on dividends and shared buyback. As Michael mentioned, the group has declared an interim dividend of 6 cents per share unchanged from the first half of last year and we remain committed to delivering mid-single digit annual growth in dividends per share which will result in the doubling of our dividend by 2035 to 44 cents per share. In April this year, we announced a 200 million shared buyback program, which aligns with our capital management principles of allocating up to 20% of net proceeds [00:21:40] from recycled capital back into investing into our shares. And as you've seen, the buyback programs continued during our blackout period. And as of the end of July, about two thirds of the program has been invested. Turning now to treasury matters, the maturity profile of the group's debt is shown on the left-hand side of the slide, and the debt maturities are staggered over a number of years and are well-diversified between both banks and debt capital markets. The group's in a really strong financial position with respect to any further refinancing plans on its maturities in the second half of this year. The average tenor of our drawn debt at the end of June was healthy at 5.9 years, an average interest cost decreased to 3.4%, down from 3.6% at the end of 2024, driven by lower average interest costs on renminbi borrowings and to a certain [00:22:40] extent in Hong Kong dollar. 70% of average gross debt was at fixed rates. At the end of June, the group had available liquidity of 3.1 billion. And our credit ratings with S&P and Moody's remain unchanged and strong at A and A3 respectively. Let's jump now to an update on our leasing and operational performance in our key portfolios, starting with Hong Kong office. Average net rents were 95 Hong Kong dollars per square foot per month due to negative rental reversions in the period, but our vacancies have improved. in a committed basis was 6.9% compared to 7.1% at the end of last year and this compares to market vacancy of 11.8% for Hong Kong Central Grade A office in the mid-year which demonstrates our continued outperformance relative to the central market. [00:23:42] Our overall weighted average lease expiry stood at 3.6 years whilst the average lease expiry for our top 30 tenants, which makes up about half of our lettable space in Central, was at 5.1 years. As at the end of June, 6% of the office portfolio is subject to expiration in the second half of this year, but our team has been proactive in managing discussion with tenants and including concluded renewals to date. This has decreased to 1% of our portfolio with the vast majority of tenants opting to remain within the portfolio. Moving on now to luxury retail in Hong Kong, average retail rents continued to show growth, increasing by 7% and 2% compared to the first and second half of last year respectively. This was driven by positive base rent reversions reflecting the strength and attractiveness of the landmark. Occupancy, excluding the areas currently closed for renovations, remained high at 97%. [00:24:48] And our weighted average lease expiry at the end of June was 3.3 years, jumping significantly from 1.8 years at the end of last year, which is reflective of the long-term commitments that we've secured as part of Tomorrow Central, and these lease deals are now starting to come into operation. Overall, tenant sales were down by about 10% compared to the first half of last year, but this was an excellent result, considering the large amount of flow rate that's temporarily out of action. And most importantly, the landmark's targeted segment of ultra-high net worth individuals saw good growth year on year, which Michael will elaborate on shortly. Turning now to our Singapore office portfolio, which has performed very well, driven by flight to quality demand and a tight supply of new office space in the CBD. Rents continue to grow. Average gross rent across our Singapore portfolio in the [00:25:48] first half was 11.4 Singapore dollars per square foot per month, a 3% increase from the second half of last year due to positive rent reversions and the portfolio remains effectively fully let with committed occupancy of over 98%. Our overall and top 10 tenants on a weighted average lease expiry basis both stood at 3.6 years and at the end of June 5% of the portfolio is subject to expiration in second half of this year. I'll now pass back to Michael who will provide you with an update on our key markets. Thanks Craig. For those of you who watched CNBC this morning you would have seen Craig calling the bottom of the offers my I'll add a little bit to that so sentiment has noticeably improved since our last update in March with clear signs of stabilization in core central driven by net positive absorption and a narrowing decline in spot rents. What we really see is a flight to quality trend which leads to a [00:26:52] fragmentation of the office market that has definitely continued in the city. We are seeing divergent fortunes between different segments of grade A stock with rents for trophy or ultra premium assets such as ours being the net beneficiaries. This coincides with the easing of the supply overhang over the past several years as vacancies of the super prime buildings in particularly have declined over the past year. Our central office portfolio was also closely linked to the capital markets as many tenants or prospective ones are asset managers, accountants, lawyers and consultants, sort of professional capital markets type people. So IPO activity has shown a notable rebound as everyone has seen in the press with net proceeds raised in the first half of this year already surpassing the total funds raised for the entirety of 2024. The latest projections indicate net proceeds are likely to reach 25 billion with the number of listing applications in the pipeline exceeding 200. So that ecosystem of professional services within our [00:27:56] portfolio really enjoys this type of capital markets activity. As IPO proceeds and trading volumes have historically been positively correlated with net absorption of greater a office space in Central, we expect trading conditions to turn more favorable for our Central portfolio. On the retail side, while the broader luxury retail market has softened in the first half of this year, we continue to see the strength of Landmark from the ultra high net worth segment. And this is a segment that is very, very resilient, doesn't care as much about political uncertainties or geopolitics or what's going on. They really have enough capital to continue spending. So comparing year on year spend with these top tier customers, our top 70 customers at Landmark increase their spend by 8% compared to first half 24. Similarly, the spend from the top 100 customers increased by 7%. And even across our top 1,000 customers, the spend at Landmark continued to be resilient, up 2% [00:28:59] compared to the same period last year. And these are really quite remarkable results in light of the well-documented challenges for luxury retail due to lower average spend by visitors to the city. Landmark continues to maintain strength in high-value transactions, with sales of single transactions over 100,000 Hong Kong up 4% year on year. People come to the landmark to make that really important watch or jewelry purchase. Another data point worth mentioning is on landmark transactions, the combined value of the top 10 single transactions at Landmark reached $213 million Hong Kong dollars, up 81% compared to the first half of the year. So as people, as that end of the scale becomes more confident, maybe they're involved in capital markets or IPOs, the propensity to spend spend in large volumes tends to be drawn into the landmark. Moving into Singapore office, where we see generally favorable demand supply dynamics over the next several years, which is likely to result in a steady growth in gross rents. [00:30:03] New office supply in the CBD will only amount to 2 million square feet from 26 through to 29, which is less than 6% of the total existing stock. Furthermore, the Urban Renewal Authority released its draft master plan 2025, detailing upcoming the city's development priorities. The plan suggests that upcoming new supply of CBD office will remain very limited even beyond 2029, so that supply-demand dynamics in the premium quality office market of Singapore is very, very strong. Turning to the Shanghai office market, which is not so good, but as most of you are aware, The market continues to be over-splied, with demand being subdued due to a cautious short-term economic outlook. Vacancy for Grade A offices across the city was just around 25% as at the end of June, while the vacancy in the Westbun sub-market was slightly lower and about 23.5%. Despite the challenging backdrop, the Westbun Central Project has outperformed with 100% [00:31:05] of the offices that we've launched being committed due to its high-quality and unique riverfront positioning. Leasing transactions at Westbourne Central made up a quarter of all transactions in the Westbourne submarket by fall area since 2024. And for people like Adidas and Lululemon who have relocated and made that location their China headquarters it's just a great endorsement of the future of that property. Similar to other commercial hubs globally and our own experience across Asia Gateway cities we expect a continued flight to quality and a bifurcation of grade A office markets in Shanghai to widen over time, similar to Hong Kong. You can see in the two graphs on the right-hand side that premium integrated properties in Shanghai have outperformed standalone assets both in locations nearby as well as across the broader market. As Westbourne Central matures into an ultra-premium integrated commercial ecosystem over time, We also expect sustained outperformance in rents relative to both the overall market [00:32:08] and standalone buildings within the same area. Turning now to outlook for the remainder of the year, let me take a moment to go through our thoughts across key markets. Firstly for Hong Kong office, we genuinely expect further stabilisation for core central, with demand focused on well-managed, interconnected, high-quality buildings such as ours. The recovery in Hong Kong's equity markets, like the IPO pipeline and recent office deals, signal stabilization for Hong Kong's, Hong Kong Land's ultra-premium offering. Even though this will take some time to result in neutral reversions, we expect negative reversions to narrow in the second half of the year. Another trend likely to continue holding is the bifurcation between ultra-premium and average grade A offer stock, as the most active occupiers are largely central focused and they really prioritise on quality of building and connectivity of the ecosystem. For the landmark, the initial phase of tomorrow's Central will begin bearing fruit with a slew [00:33:13] of openings towards the end of this year. The short-term priority continues to be to ensure that the landmark has the right mix of offerings to serve customers and office tenants during this transformation. As you saw in previous slides, the ultra-high net worth community has remained resilient, And we expect this to continue into the remainder of this year. In Singapore, we expect positive reversions to continue on the back of limited supply in the CBD and a largely stable economic outlook. For China, we do remain cautious on the short-term trading outlook. Our focus on Westbund, monetization from the build to sell segment, and active management of our lifestyle retail pipeline remain unchanged as we continue to navigate challenging market conditions. So now let me close by circling back to our strategy and priorities for the remainder of the year. On portfolio recycling we are maintaining strong momentum. It's a pity you can never time things perfectly, but you know we're working on a number of really exciting initiatives that we'll love to share with you over coming months. [00:34:20] On capital management our approach remains consistent. 80% of recycled net proceeds will be used to reduce net debt and build capacity for new opportunities. with the remaining 20% of proceeds allocated to share buybacks. In line with the announcement of our existing 200 million buyback program, future buybacks will continue to be funded by capital recycling and therefore further up-sizing of the buyback will be subject to the successful execution of the capital recycling initiatives that we have in hand. With regards to dividends we have held the interim dividend stable but our intention and a strong conviction is to deliver mid single digit percentage point growth in full year DPS and that remains unchanged. On third party capital, Michelle and her team are making excellent headway with further establishing Hong Kong land's presence in the private markets and re-engaging with like-minded capital partners. For our ultra-premium gateway assets, the [00:35:21] work does not stop. From tomorrow's central in Hong Kong to westbound central in Shanghai, to focus on delivering best-in-class execution across our Ma Ke projects. I also mentioned earlier our intent to play a leadership role in shaping the future of Hong Kong Central. Those place-making and place-keeping efforts will start to become more visible to you and to the community in the months ahead. And lastly, with a strong investment management team now firmly in place, we are also actively assessing new gateway development opportunities in places like Tokyo and Seoul and Sydney and thinking about when we're going to set up teams and actively looking at opportunities to redeploy the capital that we will be recycling from the initiatives that we have in hand. We've built really, really solid momentum, have many more exciting milestones on the horizon which we all really look forward to sharing with you. So we thank you for your support and we're happy to take any questions that you may now have. three, four, bang. Mr. Dano. [00:36:22] Okay. Thank you very much. This is Karichan from JP Morgan. We have been a very happy tenant of Hong Kong land. Fantastic. So two questions from me. The first one is obviously still on the Hong Kong office market. So just now you mentioned that we might be closer to the bottoming of the Hong Kong office market, right? So just curious, going into 2026, what would be our base case expectation for the rental refersion? Do we expect it will already turn stable in 2026? And can I also check a bit on your thoughts on the upcoming supply in Central. Because some large investment bank is moving to Shim-Sachui and then Site 3 and also the Henderson and CKC2, they're all massive supply in the pipeline. So how do you see the competition and the impact on our portfolio in the landmark? So that's my first question. And the second question is obviously capital recycling. Can you share a bit more on the latest progress on capital recycling? [00:37:22] What kind of assets that we might be considering to sell? And then would we consider selling any assets below book valuation? Because obviously, the extreme square deal was very good. It was sold at book valuation. But if opportunities arise, would we consider selling at below book valuation? So that's my two questions. Thank you. Thanks, Carl. Three questions. Yeah, great question. Do you want to start with the first one? Yeah, I think in terms of rents, obviously, we've been talking today about the stabilization of prime office rents in Hong Kong. I think this is really a good news story. Second quarter, central rents were broadly flat. I think we've seen increasing capital market activity, the stock exchange deal, the Jane Street lease deal, which is a huge deal in any market. So I think all these sort of positive mementums, the stable valuations in our portfolio, I think really talk to the quality of the portfolio, but also potentially the market starting to stabilize. In terms of what that means for our rental income, there's obviously a lack of effect between our portfolio average rents and spot rents. [00:38:28] And so whilst the, hopefully the sort of spot market is starting to stabilize, there will still be a period of negative rental reversions for Hong Kong land, which is, as Michael mentioned, we expect to start to narrow in the second half of this year. And I still expect there to be some negative rental reversions in 26. But really towards the end of that year, we should start to see the market hopefully bottom out from that point on. And I think maybe on the supply, and I'll let Michael do the capital recycling on the supply point, we don't feel that there's a lot of supply in Central. I mean, the new buildings that you've referenced have been in the market for a number of years now. The largest tower is 85% committed. The GPO site project, 70% pre-committed already. So actually, the best stock, and there really is limited amount of stock when I talk about the best stock, [00:39:28] including Hong Kong land's portfolio. But there's no additional supply beyond that. So really, now what you're seeing is the good quality buildings that are available. They're basically being taken up. And so less available supply, increasing capital market activity, really supply demand dynamics, hopefully might start to turn in our favor. So let's see. Capital recycling. Yes, so, Karl, capital recycling, as I mentioned, it's really challenging to time things perfectly, right? So I think last time we met in March and then we came out in April and announced the Okanosock Exchange transaction. So if we could synchronize, great, we'd love to have done that today, but we can't. But we really are very, very focused on this. I'm not kidding, with Michelle's team, all of us are our first, second, and third thing, because we know that unless we recycle capital, we can't reinvest and do things we want to do in our ultra premium to grow the commercial property. So it's very difficult to talk about any specific project. We would love to be back here in not years, [00:40:30] but months to be able to share with you some of these activities. In terms of pricing, I feel personally that we set out, when we get our assets independently valued every six months, that's the price of the assets. And the Hong Kong Stock Exchange recognized that and paid the full price for our assets, or the valuation for our assets. That our NAV is the value of our assets. So I'm not an advocate of selling those prime type of investment property assets at anything less than what the independent valuables is. So transactions of that nature, that's the value and that's what we focus on. I think in China with our residential, we need to be more thoughtful around as we divest some of those residential projects, particularly in some tough markets like Wuhan. And some of our medium term least assets in China, some of the office stock, some that are in challenging markets, to recycle the capital, maybe there, there may be some instances where we may have to think about a discount to book value, but most of that is carried at a historic cost, most of that stuff. So it's not like it's an independent valuation being marked out, but some of that is, [00:41:31] particularly some of the office stock in second tier markets, it's quite challenging. So if we have a legitimate opportunity to sell, and we've had a couple of cases recently which have been quite encouraging, of some of our office being sold to other individual floors or whole buildings, to mainly SOEs, which is great because that hasn't happened for a while, then we'd have to be very realistic about what their price expectations are versus ours. But for our investment portfolio, the valuations, the valuation. So I would be very anti anything less than that. Thank you, this is Cindy from CT. So three questions for me. The first one is also on capital recycling. So apart from direct dispossession, will you consider other Chinese for capital recycling, for example, spinoff listing, typing C rate market in mainland China, or some other more, say, diversified China is to accelerate capital recycling. This is first question. [00:42:31] The second question is actually on your buyback plan. So you mentioned further upside would depend on capital recycle, but would it only depending on very sizable deals, such as Exchange Square, or would the regular progressive windup of your built to sell business, sufficient to fund another say, let's set about buy-back, and also in terms of considerations for buy-back, would share price affect your decision making? The third question is on your new investment management team, which set up in the first half. So just trying to understand a bit more on the setup of this team, let's say it's lead by Michelle and reporting directly to you. So what are the KPIs for that team? Is it based in Singapore or like originally diversified? And with the team focusing like say short term wise more on capital recycling or I think you also mentioned now looking for new investment opportunities so how to balance this too, thank you. [00:43:33] I'm trying to remember them now. First question was around, well sort of portfolio recycling into. And structures. Yeah, I've had a history, Michelle's had a history. A lot of our team members have had history in the capital markets, and we've always got our eyes wide open. Our China portfolio is still being stabilized. Now our property in Chongqing, Chongqing Ring, is now in its third or fourth year, is doing incredibly well. You know, that is now in a yield on cost basis where I think we could use that as a seed asset for a China REIT. But there are other assets that have just been completed that still need to stabilize probably will take some years before the rental reversions, the first leasing cycle come through, and with our activation and our sort of care, we can bring the yields up to make it a more compelling proposition. So definitely not ignoring that opportunity, but I think our portfolio still needs a little bit of time. And possibly the C-Rip market also needs a little bit of maybe work in terms of making it, I know Capital Land are venturing into that market, so it'll be great to see how they progress and what lessons we could learn from that. On the last question, you want the second one? The last question, Michelle and the team, [00:44:35] the KPI is I think initially it's all about capital recycling. So the team that Michelle's assembled across Singapore, Hong Kong and China, so it's not a Singapore business although she spends most of her time here in Singapore and Shanghai and everywhere else in between. The team itself is across because our assets are across and we're looking at every possible opportunity to recycle capital in a meaningful way. So that is the most short term KPI but beyond that, the creation of a real asset management, fund management business is a big priority of ours. And I know some of our peers have said that they were going to do things in heaven, and we're very, very focused on doing it really well. And really, really well when we come back to you and say this is our first initiative, that you all go, okay, this really makes a lot of sense, this is great. So that's what we're aiming for as well. So it's capital recycling, creating fund management opportunities. And probably the third leg then is how will we recycle into more into Singapore, possibly, Seoul, Tokyo, Sydney, the new market opportunities that may present themselves. So those are probably the three buckets of KPIs. I can't remember the second [00:45:36] question. So in terms of the buyback, our intention is to upsize that over time as we recycle capital. We can do that in two ways. I think when we announce larger recycling events, then there's probably going to be a large amount of recycling that we would announce to the market. But we've always got the option to go in and buy shares. So to your question around would we continue to buy back shares just as we wind down our bill to sell business, that's entirely possible. So I think there's two ways. It's not just a big bang announcement. You might see us going in the market from time to time. I think to your second point around share price and of course we look at the returns that buying back our shares are expected to generate for us over the long term and for investors and we measure that return against our cost of capital. So there's, you know, as we contemplate investing in new growth projects, as Michael mentioned, [00:46:38] we're always looking at the relative returns from the buyback to what we could generate from investing that capital in new projects and also looking against our cost of capital overall. So if it gets to a point where the share price and indicates that, you know, buying back the shares is not the best use of capital, then we would stop. But the only thing I would say is our net asset value per share at the end of June is $13.62, and the share price is $6.40. So I think we've got a little bit to go yet before we get to that point. Nikhil? All right. Thank you. A couple of questions. First, regarding Westplant, definitely very impressive performance in terms of office leasing and very difficult market. Can you give us more sense about the rents achieved? And also, as you are thinking about the project on a more medium term, longer term basis, the milestones that we can expect with upcoming completions and how much of a rental income boost the project can provide to you [00:47:40] on a more medium term basis. Now that you actually have some firm commitments already and should have a better sense. And second is, going back to the comments earlier on the Yuan cost for the Chongqing ring, and also I think you had the completion of the Chengdu Ring series as well. Can you give us more color on the returns? And that probably will give us some better sense about how quickly you can accept these more sort of mid-tier kind of moths that you don't necessarily plan to hold onto longer term. Thanks. Maybe I'll answer the first one. So in terms of the office market in Shanghai, as we've said, it's a very, very tough. It's a very competitive market. There is a lot of oversupply. I think that other supply is quite bifurcated and quality office that we're building in Westbourne and managing and putting Stuart Grant there and everything that we're doing is attracting demand and attracting interest. Where Adidas and Lululemon are located, [00:48:40] it's a real lifestyle type of location for Westbourne and it's review nobody on a Sunday on a weekend there's literally thousands of people walking down with pets and roller skates and everything else. So for Adidas and Lululemon that's a great location for them to express their brand and to really get the, you know, and we're gonna get the benefit too of them not just being office tenants, but I suspect they're all gonna wanna open quite large retail properties or retail flagships across the 600 shops that we're gonna have across the mall. So, you know, there's a real ecosystem benefit in having them there. So, can't go into details about office rents, but they, you know, it was, they wanted to be there, you know, and they left a building that they're only there for seven years to come across to us, and quite an expensive cost to them to relocate and everything else. But that, to me, was a real endorsement commitment for Westbourne and what Westbourne will be in the future? I think in terms of the second question you're asking about the relative contribution I think from Westbond. I mean just to remind everybody Westbond is construction as well underway as you saw in the video earlier. Phase one is open, phase two is just starting to open and will open throughout into 26 but the [00:49:45] whole project's not going to be complete until 2028. So in terms of a a sort of, you know, full district contribution, it's really gonna be a few years away from where we are today. In terms of giving you a sense of its waiting size for Hong Kong land, you should probably think about it sort of similar to our Singapore office portfolio contribution. So, I mean, as we announced last year in our strategic direction, as we look to grow the business, We've got three prime portfolios that underpin Hong Kong land, Hong Kong Central, which were in the midst of the renovations and once that's done, there's gonna be over 20% rental growth in the retail alone. And then we'll have to see how the Hong Kong office market performs. Singapore, very strong and we've seen positive rental reversions. There's no new supply coming through. So I think the near term outlook for that portfolio is very robust. And then in Westbun, once we get through the next few years, [00:50:46] things obviously stabilize and then we'll have a more meaningful contribution. So the objective is to have sort of a balanced portfolio between these three cities and then hopefully more to come overall. But Westbud is in an investment phase, so it's gonna take a little bit of time before we have a meaningful profit contribution. What we will have in the interim is Sucho Central, which is early 27. That's being really well received by the market. I think we're 35% sort of let across the luxury brands have all been very bracing of that project. Mandarin Oriental as well right on the lake. The mixy central in Chongqing will open late 27 so there'll be some other events coming through that pipeline before 28 when Westbourne is fully online that will also generate additional earnings for the group. Because we said last year obviously we're trying to double our profit over 10 years but at the time we did say that about 30 to 40 percent of that double in or incremental profit is really coming from the existing portfolio. The openings Michael mentioned as well as growth in our existing portfolios. [00:51:47] And I think the final question, Carl, was around how it's a China ring assets. It was in cost. I mean, I think the ring Chongqing, which is, I think it's about four years now since we opened that. So that mall performance has stabilized that the yield in cost is in the sevens, just to give you a sense, which is why Michael was saying actually that asset in particular could be sold because you can clear well below that in the market today. The other malls will take a bit of time because they're just starting to open, but we're looking to get the yield up on those assets and then we plan to recycle the capital. There's another aspect just on those ring malls. I think Hong Kong land are not uniquely placed, but we're well placed to really understand the local market because they're not our sort of traditional luxury mall contracts. They are quite community and locally based and our teams that manage them really understand the local brands. I mean, they're not an LV or a Hermes type opportunity. So when we look at Westbourne with 600 shops, [00:52:47] we're gonna be able to tap into different parts of the whole China retail chain, not just focus on one end. And I think that really gives us a quite differentiated advantage. Because I think the China brands going forward is gonna become more important, and it's really important we get to know them now so that when they're at the levels to come to Westbourne and other places, we can invite them in. Please. This is Raymond from HSBC. Congratulations, they've seen a very good progress on the light of your transformation and the new strategies that last year. So I got two questions to go on. Only two. Only two. So let me say this time. So the first one actually about the new fund management business. As you mentioned, the CIO is already on board and new teams is largely in place. So actually, we should think about the second phase. So what should we expect to happen in the next 12 to 18 months for the team, for this new business? Should we expect any new investment or new big announcement to come in terms of the new [00:53:50] growth? So what is more about capital recycling, that's something we want to note. And actually the second thing is about the project you mentioned like the ring in Chongqing, like because if we look at your mini China portfolios, there are also a couple of projects which has been operating for quite some years, say for example the project Macau and also the WF Central in Beijing. How do we look at the yuan cause of return profile compared to the project you mentioned during in Chongqing? Do you use this management or is it that they have already or the very optimal level to monetize or there are a lot more potential so that we can wait for the leasing cycle before we monetize it at this stage. Thank you. I'll ask the last question first. So look, in terms of One for Jing Central, that's a core property for ours. It's a central series, as is Macau. [00:54:51] They both have different issues. The yields on cost there are not as high as we would like. The one in Beijing is probably subscale. We've got some luxury brands, but we don't have all of the luxury brands in that suite because it's just not sufficiently large enough. So we have been doing a lot of repositioning. It's much more of a watch and jewelry more than it was before. And the watch and jewelry market in Beijing is still incredibly strong. We've still got Dior and a few other fashion brands. But I think the intention there would be, how could we try to improve the scale of that property? In Macau, the market has been improved, particularly through this year with tourist travels. We sit right between the wind and the MGM, so we get a great flow. But we are also very subject to just the vagrancies of Macau. And there's not a lot we can do about visitor arrivals coming from the mainland up and down and how much is then spent on luxury. But again, we are opening a fourth floor. We've got a number of great F&B concepts. We connect straight into the Mandarin. We're trying to open up those connections also into MGM and just have a much better experience. [00:55:52] In terms of the luxury mall space in the peninsula, it really is the only one. So it's quite unique, but it still needs to probably for us to put more effort, more work to it to ensure that it integrates better with MGM. But just those two properties that you referenced are part of our prime properties portfolio. So they are mark to market every six months. So obviously this sort of yield and cap rate is subject to market conditions. Whereas the ring, we hold it as inventory for sale and it's held at development cost. It's not mark to market. So there's a difference between cap rates on prime properties and yield on cost on development cost just to give you a sense. And then I think you were asking about when's the next announcement coming. I mean I think as we sort of announced last year with our intention to recycle ten billion US dollars I mean that's not going to happen from just one single transaction so you know as a leadership team we've been focused on a number of things really since the beginning of our [00:56:53] strategy last year and as Michael says it's impossible for us to time them perfectly but actually I think it would be more helpful if we're able to sort of do things in a more regular basis. I think there the credibility would start to improve and maybe UBS will give us some credit for that if we do that. So I think watch the space that there's a few things that we're working on and then we can hopefully have some good announcements to come. I think I just also mentioned about the alignment of interest now. You know having the sort of group of insiders on the board and senior management with more than 1% of free float all very much focused on total shareholder return. That's a great alignment that you know some of our peers may not have that same alignment or we really do so making sure we deliver on those pretty bold statements which includes recycling is is absolute paramount. Mark. Thank you for taking my questions I got roughly three questions I think the first ones is regarding on the buyback pace. So I discovered that we recently have slowed down our buyback [00:57:58] amount. Just want to check with the management rationale about that and then secondly will be on the hurdle range for the new investment going forward with our targeted IRR for the new investment and then secondly I think we'd be more like on the Hong Kong listing side. So obviously we have a strong cooperation with HKEX and given that our name is Hong Kong Land, right? So I just wanted to check with management, is there any timeline for us to go back our home Hong Kong for listing? And then the last question will be on if we have seen any update on maybe MCL Land at the disposal or previously, Michael, you mentioned you want to do something in the Singapore office portfolio, what's the update, thank you. Do you want to do the buyback? I think the first point around the pace of the buyback, when we announced the 200 million US dollars, We obviously said that we intended to invest it by the end of this financial calendar year by December. So we still got some way to go. We've invested two thirds of it. I think the pace of it we can increase or decrease [00:58:59] depending on market environment. I think our price obviously had gone up a lot. And so, you know, dialing back the pace of it a little bit just to see what impact that had on the price and the price still went up. So I think, you know, the pace of it, we will just moderate overall, but you should expect it to be invested fully by the end of the year. Hong Kong, we love Hong Kong, Hong Kong land. This is our spiritual, our economic, this is home. And we do monitor the market. But from an institutional perspective, our institutional investors seem to be very happy to trade in Singapore or Hong Kong. I guess where we miss out here is maybe the stock connect and other things like that. So we monitor, we watch, we're going to see what happens maybe to the link and some of the REITs when the REIT connect happens. So there's, you know, we're not saying no to anything. We're not saying yes to anything. It needs to be a really strong proposition and case for us to do anything, but we'll continue to monitor and watch. [01:00:02] Yeah, obviously we don't disclose our hurdle rates generally, but I think maybe just the principles, just to give you a sense. So obviously this is something that we look at and we refresh on a sort of quarterly basis. So really looking at our cost of capital overall. And I think we have a model in place that really analyzes that. So when we look at new investment opportunities, we're comparing against that sort of level overall. I think that's why the sort of tomorrow's central investment that we announced last year is really attractive because the return on capital there is over 20%. So deals like that are things that are really accretive to us overall. So just to say, Mark, that it's something that we're very focused on and improving return on equity generally. [01:00:55] We'd love to be able to talk about specific transactions but it's difficult. And again, we can't synchronise timing perfectly. We continue to explore all of the opportunities that we mentioned. You know, we are very keen to recycle capital and the new opportunities. We've got a question online, maybe jump there from Joe Ho from Rondell Investments. What is your view on the mainland luxury market? I personally, and now Stuart there, hopefully a little bit less time, but I've spent a lot of time on our Westbourne project. A week a month I'm up there and I have been up there with many of our luxury brands. They like us see the future of retail experiential. It's not a conventional sort of mall. It's something like we're doing on Westbourne where you can walk from the train station to the end of the project. It will take you 25 minutes and you walk past 12 office buildings, 600 shops, two mandarins, a convention center, 1500 apartments, and you're living working, playing in a true ecosystem. So I think what we are trying to build is what many of the brands resonate with [01:01:58] in terms of the future of retail. So in terms of the view, I think we are in the right place because we're building the product that most sort of satisfies their future needs. But in terms of the broader market, yes, it is. Many of the brands are finding it tough. Many of them, from what we understand, probably overcommitted post-COVID. A lot of them went out and took extra locations. Those locations aren't working as well now. So there has been a little bit of a pullback. But for our projects, we're quite fortunate. We're not trying to be everywhere in China. We're in four cities in that sort of luxury central brand. Those four cities, we seem to be building exactly the right product, and therefore we're getting some quite good interest. But I don't think that's the case for all of our peers. Wonderful. Good. Thank you so much, everyone, for coming. Thank you. And spending your morning with us. And thank you. Thanks. Thanks, everyone. Thank you.