2022 Annual Results Presentation

Good morning, everyone. I'm so glad to see you all here physically, finally, after three years. I'm so excited that I really want to continue the cheat chat with you all, but since I need to do the result announcement first, why not finish the formal part of it and then I look forward to enjoying the cheat chat with you day after. Again, I also welcome those that are participating in this result announcement through online. I'm Robert Wong, the Chief Executive of Hong Kong Land, and with me is Create Ability, our Chief Financial Officer. Following our presentation, there will be opportunities for questions, and for those of you watching via the webcast, do send us the questions through the website, and we will include them in the Q&A sessions. Today, I will take you through some of the key market updates and result announcements for investment properties and development properties before turning over to Craig to

cover the financial highlights. I will then conclude with an update on the Group's disability and other corporate initiatives as well as our outlook followed by Q&A. Before I move into the full year results in detail, let me first provide a brief update on our key business segments, along with observations in each of our key markets. 2022 was a challenging year, as we continue to face uncertainties related to anti-pandemic measures across China, as well as global macroeconomic headwinds. In Hong Kong, the office market was affected by uncertainty around the pandemic situations on the Chinese mainland, as well as increasing global economic volatility. Vacancies across the cities increased as a result of high levels of new supply.

The increase in supply in Central remained modest. The group's Central portfolio continued to enjoy lower vacancies compared to both the broader market across Hong Kong and the office market in Central. Driven by a continued flight to quality, demand from occupiers attracted to portfolios premium offerings. While the demand for flexible working has increased, bringing visible disruptions to the office markets in other business center across the globe, this is less felt in our portfolios in Hong Kong and also in Singapore. Moving on to luxury retail, food for and tenant sales were severely affected by the fifth wave of the pandemic in the first half of 2022. Having said that, once the restriction eased, we saw a marked improvement in market

sentiment, even though tourist numbers remained low through late last year. Moving on to the Chinese mainland, sentiment for the residential market remained cautious for the majority of the year. The impact of serious Covid policies and the challenging economic outlook all for all have weighted on residential demand. Development activities were slow by pandemic-related shutdowns delaying the timing of completion on residential completions. Turning to retail, trading at our malls were negatively impacted by anti-pandemic measures throughout the year, with both with fall and tenant sales lower compared to the prior year. In Singapore, office demand momentum benefited from the lifting of anti-pandemic restrictions

in April 2022. Net options were positive and higher than the prior year. Office rents continue to rise due to healthy demand and supply dynamics resulting in low vacancies. Leasing momentums at the group's flagship assets were in line with the wider market. On the residential side, buyer sentiment remains healthy despite cooling measures introduced in late 2021 and in Q3 2022. Presales at the group's two residential projects were very well received by the market. Turning to an overview of 2022 results, the group's underlying profits in 2022 was $776 million, down 20% compared to the same period last year.

Profits from the group's investment properties business were marginally lower, while contributions from the group's development properties business decrease due to fewer planned sales competitions and impact of pandemic-related restrictions on construction activities. Profit attributable to shareholders was $203 million, which includes a net loss of $573 million, arising mainly from the evaluations of the group investment properties portfolio due to a modest expansion of capitalization rates in Hong Kong office and lower market rents for the Hong Kong retail portfolio. In terms of underlying earnings per share, the group generated 34.44 US cents, while the overall earnings per share was 8.99 US cents after the impact of non-trading items.

The net asset value per share, as at the 31st of December 2022, was $14 US dollars and 95 cents. The board has declared a final dividend of US$16 per share, which brings the dividends for the full year to US$22 per share unchanged from prior year. The Group On sheet and funding position remain strong. Now let's turn to some of the progress we made in 2022. During the year, the Group commenced the sales of Piccadilly Grand and Galleria in May and Cooper Grand in October in Singapore, both residential developments. The project was well received in the market and as at the end of December, these projects were 85% and 100% pre-sold or reserved respectively.

In June, the Group's 2030 decarbonisation targets covering both Scope 1 and 2, as well scope 3 emissions were validated by Science Space Target's initiatives. In July, the group announced an intention to invest a further US$500 million in the share buyback program that was announced in the second half of 2021, returning up to a total of US$1 US dollars to its shareholders. The share buyback programme has been extended to the end of 2023. The group continued response to the changing preferences and demands of our tenants and customers by introducing a number of innovative placemaking concepts and fresh offerings in 2022, which I will explain in more detail later in the presentation.

In terms of land banking, the group successfully secured four new sites during the year. Two of those sites are primarily residential, one located to the next to Westbun, Shanghai, and also the other in Singapore. The other two are mixed-use sites in Suzhou, the eight cities that we have entered in the Chinese mainland, as well as one located in the greater Jakarta area. I'll provide further details on these exciting new developments in our business later in the presentation. I shall now turn to investment properties. Turning first to our Hong Kong office portfolio at the heart of Core Central Hong Kong, performance from the office portfolio was stable and indeed outperformed the broader market due to its prime CBD locations and premium offerings.

Reversions were negative in 2022, with average office rent decreasing to $111 per square foot from $117 in 2021. Fishcovacency at the end of December 2022 decreased to 4.9% from 5.2% the end of 2021. On a committed basis, vacancy was 4.7% at the end of December 2022, decreasing from 4.9% at the end of 2021. By comparison, vacancy based on existing lease commandments across the Hong Kong central grade A office market was 8.8%, a sizeable increase from 8% at the end of 2021. The weighted average least expiry at the end of 2022 was four years compared to 4.2 years at the end of 2021. The portfolio's top 30 tenants, who occupy close

to half of our total office net-leasable area in Hong Kong, had a weighted average least expiry of 5.8 years compared to 6.1 years at the end of 2021. At the end of 2022, only 22% of our Hong Kong office portfolio is subject to expiration and rent reversions in 2023. Including concluded renewals and rent reviews subsequent to year end, this has decreased to 16% of our portfolio with approximately 7% relating to expiration and the remainder to rent revisions. Turning to our luxury retail portfolio in Hong Kong, Landmark, which continues to remain the preeminent luxury shopping and fine dining destination in Hong Kong. Average net rents decreased by 7% to 177 Hong Kong dollars