# Hongkong Land Holdings Limited — 2024 Results Presentation

Event: FY 2024 Full-Year Financial Results Webcast Presentation & Analyst Briefing
Date: 10 March 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/fullyear/2024/archived/
Official record: https://www.hkland.com/en/investor-relations/
Presenters: Michael Smith (Chief Executive), Craig Beattie (Chief Financial Officer)
Words: ~13,186

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.

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[00:00:00] Good morning, everyone. A very warm welcome to you all and thank you for joining us both in Hong Kong physically and online. I'm Michael Smith, the Chief Executive of Hong Kong Land and with me is Craig Beatty, our Chief Financial Officer. We've got a little bit to get through today, so I want to keep this as punchy as we can, but just give us some forbearance. As I near my one-year anniversary as Chief Executive, I've had the pleasure of engaging with many of you on various road shows and conferences. I'm incredibly humbled by the support and endorsement since the launch of our Strategic Vision 2035 in October last year, and would like to take a moment to thank all of you for your interest and feedback over the past four months. There are seven key areas that keep me busy and sometimes awake at night, and these include the first three, number one, two, three, is capital recycling. I know how important that is to everybody in this room, and it's incredibly important to me and my management team.

[00:01:00] Number four is to ensure that our two key flagship projects, Tomorrow Central and Westbourne Central, become world-class examples that underpin our vision to become the leader in Asia's gateway cities focused on ultra-premium integrated commercial properties. The next thing is to strengthen our leadership bench by bringing in key new management. Next is to implement a performance-based culture, a long-term incentive plan to align senior management interests with shareholders on total shareholder return, as well as a revamp of bonuses and incentives for all employees. And last but not least is to continue to deliver and where possible exceed expectations that the market has placed on us, evidenced by our 5% increase in four-year dividends. We will continue to engage with investors to ensure we are clear and transparent in terms

[00:02:01] of how we're progressing towards our targets. Now let me talk you through some of the details of what I just outlined, as well as go through our key financial results for 2024. 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 the website and we'll include them in the Q&A session. So here's the structure of today's presentation. Without any further ado, let's get started. Delivering on our strategy. As many of you in the room will remember, back in October 29 of last year, we set out a new strategy grounded in Hong Kong lands, now 136 years heritage. Importantly, we also set out an ambitious, bold set of 10-year financial targets. Our vision is to become the leader in Asia's gateway cities, focus on ultra-premium integrated commercial properties. And we'll do that by delivering growth,

[00:03:03] by allocating our capital in the segment that we know best. Actively recycling capital to invest in future growth and pivoting our business away from the build to sell segment. Investing in and executing to the very highest standards, portfolio of flagship anchors in central Hong Kong, marina Bay Singapore and West Bund in Shanghai. Underpinning these strategic priorities are the 10-year financial targets that you see here. Doubling a recurring underlying pivot, doubling a dividend per share with a name for mid to single digit annual growth in DPS so this year's five to six percent is within that target. Growing our AUM to $100 billion with meaningful participation from like-minded third-party capital, and recycling up to $10 billion of our balance sheet with a name of $4 to $6 billion by the end of 2027. That execution is founded on the approach, the execution of this strategy is founded

[00:04:05] on the approach that we lay out here, which shows how we are reorientating the business to deliver that strategic vision. Firstly, we'll strategically focus on investing, again, I'm going to keep repeating this, ultra-premium gateway assets in existing key markets, whilst also looking for new opportunities in other regional gateway cities. Secondly, we'll bring in new capital from like-minded partners to invest alongside us, delivering an improved return on capital. Thirdly, we'll recycle up to $110 billion of capital to fund this growth. We have stopped investing in our build to sell business and are proactively working on accelerating the recycling of capital. Fourthly, we are evolving our capital allocation framework with more discipline and an absolute focus on creating shareholder value. In the last four months since we were last together, we've made a good headway on the execution of this strategy. On portfolio recycling, we've recycled about US$300 million of assets over the last 12

[00:05:09] months. We have included completions of our China build to sell portfolios and the sale of a retail asset in Thailand, a non-core retail asset which we divested. We are continuing to pursue options to accelerate our monetization efforts and look forward to making announcements of that effect over months and years to come. On capital management, consolidated net debt is down 5% year on year. So effectively, we've reduced our balance sheet gearing by about US$300 million, which is similar to the amount of capital recycling that we've endeavoured on. That US$300 million will be used to fund a share buyback, as we've said, but it's also going to be used to ensure that we can grow our dividends. So I'm pleased to say that we've increased the 2024 final dividend by 6% year on year after the last five or six years of our dividend being flat, demonstrating our commitment to a more progressive dividend policy. In line with the strategic announcement previously, we remain committed to allocating up to 20%

[00:06:10] of net proceeds from capital recycled into future buybacks. And as I mentioned, we're very keen to come back to you with announcements of that effect and then the launch of a buyback. On third-party capital capabilities, we are pleased to have onboarded Michelle Ling as our new Chief Investment Officer sitting here a couple of months ago at the beginning of this year. So she has taken the lead on a whole host of ongoing initiatives, including portfolio recycling. She is also building out our capabilities to partner with capital providers. We've continued to strengthen our portfolio anchor markets with the development of Westbourne Central and tomorrow Central very well on track. We'll provide more updates later. And finally, we spoke at length last October about improving our corporate governance and aligning incentives with shareholders. So with the first ever LTIP at Hong Kong Land has been approved by our Enumerations Committee and became effective on the 1st of January this year as we announced last year. So that is now in place and in the 135 years we've

[00:07:14] never had an LTIP type arrangement where the senior management are very much aligned with TSR and shareholder returns. I'm pleased that the group's leadership position and sustainability has been recognised by the S&P Corporate Sustainability Assessment with Hong Kong Land for the first time becoming a member of the Dow Jones Sustainability World Index. Proactive recycling capital, as I mentioned, is the first three priorities of mine is fundamental to the execution of our strategic vision. We have made incremental progress towards our target of $4 to $6 billion by 2027. In 2024, we recycled over US$300 million, predominantly from the wind down of our bill to sell inventory in China. What we would have previously done is reinvested that capital into land. The decision not to do that enabled us to de-gear and help fund the dividend growth. Although market conditions remain challenging, sales performance diverged between different sub-markets.

[00:08:15] The group's products are mostly in well-located areas and are targeted at upgraders, resulting in reasonable sales volume relative to the market headwinds. In line with our strategic vision, we did not make any new investments in the build to sell segment. 80% or more of the recycled capital be used to reduce net debt and build investment capacity with the remaining up to 20% of proceeds allocated to future share buybacks and dividend growth. At our core, we are a people business. Hong Kong land, I believe, has some of the best talent in Asia. One of my priorities since joining just under a year ago has been on reinvigorating our culture, as well as strengthening our leadership bench. We've done that through redefining and communicating to all our people Hong Kong lands new strategic vision, mission and values, ensuring alignment with our strategic goals and helping to build a more unified corporate culture. The photos there are the town halls that we went on

[00:09:17] around October 29, the first week of November, when we went across and met with all of our team and explain exactly what we hope for the future. Conducting thorough independent evaluations to benchmark key organizational functions in our business. So external consultants have come in and looked at our development capability objectively and given us comments, are there any gaps? Have looked at our property management team, something I don't think the firm has done, but by me coming in externally and appointing external consultants to really assess, are we best in class? Because if we're not best in class and there are gaps, we have to fix them. Investing in human capital by developing existing employees and recruiting exceptional new leaders. On our leadership team, I'm pleased to have brought on board three very experienced executives to bolster our capabilities in key areas. Michelle Ling, as mentioned earlier, is Chief Investment Officer. I think it's 25 years that Michelle and I have worked together, which is a bit extraordinary. Michelle's focus will be on formulating and implementing investment and capital management strategies

[00:10:19] while also facilitating the group's growth through strategic transactions. Jackie Tan is our Chief Corporate Officer. In this newly created role, Jackie will focus on organizational transformation priorities, as well as overseeing the company's technology, communications, and sustainability functions. And finally, as mentioned last week, as announced last week, Stuart Grant will step down from the board, he's been on the board of Hong Kong Land for the last 12, 18 months, he'll be stepping down from the board to take on the role of chief executive of Westbourne Central, having overall accountability for the development, leasing, and operation of Hong Kong Land's most important ongoing project. Seward 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 and head of asset management at Blackstone for many years. He's been living in London for the last five years in a joint venture with Bookfield. He's leaving London with his two kids to relocate to Shanghai, because of the importance of this project. She would have vast experience on how to build

[00:11:21] unique ecosystems and understands the importance of partnerships, which are key elements that strongly align with our vision for Westbun Central. As I said earlier, the core of our 2035 vision is a focus on total shareholder return. To sharpen all our focus on TSR, we are putting in place a remuneration framework that aligns our people's interests with those of our shareholders. For the first time in our history, senior management and key individuals in the business will be incentivized by a meaningful LTIP based on two core KPIs. 85% of the LTIP will be driven by a TSR metric with half being performance against absolute cost of equity targets and the remaining half being against the set of set of peers. So we've selected 20 companies at our peer group. The remaining 15% weighting involves sustainability KPIs focused on decarbonizing scope one and two emissions.

[00:12:23] It's a very, very big change for Hong Kong land. It's a significant part of my compensation going forward. The LTIP has tiered achievement factors with a management bench sharing in both the upsides and the downsides. It's very possible that if we don't perform, we won't get an LTIP any type of enumeration to it. So it's really based on ensuring that we drive the share price both on an absolute and a relative basis. We're also relaunching a revitalized STIP for all employees. This cash-based scheme is linked directly to KPIs aligned with our new strategy, including 50% financial and 50% non-financial KPIs. This will effectively shift the group's STIP practices from discretionary bonuses to a structured targeted bonus regime. So effectively, I have a set of KPIs, or the firm has a set of KPIs, which will be filtered down to everybody across the firm so everybody is on the same objective to ensure that we meet our KPIs. In addition, in 2024, we rolled out a minimum shareholding policy

[00:13:24] for executive directors. This policy requires minimum shareholding at multiples of annual basic share salary, depending on function, further aligning the management team's interests and shareholders. So for the tenor of our careers, we will have a minimum amount of shares that we must hold as further alignment of our interests with our shareholders. When we set our strategic vision, we went through what makes Hong Kong land unique, what sets us apart from our competitors, what distinguishes and differentiates us. And at the core, it's our idea that experience is central. This idea underpins how we design, develop, and deliver our properties, as well as how we partner with our tenants in managing our properties. I wanted to show you just four highlights of the creativity, innovation, and place-making that we delivered on in 2024, and which we plan to continue to deliver on in years to come. Firstly, for those of you who have been to Singapore recently,

[00:14:25] one raffle's key, significant enhancement that we embarked on creating new spaces and experiences in the lobby to elevate the property and enhance its appeal. Revitalizing centricity, we have refreshed our centricity tenant app to deliver best-in-class tenant services and improve overall satisfaction for the 12 office buildings in the central estate. The opening of the Sotheby's Maison, I'm sure all of you have seen that over recent months, we've partnered with Sotheby's to open their new Maison in Shatterhouse, creating a truly unique place, not only in the landmark but globally. Sotheby's has not undertaken anything like this and having a real sort of public face anywhere else in the world. The Orbit Westbond, a world class exhibition hall which we open, has already become a sought after venue for luxury brand events in Shanghai. Pretty much every weekend there is another event at that property. Tomorrow Central is a bold undertaking and

[00:15:26] something that I firmly believe only an organization like Hong Kong Land can successfully deliver. We are proud to be partnering with some of the world's best luxury brands to completely refresh large parts of the offering of the iconic landmark. Not only is this a testament to the belief that these brands have in Hong Kong land, but also in the future of Central and Hong Kong. Most importantly, the renovation program is well on track. Any of you walking around today will see the signs of this taking place, taking shape. In terms of phasing, we expect two openings later this year 2025, three more openings in 2026, two in 27 and then the full completion with the opening of Hermes and Chanel in 2028. These openings are deliberately phased so that the portfolio remains active throughout the transformation and each brand is able to create its own unique moment and it's going to be very exciting to attend all of the openings with these masons because some of them

[00:16:26] are going to be incredibly spectacular. Not all of them will be incredibly spectacular. Now some of the highlights. We continue to strengthen our anchor flagship portfolios in Hong Kong and Singapore. The group's Hong Kong office portfolio continues to outperform versus the market, benefiting from a flight to quality, despite well-documented market headwinds. As mentioned earlier, we have revitalised our best-in-class entry city app and continue to refresh the services we deliver to our tenants. On Hong Kong retail, tomorrow's central transformation, as I mentioned, is well underway and working very closely with our luxury brand partners on bringing to market world-class mazons. In the meantime, Landmark remains active and achieve positive rental reversions in 2024. Our Singapore office portfolio, the diversification that we benefit from, continues to perform well. All major anchor tenants were retained during the year with positive rental reversions.

[00:17:28] segments continue on accelerating capital recycling with contributions from both the build to sell segments in China and Singapore increasing compared to the prior year. Provisions against China build to sell inventory which were largely recognised at the half year were done to align prices to market to improve turnover. So we're very much focused on ensuring that we can repatriate their capital and reinvest and close the gap that's prevalent in our share price. In China we're making good progress on realising our vision for Westbourne Central. The first phase of the project was completed during 2024. The luxury apartments for sale outperformed all expectations with all 80 units sold and now handed over at a price of 178,000 RMB per square metre, amongst the highest average prices for residential product in the city. Separately, the initial phase also saw the completion of over 180 units of the group's proprietary branded service departments, Westbourne Central Residences, and 10,000 square metres

[00:18:34] of retail. Both achieved high occupancy. The next phase of the project is expected to complete later this year. We've already secured commitments from a strong mix of domestic and international tenants. And as Craig will take you through, there's over 80,000 square metres of office in the next phase, all of that office space is committed. So going into the marketplace with a lot of headwinds in the Shanghai office market, I think is testament to the quality and the vision that we're building. Despite uncertain market conditions in 2024, recurring rental income was resilient. Growth in Singapore and the Chinese mainland partially offset lower contributions from Hong Kong. Future rental income growth is underpinned by our commercial pipeline as well as reinvestment and revitalization of our existing flagship assets. The group continues to maintain a strong balance sheet and net gearing position. Our average borrowing costs actually fell to 3.6% from 3.9% previously with diversified debt facilities in

[00:19:35] place. The final dividend declared is 17 cents which is up 6% from the prior year. On sustainability I'm pleased to see the group's efforts to become a market leader and fully embed sustainability considerations across its operations are being recognized by leading rating agencies. Turning to an overview of the results, all of these monetary units were in US dollars. The group's underlying profit, including China non-cash provisions, remained resilient at $724 million, down 12% from the prior year, primarily due to lower contributions from the Hong Kong Central Portfolio, particularly as it relates to the landmark refurbishment. Net debt declined by 5% to $5.1 billion as the group made no new investments during the year. The net asset value per share stood at $13.57, down 6% compared to the end of 23, mainly due to the revaluation losses in the Hong Kong office portfolio.

[00:20:39] And that really is due to market rent assessment by our independent valuer. The board has declared a final dividend of 17 cents, bringing the four-year dividend per share to 23 cents per share, up from 22 cents years previously. And finally, I'd like to take a moment to highlight the resilience of the group's recurring rental income portfolio. I think a really important piece of Hong Kong land is the resilience by continuing to focus on being the best in what we do by focusing on the relationships that we have with the 2,500 occupiers across our portfolio, despite the volatile and in some markets difficult trading conditions over several years, we've still created an incredible amount of resilience. So rental income from the Hong Kong Central portfolio declined due to market uncertainties and temporary tenant movements at Landmark, but that was partly offset by growth in Singapore and the completion and growth in our Chinese mainland properties. I'd now like to hand to Craig to talk you through our leasing update.

[00:21:39] Thanks Michael and good morning everyone. So let's take a closer look at our leasing performance for the year. So let's start with Hong Kong office. So obviously we generally know that the office market was pretty challenging overall, but for us our portfolio produced I think a pretty stable performance and we continue to outperform the broader market due to our prime CBD location and also our premium offering. in mind that Grade A office vacancy in Central stood at 11.6% last year. Our vacancy of 7.1% has comfortably outperformed the market. Our overall weighted average lease expiry stood at 3.7 years, whilst the weighted average lease expiry for our top 30 tenants, which occupy close to half of our total office space, was actually 5.1 years, so higher than the the average overall. Eight of our top ten tenants have been with Hong Kong land for over ten years and six of these have been with us for over 20 years which really I

[00:22:43] think gives some insight to our sort of client management and how we like to work with our tenants for the long term. At the end of last year 13% of our Hong Kong office portfolio was due to expire this year and at the end of February that 13% has fallen to 6% so from a risk management point of view we're already quite well covered this year in terms of upcoming expiries. If I look at the Hong Kong office market overall we're seeing a sustained flight to quality trend with recovering capital market activity which is often a leading indicator for demand in core central. Our central office portfolio is closely linked to capital markets as many tenants are lawyers, asset managers and consultants, plus banks and IPO activity is expected to improve this year which is a key driver of interest in our office spaces. Despite a subdued market, average rents at our central portfolio continue to significantly outperform the

[00:23:46] market due to our unique ecosystem as well as the scarcity of high-quality well-managed space in central. And we are well placed to take advantage when the market turns and demand improves. Let's jump now to the retail portfolio in Hong Kong which of course is luxury focused. Average retail rents increased by 3% in the year to 210 Hong Kong dollars per square foot, a second consecutive year of growth. This was driven by positive base rent reversions reflecting the strength of the landmark brand despite challenges in the broader luxury retail market. Occupancy was 97% down slightly due to the tomorrow's central upgrade works. Our weighted average lease expiry at the end of December was 1.8 years and we expect this number to increase as the new long-term leases start to commence in the luxury Maison stores that we've previously announced. Tenant sales were down 8% compared to 2023 but bear in mind

[00:24:50] 2023 was a record year for Hong Kong land and tenant sales last year in 2024 were on a par with those of 2018, our second best year ever. Luxury retail dynamics in Hong Kong are changing and we think Hong Kong land is really well placed to be a beneficiary of those changes, a lot of what of which we're driving ourselves through our portfolio reimagination. And the simple fact is that luxury retail will now be driven more by Hong Kong residents than spending by tourists and just to remind you 85% of landmark sales come from Hong Kong residents with 15% coming from tourists. So the stats on this slide show Landmark continues to benefit from these trends. Our bespoke loyalty program continues to define the ultra high net worth market. Bespoke VIC sales were up 1% year-on-year, demonstrating the quality and resilience of Landmark's VICs and these VICs account for 80%

[00:25:55] of total sales and our bespoke program. Last year the top 100 local spenders and Landmark in aggregate spent 1 billion Hong Kong dollars and amongst these top 100 customers we saw mid single-digit sales growth which I think is remarkable given the overall market environment. Landmark continues to be the best place I think for high net worth individuals to shop and also the transactions that we've seen continue to grow, not just with the top customers, but generally across the board. And the top 10 transactions, uh, totaled over 200 million Hong Kong dollars last year, which was also up 1% year in year. And generally we've seen 6% growth in high value transactions on our individual customer basis. So pretty strong stats for 2024 overall. Let's jump to Singapore office now where our portfolio continued to perform really well driven by a flight to quality and limited

[00:26:59] new supply despite a moderation of demand in the market there generally. Average rents continued to show growth and were up 2% compared to 2023 and positive rental reversions were achieved during the year and the portfolio was effectively fully let. Tenant retention, same as Hong Kong, remains a key strategic priority for us. And our top 10 tenants have, on average, been with the Hong Kong land portfolio for 13 years and with one of them being there for 25 years. These top 10 tenants have an average weighted average lease expiry of 4.2 years and represent 43% of the overall portfolio. Over the next few years we expect limited new supply in Singapore CBD. The government's been moderating supply as we all know and I think this scarcity has led to higher absorption rates. Many of that available space is being occupied quite quickly by prospective tenants.

[00:28:00] As a result we've seen vacancies across the market decrease and we expect to see a continuation of the strong demand of the office space in the CBD which should be reflected in growing yields and ongoing resilience of our portfolio. Let's move to Shanghai now and the Westbun Central Project. As Michael mentioned, a couple of milestones achieved in 2024. The residential for sale component was completed last year and was a resounding success. All 80 units were sold out on the day of launch and as Michael mentioned, they were sold at some of the highest prices in the city overall, which I think demonstrates the high quality and the strong brand recognition of Hong Kong land. The first batch of our adjacent proprietary branded service apartments called Westbond Central Residences were also well received and they're currently over 90% occupied and we will launch a further 800 units in phases under the same Westbond

[00:29:03] Central Residences brand later this year. The retail offering in the first initial phase which is smaller in scale and more F&B orientated is over 80% occupied and then phase two of the project is due to open this year which as Michael mentioned has a larger office component to it there are four towers here representing 78,000 square meters of office space and all of these are now effectively committed which again I think talks to the quality of Hong Kong land and the project because the Shanghai office market is quite challenging at the moment. And as Michael mentioned earlier, we've continued to grow from strength to strength in our sustainability commitments across ratings, decarbonisation, circularity and tenant partnerships. Let's look at the financial results in a little bit more detail. All the numbers in the next few slides are in US dollars, unless otherwise indicated. The group delivered a

[00:30:06] resilient core trading performance during the year despite the uncertain macroeconomic backdrop. Contributions from Prime Property's investment portfolio decreased by 54 million year-on-year and positive rent reversions in Singapore office and improved contributions from WF Central Shopping Mall in Beijing partially offset the decline from our Hong Kong Central portfolio. Operating profits from our build to sell segment, including the inventory provisions, increased by 106 million year on year, primarily due to more planned sales completions on the Chinese mainland as we accelerate our capital recycling efforts in this segment. Last year we had some really strong projects in China that completed, including the Westbun apartments that I mentioned earlier. Despite the broader challenges, I think some of the quality or product that Hong Kong Land has as is reflected in the numbers last year. We did, as we've noted earlier,

[00:31:08] taken a non-cash inventory provision last year, amounting to 314 million, which was recorded on selected projects and phases of projects with slow moving inventory, mostly in non-prime locations. Returning to rental income, which decreased by 2% compared to 2023, and going through each of the segments in turn, Rental income from Hong Kong office declined by 5% due to negative rental reversions, although as we mentioned the portfolio remained resilient overall and continued to outperform benchmarks in the city. On retail, Hong Kong rental income declined by 9% due to planned tenant movements as part of the tomorrow's central transformation, but underlying rental reversions were positive, resulting in a higher average retail rent per square foot last year. There was strong growth in our Singapore office portfolio as I mentioned driven by

[00:32:09] positive rental reversions and contributions from our China retail portfolio increased 11% primarily led by higher contributions by our shopping mall in Beijing following tenant mix changes. Performance from other segments which include hospitality operations were stable. Turning to the operating profit of the groups built to sell by region, and please note this slide includes our share of the groups, joint ventures and associates. Profits from the Chinese mainland, excluding the inventory provisions, increased by 46% year over year as more projects were completed and handed over to buyers and these are the high quality projects that I referenced earlier. Profits in Singapore and MCL land are recognized on a percentage of construction completion basis and profits in the year here were also higher as construction progressed on the group's remaining projects. Contributions in Indonesia

[00:33:11] declined due to less planned sales completions and on the inventory provisions these were predominantly in Chongqing, Wuhan and Nanjing as I said were on selected projects with slow moving inventory in non-prime locations. Net asset value at 31st December 2024 was $29.9 billion, down 6% compared to the end of 2023. This decrease was primarily from lower valuations for Hong Kong office assets due to the decline in open market rents. But this was partially offset by higher capital value for the landmark retail complex due to the higher expected rents post the completion of tomorrow's central. Positive contributions from our resilient underlying earnings per share were partly offset by inventory provisions in China. And there was an accounting reclassification of properties held for self-use in our Hong

[00:34:12] Kong central portfolio moving from investment properties to fixed assets. Net exchange translation differences or FX movements of $163 million, mainly related to assets on the Chinese mainland and in Singapore, as both those currencies had a lower value during the year due to the strengthening of the US dollar. Overall, net asset value per share was $13.57 at the end of 2024. Let's jump to dividends and as Michael said, we declared a final dividend of $0.17 up 6% from the final dividend in the prior year, bringing the full dividend to $0.23. The growth in dividends is in line with our intention to deliver on average annual mid-single digit growth in DPS, as we announced last year as part of our strategy refresh. Despite a decline in underlining earnings this year, if you exclude the China inventory

[00:35:14] provisions which are non-cash in nature, our payout ratio was 70% within our intention to pay out 60 to 80% of recurring income over time. The maturity profile of the group's debt is shown on the left-hand side of the slide, and the debt maturity as you can see are staggered over a number of years and are well-diversified between both banks and debt capital markets. We recently secured a $12 billion Hong Kong dollar revolving bank facility supported by our 12 relationship banks at Good Pricing and thank you to some of our banking colleagues who are here today. And the purpose of this facility was to refinance existing expiring facilities and this new facility are also green in nature so again further adds to our sustainability ambitions. The group remains in a very strong position with respect to further refinancing plans.

[00:36:15] We have won a US$600 million bond due to mature in the second half of this year, but we have ample liquidity and therefore we're in a strong position to decide when to tap those markets. And of course, we're also focused on capital recycling and therefore we do expect our net debt levels to trend down over time. The average tenor of her drawn debt at the end of December was very healthy at 6.3 years and the average interest cost decreased to 3.6% down from 3.9% in the prior year driven by lower average interest costs in renminbi and the impact of higher for longer interest rates on the group is mitigated by having 68% of her average gross debt held at fixed rates. By the end of December, the group had available liquidity of 3 billion, quite a significant amount, and our credit ratings by both S&P and Moody's remain unchanged at A and A3 respectively.

[00:37:20] So I'll now pass back to Michael, who will take us through the outlook for the year. Thanks again, Craig. So just to wrap things up, looking towards the remainder of 2025. Of Hong Kong office, our view is that rental reversions will remain negative, although we are seeing some green shoots in terms of inquiry levels, with demand largely driven by the asset management sector. And as Craig mentioned, I think increased capital markets activity in Hong Kong will definitely be a positive for Hong Kong man. We expect the flight to quality trend to continue, as tenants continue to prioritise quality of space over size of space, whether it's amenities and services, the ecosystem we've created or ESG performance. With limited future supply in core central, there is potential upside dependent on the recovery of the capital markets activity in the city. For the landmark, trading in 2025 will be impacted by ongoing renovation as some leasable floor area will be temporarily out of action. The priority will be to ensure that Landmark continues

[00:38:25] to have the right mix of offerings to serve customers and office tenants during this period as we work to deliver on our vision for tomorrow central. In terms of the luxury retail market, we believe ultra-high net worth consumption will remain resilient. In Singapore, we expect both performance of the portfolio and economic outlook to remain stable. With a tightly supplied market, particularly in the Marina Bay District, our portfolio should continue to enjoy very low vacancies. For China, we are cautious on the short-term trading outlook as we actively monetise assets from the build-to-sell segment. Whilst markets remain challenging, especially for office assets, as we mentioned, the leasing momentum that we have managed to generate for nearly 80,000 square metres of space in Westbourne Central has been steady, and the next phase of the project is on track to open in the second half of this year. Circling back to our strategy and priorities for the remainder of the

[00:39:26] year, on portfolio cycling, as I mentioned at the beginning, it's the first, second and third most important thing that we are all focused on, is to accelerate asset disposal or recycling initiatives where viable. We have not been sitting still and have been pursuing a number of opportunities across the markets in which we operate, although some of them will take longer than the four months since the strategy was first launched. But we do look forward to sharing more good news and good announcements over the shorter medium term. For capital management, we intend to maintain a strong balance sheet whilst keeping an eye out for strategic investment opportunities. But really the first part of our strategy is recycling capital. That's really the most important thing we're focused on rather than reinvesting those proceeds. So to Craig's point about de-gearing our balance sheet, making sure that we have dry powder to be there when opportunities present themselves, but really the recycling is the first part of the equation. In terms of third-party capital, we have and will round out our capabilities.

[00:40:29] Our goal is to partner with like-minded capital that also believes in the ultra-premium segment and the strong, high-quality of recurring cash flows it brings. So we're not out to just grow AUM for the sake of growing AUM. going to look for the LP capital, for the third party capital that really appreciates the uniqueness of what we have the skill base to do and want to come alongside us. And finally, both our Tomorrow Central and Westbourne Central flagship projects have seen strong starts, but there's still a lot more to come and we look forward to sharing with you more exciting announcements that are coming up. Again, I'd like to thank you all for your support. We want to make sure that we're very clear and transparent with everything we do, and we're happy to take any questions. Thank you. Raymond? Should we stand? Okay, I've been sitting too long.

[00:41:29] Thank you. This is Raymond from HSBC. Thanks for sharing a lot more detail about your transformations, as well as incentive schemes here to enhance the shareholders return. Maybe I have three quick questions. The first question also aligns with the shareholders return. The first thing we already see that is increase in DPS. But also there's another question there that you mentioned earlier about the shareholders returned, which is about the buyback program. Because you mentioned that in the three years time, there we added disposal of around US 4 to 6 balance. So what should Infast anticipate in terms of the timing for the buyback program? What's the amount of the buyback debt which should be anticipating in the next 6 to 12 months? Can you provide some color here? This is the first question. And the second question is actually about the Westman project. So is this amazing debt? But should we answer that one first? Otherwise, we'll forget it.

[00:42:29] So what are you and then I'll jump in. Yeah, I think you've heard the stats properly, $4 to $6 billion by the end of 2027. I mean, I think as we said at the announcement of our strategy refresh last year, we've been working on capital recycling, even before we announced that we were planning to do that. I mean, these things take a bit of time. We continue to wind down our bill to sell business. And as we said, $300 million US dollars net cash came back to the group. And just to be clear what that is, that's effectively a sale proceeds, less cost of sales, less than any joint venture or bank funding, less tax we pay. So the 300 million really is net, net cash that we have at the group and that's why our net debt fell at the end of last year. I think in terms of targets for the year, we're quite mindful not to be sort of giving out sort of big statements about this, but I think, you know, as Michael said, it's one, two, three top priority for the group.

[00:43:31] We are working on a number of things And we are hopeful that we can make some positive announcements about this to the market soon. I think just to come back on the buyback piece there, there's no change in our guidance that we gave at the end of last year, which is that up to 20% of any capital recycling will be allocated to buybacks subject to market conditions and share price. And I think that continues to hold. We still believe that at our price today that this is still an attractive investment option for us as a leadership team and the board support that too. So I think in terms of the pace of the buyback, really you'll need to see us accelerate our capital recycling and then the buyback will flow through in bigger numbers thereafter. Just to supplement, the old tip is quite a game changer for us as well. We all are very motivated to grow the share price. We've committed to finance through sort of guidelines, So we're not going to, we're always going to be investment grade, that's our focus.

[00:44:32] We're not going to do a big equity raising. But closing that gap of 1357 to where we're currently trading, buybacks are obviously a very neat way of doing that. So we're very focused on ensuring that we, like you, want to grow the share price, get rewarded for that, and the buyback is a great mechanism to achieve that. So it's very much top of mind. But as Craig said, we don't want to give you, I think we were quite bold in saying $4 to $6 billion by 2027. I mean that in itself is something unusual for the Hong Kong markets So saying that is sort of the commitment that we're holding to but giving anything more granular than that We just sort of risk as these transactions move and evolve it. We don't want to commit to a smaller time frame Okay, where's one for sure? So the act the second question about the Westbend because like the management has a point I do see on this single particular product is quite like quite nude maybe for my mind as well. So the question is, is there any bigger blueprint or thinking on this appointment? And how should you think of the Hong Kong land,

[00:45:32] mainland China business as they're going to have new entities here, how they're going to make a bigger roadmap for growing this fund management business over there? So this is the second question. And last question is just very simple, it's about Hong Kong luxury retail. So as many people have been quite cautious about the Hong Kong luxury retail. You have been doing very great job in terms of delivering really salient retail spending here. Can you share with us, like year to date, how, is there any changes in terms of momentum for high-end retail sales in Hong Kong? That's the last question. Thank you. Why don't I touch on Stuart Grant's appointment. We've been searching for a leader of that project for quite a while because it's just so important. We paid $4.3 billion for that land in 2020. We've committed to an $8 or $9 billion capex program with our partners. I mean, it is not just the Hong Kong land, but the broader Jardines group is significant project. So it deserves the attention of somebody like Stuart.

[00:46:32] And the fact that he was at Blackstone as a partner for 20 years and he's managed such a massive portfolio across Asia. The fact that he's been with a Brookfield partnership for the last five years, which has done very, very well and he's willing to sort of leave London and relocate to Shanghai is real testament to the seriousness that we place on that project, and also the seriousness that he does. He's moving his two young children from London to Shanghai, et cetera. So in terms of the dynamics of the group, I think that's all it is. It's really a reflection of what we're doing here in Tomorrow Central is sort of under our noses, like we all in Exchange Square and we can see it. But in Shanghai, it's a little bit more distant. I'm spending one week a month in Shanghai. Craig's up there a lot more, the whole senior management team. So it's not as though the rest of our projects are any less important, that everything's important, But that is really a true flagship which underpins who we want to be in the future. And we just have to get it right. Maybe just to add a little bit about Stuart as well because it's a huge project, 18 million square feet. I think it's probably the largest in Asia Pacific, actually probably globally outside Middle East.

[00:47:34] But I think the appointment of a chief executive is it's not just to get it built, it's to get it built of course. It's also to get it leased but most importantly it's to make sure that the whole ecosystem works effectively because that's what Hong Kong man is known for. So the reason why we're really excited about Stuart is not just his asset management capabilities but if you know him as an individual he's hugely passionate about place making, marketing, branding. So I think it's the whole it's the whole piece that we really want to try and elevate West Bond overall. And then maybe just rounding out on the retail side of things I think year to date the broader market continues to be quite challenging. I think our sales in Landmark in the first couple of months of the year are down about 10% or 11% on the prior period. So a sort of broadly sort of similar run rate that we saw last year continuing. But again, the underlying strength of our VIC continues to be quite phenomenal.

[00:48:34] I mean, we had an individual customer a couple of weeks ago who's spent over $100 million on a few items. So I think that's really our strategy. It's to have best in class, not just in Hong Kong, but globally, but to really appeal to the very, very top end of the market overall. And I think the brands acknowledge that. They wouldn't be spending their capital on the fit out, which is quite significant in some cases, unless they truly believe that Landmark is the center of ultra high net worth. So it creates that whole ecosystem. So we have to make sure that the $100 million plus shoppers come to Hong Kong, not Japan, and then come to Landmark and nowhere else. Carl? Hi, I'm Carl Choi from Bank of America. A couple questions. First, you wanna go back to the LT program for a second. Can you give us some sense about the scale, how many shares, how many maximum can be issued, the scope, how many management members are actually covered, and you mentioned 20 companies in the peer group,

[00:49:36] who are they, or the geographic locations, is this just a Hong Kong mainland, or more APAC in general? And second question is, going back to capital recycling, again, you mentioned you will pursue a pragmatic approach. I think the questions that investors have kept coming, sort of been asking about is in a high for longer interest rate environment, how do you find the balance between raising liquidity, selling to raise, having a large disposal relatively shortly, but probably we have to add a discount to book value, and what kind of discount is acceptable. Just want to get your thoughts on that. And I guess I just need to get a third question. Any update on the platform business in terms of starting our conversation with potential third party capital? Okay, maybe I'll start on the old tip. We're not, all I can say is that it's very rare in Hong Kong, very rare in Asia, I think, particularly with the private sort of companies. So we're not, I don't think we are disclosing the amounts but I can tell you that it's a significant part

[00:50:37] our total compensation. There was some detail in the slide, you know, it's over a three to five year vesting, it involves all of the executive directors and the key sort of leaders of our business across the region, people who want, we want to make sure are the future leaders of our business. It's very much tied, as you know, 85% to both absolute and relative TSR. So I think being sort of a bank of many years, it's got a lot of elements which should really align our focus and the shareholder return. But in terms of the actual elements, I don't think we are, there's no sort of disclosure around that requirement. Yeah, but I think the point that was made earlier around it being tied to performance is obviously, we're completely aligned, so if we don't perform, we don't get paid. And I think in terms of meaningful contribution or percentage of our total compensation is quite significant. So it's not just a token L tip in terms of a small percentage.

[00:51:39] Just on your third point, so in terms of the platform, Michelle's been on board now for three, two and a bit months. Building out that team, building out the capability, going to Perry conferences, doing sorts of things that we hadn't done before to try and reacquaint ourselves with a lot of the LPs. It's a very discerning LP or partner that we want. It's not sort of the 20% type return type, opportunistic type LPs. looking for quite a nuanced group of capital that really understands what we're doing. But the focus is now recycling. So to your second point, recycle, recycle, recycle is really where the focus is and then laying all the infrastructure in the groundwork that when opportunities present themselves that we have the right group of LPs to come alongside us. On the recycling front, it's I think the discount point, you know, we get our assets independently valued every six months. So Jones Lane has been valuing our investment properties for many, many years. In my mind, that's the sell price. We go out into the world every six months with our NAVs.

[00:52:40] We shouldn't be discounting beyond that. So when we've got our build to sell product in, we've marked, we've taken provisions on some of our properties to make sure that we can clear. All of the rest of our build to sell product has healthy margins in place. So there's no need to discount below a cost basis. Some of our commercial assets in China, particularly in some of the more secondary cities, the office markets in particular, that may be an asset class that if we really wanna recycle capital, there may be a necessity for discount. But we've got a lot of other different parts of our business that we can look at as well in different ways and lots of smart people around the table to think about, ensuring that we don't have to discount our assets. That's not, we're not a sort of on fire. We're de-gearing, we can keep de-gearing our balance sheet, keep saving 3.6% interest every time we de-gear. So it's not an absolute, you know, we have to sell for the sake of selling. It's got to be part of the whole strategy. And, you know, selling at NAV and buying back at the significant discount that we currently trade at is a very good use of our capital.

[00:53:49] Hi, Michael Craig, this is Cindy from Citi. So three questions from me. First, maybe I'll just to Michael. So obviously, 2024 was a significant year with a lot of changes. And you mentioned your continued priority on capital recycling in 2025. So I'm just wondering what are the new things or new milestones that we could expect for 2025. And in terms of your focus on capital recycling, how does that translate into say your work allocation, your time allocation in between asset class, in between cities, et cetera. So this is the first question. The second question is again on the four to six billion of capital recycling. Should we expect that mostly on the DPs with little portion related to IP given the, well, obviously you mentioned you're not on fire for cell, right? So, and is there any scoop that we can expect, say more determined, pays up in DP, capital recycling, say in 2025? And the third question is actually on tenant retention

[00:54:50] in Hong Kong for both offers and retail. So for offers, obviously there's new supplies and there's some tenants moving. So how are you key initiator in retaining those tenants And do you think, say, rent, negative reversion is sufficient to retain some of the tenants? And similarly for retail, like say, as you mentioned, there will be up to 40% of area being impacted by the renovation. So would it affect some of the retail brands' decision in whether to stay with your mall or temporarily move to somewhere else, et cetera. So hoping to have more current that. Okay. I'm not sure I remember all the questions, but obviously capital recycling is the topic of the day and everyone's very focused on it. So I do have some statistics to just remind you from what we said in October. So there are two major categories. There is the build to sell segment, which we will exit, comprising over $6 billion. So this is of the whole $10 billion. And just under $4 billion from our prime commercial investment property. So $6 billion is DP, effectively, development property, and $4 billion is IP.

[00:55:51] From the build to sell segment, you can further then split that into three pools. The China build to sell is largely residential in nature. There are some commercial assets, but largely residential. That's just about 2.5 billion of the six. So as that sells down, 2.5 billion of the six will come from that source. Non-core, largely retail assets and pipeline in China is a further $3 billion. So these are our ring mauls. And if you look at our ring maul in Chongqing now, in its third year of operation, it's trading very well. It's trading at a very good yield on cost and at a level that we think we could divest it at, just as an example. So some of these assets we will have to wait for leasing cycles to ensure that the yield then gets to a level that it's clear in the marketplace. You know, I personally am quite optimistic that interest rates in China may continue to fall for all sorts of different reasons. That will obviously then make capital allocation to higher yielding real estate even more attractive. So there's a number of things that are floating around, but that $3 billion, probably the office piece

[00:56:52] of that is the most challenging, the office in the secondary markets. But the Ring series that we've built, particularly Chongqing and some of the other markets that we're building and completing, we're a lot more confident that over time they'll be at a level that we can trade out of. And then the third piece is the other bill to sell assets across the region, again, particularly residential. We have quite a lot of residential in Indonesia and Singapore and other markets. That's another billion US dollars. So that's the broad breakdown. Six billion, four billion. The six billion is two and a half, three and one. I think on the residential bill to sell piece, you were asking about pace there. I think we're very focused on recycling out of this segment as quickly as possible, but in a sort of measured way, it's not really sensible to slash pricing, nor does it need to be done that way. Clearly in China, we've reviewed our portfolio during the course of 2024. We've taken some provisions to mark the pricing down in selected areas. whole objective of that is to encourage the sales velocities on those projects.

[00:57:57] As I mentioned earlier, we had a number of really successful projects that completed last year and were fully sold out in China. I think in Singapore, we have an MCL land business and there's an opportunity there to potentially look to accelerate the recycling of capital in that business and we'll look to give an update on that later in the year, hopefully. I think we've got a number of initiatives that we're working on across the different buckets that Michael mentioned. So we hope to give more of an update shortly. So tenant retention, I think, is something that Hong Kong lands very focused on and also very proud of. So I mean, I threw out some stats earlier around some of our office tenants in Hong Kong having been with us for a very long time. So I think for us, our strategy in the last few years has been to retain tenants. We've done that through being flexible on rental terms. Our view has been that it's better to have a portfolio that's largely fully let

[00:58:58] so that we continue to enjoy cash flows. But importantly, it also means that when the market demand comes back, we're well placed to benefit because in Hong Kong, office lease terms are generally fixed for three years. And then they mark to market either through a rent review clause or through an expiry. So all of our leases have that feature. So as rents hopefully trend up over time, then our rents will trend up over time overall. It's not easy, though. I mean, everyone knows the broader market. It's very difficult. But in core central Hong Kong, there are really limited options for people to move to. And I think the ecosystem that Hong Kong land has, it's 12 connected buildings. The fact it's adjacent or above some of the best retail in the world, the F&B, the connectivity to the MTR, the airport, these are things that really matter. So the flight to quality trends that we've been talking about were really evident last year because we had a number of

[00:59:59] tenants move in from what I call fringe central buildings into our portfolio. So not easy as I said but I think Hong Kong land's done a pretty good job there. On the retail side you're right as you walk around the landmark you're starting to see a lot more hoardings come up and this year will be the year with the biggest impact in terms of percentage of flow area out of operation temporarily. About 38% of total flow area on landmark will be taken back at some point in its peak for renovation. So there is going to be an impact and we've noted that there will be an impact on earnings this year as a result of that. but in terms of tenants demand to be in this space it's completely undiminished. 50% of the area is already committed through the long-term leases that the top 10 brands have signed up to as part of their store re-imagination. So 50%

[01:01:00] done, the remaining 50% is in all in advanced negotiations. To be honest our retail footprint in Hong Kong is too small. I mean we are really about 600,000 square feet. We'd love to have more so I don't worry about my occupancy levels in retail and Hong Kong at all. I think the point Craig made as well we're in early March and 50% of our lease renewals have been done for this year so you know very very early in the year we've already covered from a risk management perspective a lot of our major expiries. We'll make sure the team focuses on the rest and then we'll have the rest of the year to focus on our seven percent vacancy. Unfortunately a lot of that vacancy has spread through the 12 buildings. It's not in a contiguous manner. So it's a continual battle to make sure that as our tenants grow that we can accommodate them. One of our tenants moving to Henderson because we just couldn't accommodate them in our portfolio, which was quite annoying. But all of that space has, I think, now been effectively recommitted by tenant expansion. So it's quite an interesting game that we have to play. But we've got a really good

[01:02:01] team, I think, best in class, who are managing all of these risk positions that we're taking. Hi, this is Kar Chen from JP Morgan. So I have two questions So the first question is more like a follow-up on the Hong Kong office market So just curious for 2025 in terms of the negative rental reversion as you mentioned that would be our outlook But in terms of the magnitude do you think that it could narrow a bit in 2025 and in terms of occupancy rate? Do you think there will be some improvement in 2025 as well? And then I'm just curious if you can also give us a bit more colors on the recent inquiries in the office space. Say in the past two months do you see a pickup in inquiries from the new tenants? So that's my first question. And the second question is very simple. So for DP in mainland China, do you think that we still need to do more impairment provision for this year? Thank you. Maybe if I deal with that question first and then we can pick up the office one. I think last year we went through a big exercise to review our inventory in China. We did that in the

[01:03:02] middle of last year and we came out of a half year of results to say that we intended to impair some of the inventory. Obviously, impairment is really a function of market pricing, so really the question is do we anticipate a further deterioration in market for mainland China. I mean I think the government has been doing a lot more around stimulus and really trying to stabilize the market. So from my perspective it's really hopefully we can start to see some of those policies take hold, that ultimately what it is, is consumer confidence. Because for people to want to buy residential units, they need to feel that the pricing has basically come to the bottom, or at least be stable. So I think the policies are important. I also think the stock market being up is also a good thing, because it helps with confidence overall. So we certainly don't want impairments to be a regular feature of our results presentations, but ultimately it's going to be driven

[01:04:04] by the overall market conditions. But as I said, most of our projects are very high quality in prime locations. And just like anything in any real estate market around the world, quality, well-located cells. So I mean, we're blessed in that we only have a small number of projects that are probably in decentralized locations. and those are the ones that we've already written down. And just a supplement, I personally think that in continued fiscal stimulation of the domestic economy in China will continue. We saw in the first week of October and Golden Week when there was a stimulus package, our sales tripled from the week before in that week. So it really is quite sensitive. And to Craig's point, it's not a crisis of capital, it's a crisis of confidence, right? And so as soon as people start feeling there's more confidence and more government support. So the duality of further fiscal stimulus and potentially interest rates falling is a great sort of parallel. So, you know, hopefully we, as Craig said, we've really taken a deep dive in all our projects.

[01:05:06] The ones that we have not provisioned have a healthy margin in place that still gives us the capacity to move prices as we need to in market without taking any impairment. Hong Kong office, Crystal Bowl. I mean, maybe if I say a few words, Michael, you may want to chip in. I think the, in terms of inquiry levels, last year was quite quiet generally. I would say that we've seen a pickup in inquiries in the last few months. And I mean, I think inquiry levels have doubled in the last few months from where they were in the third quarter last year, coming from a low base, admittedly. But I think we are starting to see a lot more people make inquiries. Rental levels, too early to bake this for the full year, but we're starting to see some green shoots around stabilization. So I think if we can see an uptake in inquiry levels, if people feel that this is rents of maybe starting to bottom out, it gives them the confidence to think about their office

[01:06:10] occupation needs. The IPO market activity and hopefully seeing that start to rise. I think we all know that the office market in Hong Kong can move very quickly in terms of sentiment. There's a lot of supply in the city though, which is obviously going to take a long time to be absorbed. But I feel quite confident about our central market. I mean, I think if you look at the vacancy or the amount of new supply in core central, we've got a couple of new buildings that are still being let up. We've got a project just across the road that's in the process of being constructed, that's it. So once those buildings are basically let up, it means that you know core central landlords have fairly strong pricing power when the market demand comes back. And like most markets globally whether it's London or New York, there's a real desire to be in the heart of the city, best-in-class buildings, ecosystems well-connected. So there's definitely going to be a continued divergence in

[01:07:13] in rents between the best of the best and the grade being below. So I think Hong Kong itself has got quite a lot of challenges to face into in terms of office in the city wide. But I think if you're in a very strong prime location and a good office portfolio, I personally feel quite confident about it generally. Can you cover it? Please. Thank you management. This is Mark Leung from UBS. I have a few questions. The first question is quite short. Number one is, whether will you consider listing Hong Kong? Secondly, is more back to the asset recycling again. I think Michael has touched about the $6 billion development properties going to be recycled. But how about for the remaining $4 billion investment properties? How do you view asset spinoff through series or other reads in maybe Hong Kong or in Singapore?

[01:08:15] And then the first and then the last question. So the third question is, where do you see new investment opportunities coming from the integrated project? And last but not least, it's just more housekeeping with our sales margin for mainland China and going forward the guidance. Thank you. Okay. Plenty of questions there. I've got a question today. Let me take the... You start with the Hong Kong listing. I mean, just to remind everybody, our primary listing is in London, our secondary listing is in Singapore. consistent and the same as the Jardine group generally. Hong Kong man has Hong Kong and its name so it's a natural question to ask and to be honest with you it's something that's been reviewed at the board level a number of times. I think the coming back to Hong Kong to list is something that continues to be kept under review but frankly we feel that our current listing has served as well, continues to serve as well. What might change to be a catalyst to that, I think it's really going to be linked to

[01:09:17] China and how we see the equity flow through some of the stock connect programs. But at this juncture based on the work that we've done, we don't feel that our share price performance has been adversely impacted by not being based in Hong Kong. So I wouldn't anticipate any change in the near term in that area overall. Just on the sales margin point, last year 2024 our China built to sell residential margins were 25% pre-tax, pretty healthy actually, which again talks to the testament I was saying about, it's testament to what I was saying about the high quality of the products or projects that we completed last year. So, but I acknowledge that you know in terms of our remaining inventory, the profit margin ranges quite significantly from zero on projects that we've impaired all the way through to projects in the 30s. So it's a bit of a mix. Just in terms of the platform opportunities you mentioned, there's a lot of people around

[01:10:21] our executive management team now who really have a lot of experience around rates and funds and things, but we're in no rush. We don't have to rush into anything. As I mentioned before we have $2.5 billion of bill to sell in China and other billion dollars of effectively bill to sell outside of China that because of our pivotal switch we're not going to reinvest in any of that land. So as that product unwinds and is sold that will come back to us. We can then de-gear or we could do buybacks that we've committed to, we could help fund our dividend or we could go and find projects either standalone or platform type projects that we can invest in. But it's really we're quite fortunate that we're in a position and that we're not just an IP company. If we were just an IP company saying that we were going to divest $4 billion to $6 billion in this market, it would be challenging. But because all of this product is already designed for sale, it will sell. We've got 25% margins, as we're saying, as it sells. And as long as we don't reinvest that money back into new land, which we don't intend to, that's the capital that will come back first. So there are lots of other initiatives

[01:11:22] that we're thinking through and planning on. But that is sort of like a liquid recycling of capital that we obviously still need to focus on and think about, but that capital will come back. Maybe we take a couple of questions that have been posed online. So first of all, from Nicholas Chen from credit sites, a few questions here. Can you provide the split between office rental and retail within Hong Kong lands, total rental income? You'll have seen there's a slide in the presentation today that breaks out our rental income by type and by country. But I think this question is primarily about Hong Kong. Generally speaking, about 80% of our rental income in Hong Kong comes from office and 20% from retail, generally speaking. He's also asking, within retail rental, how much is contributed by the VIC segment. Again, in Hong Kong, the vast majority of our customer base are VIC in nature. So I guess you could see all of it comes from the VIC segment.

[01:12:22] But our rental income comprises a mixture of fixed-based rent and turnover rent. About 15% of our rental income last year came from turnover. 85% was fixed. So in that sense, it's sort of stable in nature, generally. Question two about the dividend and the fact that we increased it. And are we being too early with the increase and too aggressive? I think, obviously, as part of our strategy refresh, we've made a commitment to double dividends per share in 10 years' time. We're aiming to do that in a measured way. We feel that whilst our earnings may move up and down year to year, our strong balance sheet obviously speaks for itself, the fact that we're planning to recycle capital, which can also be used to fund dividend growth overall. And also, I think, just to clarify, a one cent increase is a cash cost of US$22 million.

[01:13:24] So in the context of our balance sheet is quite a modest amount of money. So the board was actually very happy to increase the dividend and hopefully there'll be more increases to come in future years. Just a supplement, we're going from a development business, which most developers have a lower payout ratio, because they want to retain earnings to fund the acquisition of new land. So we're going from that sort of more development focus to an investment sort of rate-like focus. Our payout ratio can go up as we become more income, recurring income, and we don't necessarily then need to retain earnings. So going from where we were, 67% to 70%, giving guidance of 60% to 80%, there's still a lot of capacity there just on the payout ratio as we sell our DP, as we have more recurring income to grow that payout ratio up further. And then just Nicholas had one other question around when should we expect the last of the existing residential inventories in China to be fully disposed of. As Michael mentioned, there's about 2.7 billion US dollars

[01:14:26] of bill to sell inventory in China that we have at the end of last year. I'm expecting about 80% of that to be liquidated in the next three years, just to give you a sense of our expectation on cashflow. Right, one other question maybe from Joe Ho, Rondell Investments, can you give some update on 2024 and 2025 retail sales performance in mainland China, especially WF Central? I think here, WF Central is a luxury focused mall in Beijing. Our performance for the mall in a year, I think bet the market overall, because we're in the midst of repositioning some of our tenant mix. The basement floor was redone at the end of 2023. We've also swapped out some of our Maison brands. So for us, we've seen improved sales performance, but I think it is against a market backdrop that's down by about 20% to 30% for luxury goods in China.

[01:15:28] So I think this sort of more positive performance is really due to our own tenant positioning mix. I think the market remains pretty challenging. And he's also asking about our views on organic rental growth in China. And I think right now, obviously, the market is in a pretty difficult place. So we're not anticipating huge organic growth for 2025, generally. Any questions from the floor? There's one from Rachel from Macquarie asking about the divestments that were undertaken in 24, the $300 million US of divestments. And will that result in 20% being used for a buyback? So as we've said, we've deguided. We've increased our dividend. I think my personal preference is that when we do announce a buyback, it's meaningful. So we are working on a number of things to try and ensure that a buyback is implemented as per what we committed to last year. But after that 60 million on 300, which is 20%, 22 going to an increased dividend, the

[01:16:29] de-gearing that we've done, I think we'd prefer to get to a more meaningful position before we launch a buyback. Joe from Rondell has got one follow-up question. is net debt level if you include the net debt from John Ventures and Associates. So Hong Kong land's group net debt at the end of last year was $5.1 billion. Our share of net debt at John Ventures and Associates is an additional $2 billion. Most of that $2 billion is in Singapore. And that's because our one raffle is key, an MBFC office portfolio. We own a one third interest so it's held in John Venture, which is why the debt's off the balance sheet, we have a modest amount of debt in our China portfolio. Hi. Hello. This is Chris from Credit Agricole. So I have two questions from the perspective of bondholders. So we are the credit investors of Hong Kong land. So my first question will

[01:17:29] be, well, today we hear a lot about your capital recycle strategy and the share buybacks program commitment. So what is the commitment that you can make to the bondholders to protect our interest? That's my first question. The second question is on the rating. So has the company communicate with the rating agency and is there any commitment or any kind of a forecast that you can make to the rating agencies so that we can keep our current rating? Okay, I think there are good questions. Our bonds are effectively issued and secured by the cash flows of the Hong Kong central portfolio. So our business interests in mainland China and Singapore are obviously very important to Hong Kong land but in terms of a bond fixed income investor is very much about what's happening in Hong Kong central. Here our investment in tomorrow's central is all about enhancing and protecting our cash flows in Hong Kong central for the years

[01:18:34] and decades to come. So from a fixed income point of view hopefully that investment gives you a little bit of confidence in the group zone ambition to continue to ensure this portfolio remains resilient. Our debt levels that we have against the Hong Kong central portfolio continue to be prudent and therefore again the capital recycling initiatives that we're doing are generally in other markets outside of Hong Kong. So hopefully you've seen on the slides the sort of Hong Kong rental income that we've had over the last five years. It has decreased, but I think it's been pretty resilient despite the broader market challenges overall. And then I think on the credit rating point, absolutely speak to the credit rating agencies on an ongoing basis. I mean, their feedback on our new strategy has been incredibly positive, and it's been positive for two key reasons. One, we're not planning to exit our Hong Kong portfolio, which is very stable.

[01:19:34] And two, we're recycling capital, which will ultimately see our net debt levels reduce. And so despite, again, the broader market challenges, higher interest rates, they're quite positive and constructive on Hong Kong land because we're being proactive to manage our balance sheet for the current marketing environment. That's great. No more questions. been transparent and clear, like was our objectives. If there's nothing else, thank you very much for being here today. We really appreciate all your support and endorsement, and we look forward to meeting you again soon with more positive announcements. Thank you. Thank you. Thank you.