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

per square foot per month in 2022 when compared to 2021 primarily due to negative base rent reversions. Excluding the impact of rent relief, average net rents in 2020, 2021 and 2022 were $212, $202, and $191 HKD per square foot per month, respectively. Occupancy remained robust, with vacancy on a committed basis remained low at 0.5%. Tenant sales were stable compared to 2021, although remains well below pre-COVID level due to the lack of tourists in Hong Kong. Footfall declined by 19% compared to 2021, partly due to the easing of travel restrictions in Hong Kong,

which allowed a significant number of affluent locals traveling aboard during the holiday season. In 2022, the group continued its place-making initiatives as a central portfolio. In December, the group expanded its successful premium food hall concept in the basement of Jardin House by launching Base Hall 2. Base Hall 2 provides a fluid space for multi-concept dining as well as the flexibility of host events for our tenants and customers, such as private parties, music events, cooking classes and DJ nights. Together with Base Hall 1, the two venues house 23 unique foot and breath rage concepts and present a collection of Hong Kong's best foot and breath rage experiences under one roof. In addition to diversifying our F&B offerings to reinforce the group's leading positions in bringing innovative concepts to Central and Hong Kong,

Hong Kong, the group continue its decades-long focus in promoting arts and culture landscape in Hong Kong by welcoming Sotheby's, the world largest international auction house, to its retail space at Landmark Chater. The 24,000 square feet, two-story interconnected new space will be the state-of-the-art immersive exhibition space located at the heart of the luxury retail destinations in Central and Hong Kong. This will be Sotheby's third mason after the highly successful openings in New York and London. In addition to hosting an ultra-contemporary exhibition space to host live auctions, private sales, and masterworks exhibitions year-round, the multifunctional space will also include art and luxury collectibles available to the public for instant purchase. In addition, a Sotheby's F&B concept will complement this

experience. The space is expected to be open to the public in 2024. Turning now to our portfolio in Singapore. Average gross rent across our Singapore office portfolio in 2022 was $10.6 Singapore dollars per square foot per month, a 3% increase from $10.3 Singapore dollars in 2021. Positive rental reversions were achieved during the year. Physical vacancies across the portfolio was 7.5% compared with 6.5% at the end of 2021. On a committed basis though, vacancy remained low at 2.2% compared with 2.9% at the end of 2021.

As at the end of 2022, only 11% of our portfolio was subject to expiration or rental reversions in 2023. Turning to other parts of Asia, in Beijing, food for antenna cells were negatively impacted by anti-pandemic measures, which include frequent lockdowns in multiple areas of cities. Tenant sales at Wang Fu Central was down 7% compared to 2021. In 2022, tenant repositioning efforts continued with 34 new tenancy secures during the year, and expanded presence from six luxury brands. The opening of Gucci expansion is scheduled for the first quarter of 2023, while Bubari, duplex, Plata duplex and Valentino are expected

to open in the first half of 2023. At the end of 2022, the property was 82% led. In Macau, tighter border restrictions with the Chinese mainland has resulted in the decline in visitors and food for at one central Macau. Tenant sales in 2022 decreased by 22% compared with the same period in 2021. In Indonesia, Jakarta land performed within expectation in an oversupply the market of its occupancy at the end of 2022 was 71%. committed basis, Ting Nang Count existing lease commitments occupancy was 72%. In Pint Nong Pang, the office space of our Prime Mix Use Complex Exchange Square was 94% occupied at the end of 2022 compared to 95% at the end of 2021. Turning now to an update on the

Westbun. As a result of COVID-related city lockdowns in Shanghai, construction at Westbun, a 1.1 million square feet square meters mixed use site, was briefly suspended. Construction resumed during the second half of 2022 with construction largely progressing on schedule and is expected to be completed in phase through 2027.

Phase 1 includes primarily the residential component, both for lease and for sale, as well as parks of the premium lifestyle retail for lease components. The residential properties for sale component will be launched later this year. Service apartments for lease and parks of the premium lifestyle retail are expected to be launched by 2024. Phase 2, which is expected to be completed in stages between 2024 and 2026, will consist of low and mid-rise offices, hotels, and convention centres and other cultural facilities. The group is in the process of engaging the interested parties for the office component. Phase 3 will consist of the office and luxury retail for lease, as well as a premium hotel and service apartment which is expected to be operated by a global high-end hotel brand. The positioning of Phase 3 expected to rival our central portfolio in Hong Kong

completion is expected in stages from 2026 to 2027. In 2023, as part of the Phase 1 development of Westburn, the group will be launching the residential property for sale. These flagship residential units are located at the heart of the vibrant Westburn community, surrounded by future commercial developments consisting of grade A office towers, high-end hotels, both luxury and lifestyle retail, as well as cultural and community facilities. On top of its superior locations. The residential units will feature state-of-the-art craftsmanship and design, together with premium amenities and unparalleled quality attributes deeply ingrained within the Hong Kong land brand. The total development area is approximately 24,000 square meters with

approximately 80 units housed mainly within the two high-rise towers. Completion is expected by the end of 2023. Moving on to development properties. On the Chinese mainland, the group development properties pipeline includes 35 projects spread across seven cities with total attributable developer area amounting to 7.9 million square metres. Of these, construction of of approximately 66% had been completed at the end of 2022. Chongqing remains our largest market and accounts of 62% of our Chinese mainland business by attributable developable area. We currently have 14 projects in Chongqing with an attributable area of 4.9 million square meters.

By exposure in US dollars, which comprises committed development courses, less presale proceeds, contractually secured. Chongqing is also our largest market on the Chinese mainland and accounts for 33% followed by Shanghai, Nanjing and Wuhan, which accounts for 22%, 16% and also 16% respectively. Market sentiment remains weak throughout the year due to anti-pandemic restrictions. The impact of zero Covid policies and a challenging economic outlook overall have significantly weighted on residential demand. During the year, the group share of development properties revenue recognised on the Chinese mainland, including its subsidiary and share of joint venture was US$1,873 million.

These represent a 23% decrease from the prior year, primarily due to planned timings of completions, due to lower level for investment into Development Properties Land Bank to conserve capital ahead of the Group's acquisitions of the Westbun site in 2020. The Group's shares of contractor sales was USD 1.3 billion compared to USD 2.6 billion 2021. The decline in contractor sales is due to fewer planned sales launches and challenging market conditions during the year. Sales performance during the year was mixed and impacted by cooling measures introduced in the local markets as well as the project locations. Sales launches in Chongqing and Chengdu were generally well received in the market. By comparison, sales launches were

slower in Nanjing and Wuhan due to more challenging local market conditions. At the end of 2022, the group's shares of sold and unrecognized contract sales in this development on the Chinese mainland was USD $2 billion, with 55% expected to be recognized in 2023.

The group recorded a gross margin of 22% down from 28% recorded in 2021, one, primarily due to high contributions from more recently acquired projects. Turning now to Singapore, where the groups have five development projects with a total attributable, developable area amounting to approximately 220,000 square metres of these, construction of approximately 50% have been completed at the end of 2022. the relaxation of anti-pandemic restrictions, residential market sentiment recovered during the year. Revenue recognised in Singapore was US$379 million, compared with US$631 million in 2021. 2021 had benefited from construction progress of the wholly owned 1,004 units

Park Esther project which was hand over to the providers in 2022. In terms of sales performance, Contracted sales in 2022 was US$615 million, compared to US$328 million in 2021, driven primarily by the launch of Piccadilly, Gran and Galleria, and also Cooper Grant, both well received by the market, having pre-sold or reserved 85% or 100% of his units, respectively. As at the end of 2022, so-but-unrecognized contract sales in Singapore was US$589 million, with 44% scheduled to be recognized in 2023 under the percentage of completion method. to new projects. In 2022, the group continued to discipline and opportunistic in the evaluation and selection

of development properties opportunities. During the year, the group secured two new projects on the Chinese mainland, one in Shanghai and one in Suzhou. The group secured a 34% interest in a primarily residential site in the Xuhe District in in Shanghai, adjacent to our 1.1 million square meters mixed use project in Westbun. With a cross-fraud area of 54,900 square meters, the development will comprise six high-rise apartment blocks with a total of over 460 premium residential units. Completion is expected by 2024. In Suzhou, the group entered in the joint venture on a commercial project that will consist on the luxury mall and hotel. The total developable area of the site is 130,000 square meter-ish, and it is expected to be completed in 2026.

This acquisition reflects the group's strategy of developing a portfolio of luxury and premium lifestyle retail properties on the Chinese mainland. Separately, the group increased its investment in two existing projects, including acquiring from KWG the remaining 50% interest in V-City, a mixed-use project in Chengdu in November 2022, and also acquiring a 15% interest in Yew City, a mixed-use project in Nanjing from Country Garden with completion of the transaction expected in the first half of this year. to Southeast Asia. During the year, the group secured two new development property projects, one in Singapore and one in Jakarta. In Singapore, earlier in the year, the group acquired a 49% interest in the residential site in Jalan Tabusu area with a developable area of 60,000

square metres and is expected to yield a total of 638 units. Completion is expected by 2025. In Jakarta, the group acquired a 50% interest in a primarily residential site in the south west of Jakarta with a developable area of 315,000 square metres. The project will consist of predominantly landhouses and expected to be completed in phases from 2025 to 2032. This concludes the review of our investment and development properties portfolio. I'll now pass over to Craig to take you through the financial results. Thank you Robert and good morning to everybody. I will now take you through our financial performance in 2022.

All the numbers referred to in this presentation are in US dollars unless otherwise indicated. 2022 was a challenging year with anti-pandemic measures across China affecting our business. During these challenges, the group produced a satisfactory performance. Contributions from development properties were significantly lower than 2021, whilst the contribution from investment properties was steady compared to the prior year. Underlying profits were $776 million in 2022, down 20% compared to 2021. profits from investment properties decreased by 22 million year on year. This decrease was mainly in Hong Kong, primarily from negative rental reversions in the office portfolio. Hong Kong retail had a challenging start to the year as the fifth wave of COVID-19 impacted business levels, although retail sales increased in the second half of the year, aided by

the relaxation of social distancing restrictions. cost savings helped to mitigate the impacts of lower rents. In Macau, net rental income was also lower as the border with the Chinese mainland was closed for most of the year, impacting tenant sales. Operating profits from development properties decreased by 240 million year on year, primarily due to less planned sales completions on the Chinese mainland and to a lesser extent in Singapore. There was also some impact from construction delays in China projects due to pandemic measures, notably on one project in Shanghai. There was an increase in total contributions from projects in South Asia year-on-year, helped by higher completion progress from projects in Indonesia and Vietnam. There was a net decrease in tax charges in the period due to a smaller share of profits coming from the Chinese mainland, where tax rates are higher than Hong Kong.

costs increased as the group had higher net debt levels due to less proceeds from residential sales on the Chinese mainland. And the impact of rising interest rates was modest as the group has a significant portion of fixed cost debt. Overall, the operating profit split between investment properties and development properties was roughly 70-30 in 2022 compared to 60-40 in 2021. to rental income by region. The combined rental income from our office and retail portfolio in Hong Kong declined by 3% compared with 2021. Most of the decrease is due to negative rental reversions in the office portfolio. Retail rents decreased due to negative-based rent reversions, partly offset by decline in temporary rent relief provided to our tenants. Rental rental income in Singapore was stable, which benefited from an increase in average office

rent. On the Chinese mainland, rental income increased 8% in 2022 compared to the prior year, mainly reflecting a full year of rental income from the Ring retail mall in Chongqing, which opened in the second quarter of last year. The Ring's improved results were partially offset by a decline in rental income from or other retail malls due to pandemic-related restrictions. Turning to the operating profit of the group's development properties by region, please note this slide includes the group share of joint ventures and associates. Operating profits on the Chinese mainland declined by $229 million, primarily due to fewer planned sales completions, as previously mentioned. Anti-pandemic restrictions on construction activities also resulted in some project completions to be delayed to 2023. Average profit margins trended lower compared to the prior year.

Operating profit in Singapore development properties are recognised on a percentage of completion basis and profits declined by 51 million compared with 2021 due to a lower volume of construction works in progress during the year. A large project called Parque Esta is approaching completion and the majority of its revenue was recognised in 2021. In others, operating profit increased to 54 million, mainly due to higher completion progress on projects in Indonesia, as well as the handover of units and a completed development in Vietnam. Let's now turn to an update on capital management. In line with previous guidance, we endeavoured to maintain a steady or increasing dividend as our earnings grow. The group expects the dividend to be maintained in a down year, even if we consider this to be caused by temporary factors, with a resulting increase in payout ratio. This is particularly evident this year, with our dividends per share held constant and

a corresponding increase in our payout ratio to 64% due to lower profitability in 2022. Last year the group committed 1 billion of capital to new projects, 300 of this related to the acquisition of a China luxury retail development project in Suzhou, and the balance of 700 million was invested in new development projects in Shanghai, Singapore and Jakarta. In the past six years the group has committed total capital of 13.3 billion to new development projects of which 81% has been in development properties and 19% in investment properties. Development properties are developed for sale, enabling capital deployed to be generally recycled within two to five years and generating profits for the group. Investment properties are developed and held for recurring rental income and capital appreciation over the long term.

The most significant investment property project in recent years was the acquisition of Westbund and Shanghai in 2020. In the past six years, the group has invested an average of 1.9 billion a year in development property projects compared to an average of 0.6 billion in the five years preceding, an increase of over 200%. This increased investment has benefited both our capital recycling and earnings in recent years and looking forward, the recent investments will benefit earnings and cash flow going forward. On shared buyback, the group completed a 500 million shared buyback program in July 2022, which was followed by the announcement of an additional 500 million to be invested through to the end of 2023. The total amount invested in the buyback program since it was first announced in September 2021 is $556 million as of 28 February 2023 with $350 million

invested in 2022. The shared buyback does not change our previously stated approach on dividends or are focused to secure attractive new development projects. I will now turn to the group's net debt and cash flow position. The group's financial position and liquidity remained strong. As previously mentioned, net debt was 5.8 billion and net gearing was 17%, up from 5.1 billion and 15% at the end of 2021, but down from 6.1 billion and 18% at the end of June 2022, which was our half year results. The increase in net debt was primarily due to lower sales proceeds from the development properties business. The group continue to generate strong cash flow from its investment properties business highlighted by $787 million from net rental income and fee receipts stabled compared to the prior

year. Cash proceeds from development property sales declined to just over $1 billion, a reflection of the difficult market conditions on the Chinese mainland. The decrease in capex during the year to 1.4 billion net outflow compared to 2 billion net outflow in 2021 was primarily driven by a decline in the number of development property site acquisitions during the year partly offset by increased development expenditure on the Chinese mainland in respect to the various ongoing projects that have been acquired since 2021. The maturity profile of the group's debt is shown on the left-hand side of this slide. The debt Debt maturities are staggered over a number of years and are well diversified between both banks and debt capital markets. The scheduled maturities in the next two years are relatively modest and can be financed using existing committed debt facilities. The average tenor of drawn debt is 5.8 years, with the average interest cost being 3.3%,

a slight increase compared to 3.1% in 2021. interest rates increased significantly in the second half of 2022, although the impact was mitigated by having a high proportion of our debt at fixed rates. 53% of total gross debt was at fixed rates, and the largest component of our gross debt is denominated in Hong Kong dollars, of which 68% was hedged at fixed rates. At the end of December 2022, the group had available liquidity of $3.1 billion compared to $3.9 billion at the end of 2021. Our credit ratings remain with S&P and Moody's at A and A3 respectively. I will now hand back to Robert who will close with comments on our sustainability achievements in 2022 and a few of our ongoing corporate initiatives and the outlook for this year.

Thank you Craig. Moving on to accessibility, I would like to highlight a few of the group's key achievements over the past year. In May, the group launched its accessibility framework 2030. The four main spotlights of climate and economic resilience, inspirational connections, operational excellence and vibrant communities and cities cover 18 focus areas linked to measurable targets. Some of the most important key focus areas for the group include climate actions, green buildings, supply chain management, tenant engagement, occupational health and safety, as well as diversity and inclusion. Hong Kong Land has a long history of reinvesting in these existing assets and undertaking a robust green building certification program.

At the end of 2022, 88% of our leasing portfolio by floor area, including those held in John Manchus, achieved green building certifications with all our buildings in Hong Kong and Singapore comprising 51% of our leasing portfolio achieving the highest possible ratings of beam plus platinum and green mark platinum certifications respectively. In June, last year, the group 2030 decarbonization targets that are aligned with the 1.5 degree pathway were validated by the science-based target initiatives. These targets include firstly a 46.2% reduction of absolute scope 1 and scope 2 emissions by 2030 from 2019 levels.

Secondly, a 22% reduction of carbon intensity for scope 3 emissions over the same period. We look forward to delivering on the Group's decarbonisation's commitments in the years ahead with the support of our stakeholders, including our friends in the construction sector as well as others in the property development value chain. In line with the Chinese central government ambitions to achieve carbon neutrality by 2060, the Group's luxury flagship retail property in Beijing, Wang Fu Central, is powered by 100% renewable energy. It is among the first commercial complexes in Beijing to achieve this. The renewable energy is generated by solar and wind power systems from northwest China. In July 2022, the group published its inaugural Green Finance Report, providing

stakeholders updates on our green financing transactions in accordance with the green financing framework, information on the proceeds of the group's green bonds and green elements of the project financed are captured in the report. Moving on to ESG ratings, the group's performance has seen significant influence over the past 18 months, achieving strong results across a number of assessments. On the Global Real Estate Sustainability Benchmarks, the group achieved the highest five-star rating for standing investments, which recognizes an entity placed in the top 20% of the benchmark. On the Corporate Sustainability Assessment administered by S&P Global, the group scored 70 out of 100, improving from 50 to out of 100 in the prior year. The group also qualified for the first time as the constituent of the Daozong Sustainability

Asia-Pacific index. For system analytics, the group obtained a company ESG rating of 17.6 that is considered low risk, improving from 20.4 medium risk in the prior year. Finally, on the Climate Disclosure Project, CDP, the group retains its climate change score of B. Separately, the group is also proud to have received a number of awards in recognition of our operational excellence. With regard to looking after our people, we are honoured to have received five awards in recognition of our outstanding people strategy and talent development at the Best HR Awards 2022 Host by CET Good Jobs. In addition to the Grand Award for the Employer of the Year, we also received a Best Award

and Recognition Strategy Award Grand Award, Top Happiest Culture Award Go Award, Best Corporate Wellbeing Program Award Go Award, and Best L&D Technology Implementations Go Award. From property management, the group was recognised by its efforts to adhere to the highest standard. As its exchange-square complex in Hong Kong was awarded the Grand Award at the Quality Property and Faxility Management Award 2022 under the large-scale Office Building Management category jointly organised by the Hong Kong Association of Property Management Companies and the Hong Kong Institute of Surveyors, Property and Facility Management Division. Moving on to a few of our corporate initiatives. Next, I would like to take a few moments to provide a brief update on the group's digitization efforts.

On the customer side, the group continues to enhance the competitiveness of its commercial portfolios by enhancing the services and amenities to both the tenants and shoppers. A new landmark app was launched in March 2022 to provide shoppers and loyalty members with a more personalized and intuitive user experience. As part of the Landmark Christmas campaign last December, the group created the landmark XmasWIS, which delivered a unique virtual reality experience to our shoppers. The inaugural applications of Westfree was aimed to provide better experiences to tech-savvy shoppers and achieve over 16,000 visits over the holiday period. We also plan to have collaborated with both Tiffany and Cole and Sovereign on this project.

The Group Stenstricity app, which provides seamless access to services, shared space, privileges and experiences at the central portfolio now have over 21,000 users, represent over 80% of the portfolio office population. Over the past year, over 300 tenants sessions covering wellness classes and lifestyle workshops. To encourage our customers to adopt low carbon consumption living habits, a VeChat mini program was launched by the Ring. Our premium lifestyle retailed more in Chongqing. The program attracted over 20,000 users in its first month who can redeem prices through participating in low carbon living activities. Finally, digitization efforts on the group's operations continue at pace. Recent achievements include deploying the winning AI model

prediction algorithm, focus on driving energy efficiency in our retail operation on the Chinese mainland, and progressively adopting a new smart logistics and construction system to optimize key phases throughout the property development value chain. This include design, construction, procurement, finance, and pre-sales. The new systems also maximizes the use of virtual simulations to minimize delays and waste as well as pioneer the use of exoskeletons, which would reduce the risk of work injuries by up to 80%. Moving to CSL. The Home Fund, which the group's launch in late 2020, continues to target its efforts on social inclusion, outward mobility of youth, and elevating housing-related social issues. Some of the key highlights in 2022 include ongoing work

with over 80 NGOs to tackle housing-related social issues. So far, this program has benefited over 6,800 individuals. Launch over 40 programs under Project Futuremark in collaboration with the Hong Kong Council of Social Services, which benefited over 1,000 young people living in subdivided flats. As part of the Hong Fund's collaboration with JCD ISI of PolyU, furniture is being distributed to 2,000 children living in subdivided units. During the fifth wave of the pandemic in Hong Kong earlier last year, the group contributed $15 million Hong Kong dollars to the Hong Fund in support of initiatives ranging from delivering hot meals and necessities

to providing over 5,000 sets of protective equipments to frontline workers in Hong Kong, which benefited over 110,000 individuals. We also built on the strength of our tenant community through a gift matching program to support Poland Cook and Foot Link. Ongoing collaboration with 15 grantees to enhance support for youth through multi-year education, job readiness and work experience programs which has so far assisted over 4,300 young people. The Hear2Help volunteer program continues to serve those in need throughout the pandemic and has accumulated 5,500 volunteer hours and over 90 volunteer programs since its inception in late 2021 and finally the Home Fund received eight awards in 2022, including the Corporate

Social Responsibility Project of the Year from RICS Awards and the Outstanding Collaboration Project from the Hong Kong Voluntary Award for the Improvement Project on Christian Jing Shen Association, which improved the living conditions of students by revamping their dormitory and equipping the equipment, the kitchens, with essential items for cooking and training purposes.

I now conclude with our outlook for Trans-23. In terms of the over-operating environment, we expect a steady recovery across the majority of the group's key markets, especially China, which benefits from the rapid stabilisation of the pandemic conditions. On the office front, trading performance is expected to remain resilient despite increased competition in Hong Kong. While the lifting of border restrictions will spur business momentum, it is too early to tell how rapidly this will translate into occupied demand. Rental reversions are expected to be moderately negative for the most of the year. However, as a result of our active lease management, areas subject to expiration in transition three at the end of last month amounted to just 7% of the central office portfolio total net leaseable area. In Hong Kong, the office portfolio is expected to remain stable on the back of healthy market

dynamics with positive reversion expected for most of the year. On the retail fronts, performance at the landmark is expected to improve as the return of visitors will be a positive to luxury retail. The eliminations of social distancing restrictions should also result in improved domestic spending. Based on tenant sales for January 2023, we are seeing signs of promising recovery. Similarly, the removal of the COVID-related restrictions for the Chinese mainland and Macau are expected to benefit WF Central in Beijing and one central Macau. Again, there were early signs of a promising recovery in January 2023. In development properties, an improvement in trading performance on the Chinese mainland is anticipated.

They are signs of a modest improvement in sentiment since the relaxation of COVID-related measures. The group is in a strong position to take advantage of an eventual market recovery as a result of its track record of actual site selection and strong execution ability. In Singapore, residential market sentiment is expected to remain healthy despite the introduction of cooling measures and a softening economic outlook. In terms of underlying profits for 2023, a stable outlook is expected with possible upside as contributions from the group's investment properties portfolio should remain resilient, while the extent of the increase in the development properties profits will depend on the pace of recovery of the Chinese property sector. Over the coming year, the group will look to maintain a significant momentum built

over the past two years on sustainability and CSR initiative and strive to continue improving the way we serve our stakeholders. Going forward, the group will continue to actively access potential investment opportunities to drive earnings growth over the medium term. However, given the significant commercial properties pipeline secured in recent years, including the projects of significant scale currently under construction such as Westbun, the capital deployed for the year will be below the average investment per annum of US$2.4 billion over the past six years, i.e. from 2017 to 2022. reference, the group invested an average of $0.7 billion per annum for the five years preceding 2017. The group remains confident that its chosen key markets will continue the benefits

from Asia's importance to the global post-damp pandemic recovery and economic growth and will continue to execute on this strategy of investing in and growing its investment portfolio, primarily in core locations in key gateway cities, while taking an opportunistic approach to replenishing land bank to develop properties for sale to enhance shareholder return. Now that's the end of my presentations. Now it's turned into the Q&A sessions and I'm happy to take questions from the floor or through online. Let me start with the floor, Robert, there's a few questions here. Yes, okay. I think the when you raise the questions, please name your company and your own name And before the question, please

Someone from Jeffrey's two questions if I may first is that with all the changes in the China BP market Would you imagine the contributions from China BP to decrease going forward looking past the booking of Western? And how should we think about the business mix in the future in the longer term future? So that's the first question and the second question is regarding the dividend So what are the conditions for DPS to go up? Should we expect any DPS increase before the net income hits in the 1 billion market gain? OK. Maybe I take the first part of the questions, and I leave it to Craig to take you the second part of the questions. I think in the presentation I mentioned about in the last couple of years, we have invested quite a fair bit in the investment properties. Of course, you understand the characteristics of investment in investment properties. it takes a longer time to have the profits gradually realized. Generally, DEP projects have a very short payback period.

The typical DEP projects, say in China, will be less than two years of payback period. And then some projects, if it is relatively low rise, less than 20 levels, actually from day or acquisitions, we can book the profits and IE complete it within two years. And then whereas higher, higher the level of residential properties of say, 2030 story probably takes three years to recognize the profits. So you will see that with the more investments in investment properties, like the Westbun that we have committed quite a significant investment. We also invested in the Chongqing Luxury Mall and also Su Zhao last year. So these are all exciting developments that really underpin the long-term earnings growth of Hong Kong land. As you know, our main strategy is of course to build up a portfolio of attractive long-term assets, and then we are very much well-positioned or on track into implementing this strategy

and hence have a very solid foundation for long-term growth. So one cannot expect the best of two worlds to exist at the same time. So with less investment in DP, certainly the short term DP business may not have achieved the same level of the contributions as before, especially as I mentioned, last year is actually last year lower DP earnings is primarily due to the conservation of capital back three years ago when we tried to conserve capital for the investment acquisitions. And that's actually directly result or part of the reasons. I would say good part of the reason is actually why the earnings of DP. Of course the market has an impact, but I would say a quite major factor is we slow down the investment in DP three years before. And then I think the going forward, I don't think we are giving up that business. you know, because our execution abilities

has been well proven in China. We got a very strong brand in China now with our increasing presence in the seven cities that we operate. Most of the buyers are now finding that, oh, you know, Hong Kong land is really the provider of high-end properties. So that strong brand is already seeing the benefits, the evidence suggests what, you know, last year when we launched projects in Chengdu or in Wuhan or in Chongqing, our sales level is actually multiple times of the combined sales value of our competitor projects. So you will see that that strong brand value is there. So there is no reason why for us to stop that, but I think we also need to take a measured approach in terms of new advancements. Going forward, as and when, we have near the capital return from both DEP and investment properties. So we will still evaluate where are the more investment properties and if there aren't any immediate opportunities available for us, we will not hesitate to plow that investment

into the DB properties. As we stated, it is more an opportunistic approach in terms of investing in properties. It is a business that would not lock in a lot of our capital in a very long-term manner, but it could enable us to enhance the short-term returns. So it complements very well, so that part of the business will still be with Hong Kong land, but it could have a cyclical also pattern, depends on our investment in the investment properties, also depends of course to market conditions as well. So that's largely I would say sum up our mentality and also going forward where we are. Okay, some three years ago, we have a lower investment level, but we gradually come back, correct? If you look at what we have in 2019, yes, we slowed down, in 2020 we slowed down, so

that's why in impact 2022 to certain extent 2023, but since then we have also ramped up in our DP investment. So you'll find that actually we may be hitting a bit of a cyclical low, but how fast, again, how fast it comes back to improve our earnings in the conclusion sections that I just mentioned, it really depends on the pace of recovery in the China market. And in terms of pace of recovery, I must say in China, our experience in recent weeks, This is the latest experience we have. Certainly we see a rebounce in the order of, compared with the second half of last year. We actually, the DP sales have improved by about what, in the order of 30%. It's not a V-shaped rebounce. We don't expect a V-shaped rebounce anyway. But having 30% increase in the sales level compared with the second half of last year. But still, you are talking about 50% below the level,

average level we achieve in 2021. So it's still well below the 2021 level, but we see quite a good level activities coming through the door. So I'm cautiously optimistic about the market conditions, but things would not change overnight. Then I think this sort of gradual pattern of recovery is what I would expect anyway. So maybe I ask Craig to cover the second part of question about dividends. Yeah, so on the dividends, I think, as I said, our approach here is to maintain our dividend and ideally grow it over time. I think in recent years, clearly, our dividend has been flat, which was a cautious approach that the board has taken recognizing the challenges with COVID. Now that hopefully COVID is behind us in this part of the world and we start to look forward, I think what we're looking at now is really our investment properties portfolio and how

that's looking to evolve over time. The stable income that the IP portfolio produces gives us the ability to look at increasing our dividends over time. So as we look to the Chinese mainland and what we're developing there, particularly with Westbun, there are a number of other projects, we do see a pathway to rising IP income in the years ahead. And therefore, with that increase in stable income, there is the ability for dividends to grow over time. But it really needs to be viewed at what's going on with the group's earnings needs to be looked at in terms of the broader market context. And as I said, we took a cautious approach during COVID. And I think the third point is also around investment opportunities, because of course, we continue to look to grow. So We tried to balance those things, but ultimately our objective is to grow dividends over time. Hopefully that answers your question. Okay, let me, the next questions?

Yeah, okay. Please, yeah. Hi, Carl Choi from Bank of America. First of all, thank you very much for the improved disclosure. Two questions. One is on Hong Kong office. As you mentioned, there's a lot of competition, a lot of supply, not necessarily in Central, also in Kowloon West and also coming up in Admiralty. Hong Kong Land has done a good job locking up your existing tenants for longer, but do you see the need for any other changes in either operating or capital allocation strategies as a result? For example, I think one of your peers, Link, has talked about inviting third party capital into investing in their existing portfolio to free up capital for investments elsewhere for more growth. Would that be something that you consider? And second is on Hong Kong retail, any more color on retail sales recovery in February after the full reopening? And also in your conversations with your luxury tenants, do they expect tourist spending to recover

to pre-COVID levels? And if so, how long do you think it will take? Thanks. Okay, about the office portfolio in Central, in Central, actually it's pretty healthy science of also recovery experience by us. Just to give you some statistics, you know, in January we receive new inquiries you know, in the order of low trending number. So we measure, we track our new inquiries level from time to time. The average requirements for the inquiries in January is just talking about relatively small space, just average per inquiry, mainly 2,000 square feet or below. But in February, we found quite a marked increase in inquiries level, actually 50% increase to

the 30 number levels. And actually, the average size of the inquiries is also markedly improved to average 5,000 square foot per inquiry. So how would you compare with the sort of all-time high sort of, you know, in recent last two, three years, what would be the inquiry level typical? It would be high 30s to 40 level number per month, typically. So the inquiries level, you will find that from this statistics, you will find that. We are about 80% of the sort of normal good level of inquiries in February. So I would say it is quite a rebound, slightly better than I expect. You all know that January we do not expect a very exciting market anyway with Chinese new year and closely following Christmas.

So the inquiry level, we do expect the pattern, or why would people want to look for space in such a holiday season? So that's why they demand that requirements is actually, I want the space within the next few months sort of inquiry. So they really need it, then they come forward to ask for that. Then for the February inquiries, that requirement is not immediate. They are talking about the second half of this year, the last two quarters. Okay, that requirement is last two quarters. So it's a more normal pattern that we will see. So I think we see good signs of a pickup in the inquiry level. Certainly, I won't say that it's all turned into heavy transactions. It takes time, of course, but at least there are signs of a pickup as evidenced by these statistics. Again, I think our portfolio, I'm reasonably optimistic about our portfolio. you mentioned about the active lease management strategy.

Against a market, throughout the course of last year, it's pretty uncertain in many respects, and yet we are able to improve even the occupancy level. Again, the quality of our assets and also our active lease management is also playing a part. And other reasons, evidence that give you, or give me the confidence is at least our top 30 tenants representing again half of our portfolio, none of them is telling us that I want to give you back, not a single tenant come back to tell us that can I give you back some significant space. So if all the top tenants are not talking about contracting that space requirement, what is the message to us? The message is they must take a reasonable, good, medium, long-term view about the business. If they take a very pessimistic view about the business, there must be at least one or

two people telling you that, can I, can you find replacement tenant for me, etc. But none, then that is also a very strong evidence. Now we are waiting for an expected recovery in the market. I think you also noticed that our expiry, then the percentage of expiries of our portfolio this year, or rent revision this year, is relatively low. Total, what, 22% this year? And then we have already dealt with quite a number of them. Now it's dropped to the 16 level, unconcluded. So it's relatively low level of rent revisions and expiry. What does that mean to us as well? That means while we're waiting for the market recovery, we don't have, we have time to wait for a more meaningful recovery and then next year will be more meaningful level. Then we have good briefing space, if you ask me, good briefing space to wait for the recovery of the market.

You mentioned about supply. Yes. really quite a level of supply, especially in the decentralized locations. Otherwise, the land price of Moncockside won't be that interesting. I will use the word interesting for that site. But it's also reflecting the wow is a very strong location for retail, but it invariably indicates a very weak outlook for decentralized locations, I would say. I won't say that decentralized location is nothing to do with us, but again, the Hong Kong position itself as a financial centre, you find that actually most of the demand, even in the last 12-18 months we find that people looking for new space are more talking about intra-central expansions. So it's a reflection of the central positioning for the financial sector. So, if we believe that the financial sector will remain quite stable and actually healthy,

then the central business can't be too wrong, put it this way. Yes, we will be constrained in terms of rapid rental growth, because once you have a quick rental growth, people will start thinking about cheaper locations, which is correct. But you find that when both of the new inquiries are coming from the financial sectors and invariably they prefer central locations rather than other locations, they know that it will be very, very, it's quite a strong cost savings if they move elsewhere. But that is not what they want to position their business. So central, I would say, even the new supply coming in central, but they're just talking about immediate supply is just talk about 3% of the infantry. So it's relatively modest. It's not like the decentralized locations. It's quite a fair bit of supply. We just talk about in central, we just talk about 3% of the new supply.

So I think all in all, I'm reasonably confident about the performance of our portfolio. That's why we conclude that it should be relatively resilient in our performance in the IP assets, but market has dropped, that market has dropped since the peak by some 30%. So we are still in the period of negative reversions, but I won't see these negative reversion trend to be multiple years of durations. I think we already experienced last two years already multiple negative rental reversions in the order of, in the, you know, in terms of negative reversions we talk about in the teens level, you know, low to mid-teens level, you know, negative reversion level. I do expect, you know, this year probably will be in decimal order again and then that should, I think, unless the markets go south.

I do not see this period to be doing much longer after the end of this year, you ask me. Okay. Robert, sorry, just to pick up on the capital point that I think was asked about joint venture partners, et cetera. I mean, I think your question is about Hong Kong, but I'm not going to comment specifically about Hong Kong. Maybe I'll just share generally how we think about our capital. performance of the capital is under regular review and of course we are looking to improve that performance over time. So we've a number of assets our investment properties which generate lower yields but provide good income capital appreciation over the long term. We've got our development properties business which provides a higher yield and faster recycling of capital and then we've got about 12% or a balance sheet currently under development mainly in commercial properties in China and other markets. We always look for opportunities to recycle

capital where it makes sense to do so. So it's under regular review. Joint venture partnering, I think the group has a long history of this quite successfully, actually. The Singapore investment properties portfolio is a very good case in point, but also more recently in China, what we're doing there and much of it's in joint ventures. So we are very open to working with joint venture partners, and we're always looking at our capital base to see how we can improve it. And I think your question about the joint venture or third party capital for our Hong Kong business, I think you're referring to, are we thinking about selling our assets in Central, probably? That's the idea. So I think I want to be very clear. On that point, none of our buildings in Hong Kong is for sale. I don't want to be representing the situation. None of these buildings are for sale. And then this is our backbone. Of course, I don't also want to answer questions like, if one gives you a very attractive price,

what are you going to do? Okay, this is something that I won't, but of course, every management is still deep bound to consider all options, correct? But at the moment, I can say that none of our buildings for sale, obviously when circumstances changes and etcetera, of course, we need to consider all possible options. So just, you know, in order not to create misunderstanding on that front, you know, I just want to be clear on that. Retail sales, you know, that you asked about the question on retail sales. Yes, I think we also see quite a reasonable rebound in retail sales, in the order of, I think, January, we have a teen level of double digit growth in our retail sales. But in the absence of the visitor arrivals, especially from mainland, was rather limited in January. It's just representing probably 5% of the peak level

of tourists from China. the visitor arrival number, if you look at those from China. So hasn't really come back.

So it's more local demand, but sentiment has improved. But it's also holiday seasons. A lot of people has gone overseas for holidays. So that has also constrained the improvements in the retail sales. And then we are expecting, when tourists gradually come back, visible, I'm sure when we see some of the statistics for February, we must be experiencing some good uptake in the truest arrival, which in a sense will also improve our retail sales level. I think the pre-COVID level, our tenants retail sales for the central retail portfolio, We are talking about what, about $10 billion to $12 billion Hong Kong dollars total per year. Last year we are talking about $8 billion, so give you an idea. In absence of tourists, we are still talking about roughly 30% lower.

customer mix, central portfolio January 50-50, but the mainland tourist or tourist demand as well as local demand, the local demand has certainly caught up some of the sales left by the tourist level. So I think going forward, I think with the tourist rifle coming through, we are seeing interesting performance. Actually, we are not just passively relying on tourist arrival to save us. No. I think it's actually the local market, and then our offering is quite a strong appeal to local customers. So that's why we have stepped up the customer service side and collaboration side with the tenants. We created a new team with the new appointment

of Chief Customer Officer appointed about a year ago. Why would we need Chief Customer Officer exactly? We think that customer experience and tenants collaborations, we are seeing very exciting developments. We have the first collaboration with a cluster of tenants in October last year and then you know the one of the weekends then we launched the sales for the high tier customers. We achieved the highest number of sales level for that tier of the high tier of customers. Just simply an ordinary weekend in October through customer tenants collaborations and offering some unique experience to customers. You find that we can can turn very interesting. That weekend results is even better than Christmas sales results. So to give you an idea, I think this is how we see ourselves that we are not passively

looking for people coming through our door. We should actively go and engage and provide interesting experience to our customers. And then I think the February, already we have also got very, very interesting results through very strong tenants collaborations. And then I'm hopeful that, I do hope that I'm hopeful that we should be returning to the tenant sales level. I would be very disappointed if we do not have the same the pre-COVID levels or at least recoup the previous level of retail sales for our central portfolio for this year. I would be rather disappointed. But anyway, we will work hard in order to achieve that result. And then I think the all-for environment seems to suggest that we have a good chance to do

so. All right. All right, yes, please. I try to take three questions from the floor and then three questions from online, just to be fair to all the interested parties, yes. Thank you, this is Raymond from HSBC. I got two questions. The first question actually is about buy, not for the selling properties in Hong Kong. So the land price in Hong Kong has adjusted as reset in terms of pricing, just to mention like Mokasa is getting very interesting. So does management think the pricing in Hong Kong is getting more attractive from the risk-reward perspective? So you deploy more capital in terms of investment in Hong Kong versus other regions in Asia like China? This is the first question. And the second question is about capital management. Congratulations for acquiring several prime sites last year. So with the growing land banking opportunities in the market, Would management consider to deploy more capital to land purchase instead of the share buyback

in the coming 12 months time? Thank you. Okay, I leave again, I leave the second part of the question to create. I will just come on to the Hong Kong. Basically, are we looking at opportunities in Hong Kong? Well, I think from time to time, we haven't stopped look at Hong Kong opportunities. I would say, we never stop that. We just find that in the other places seems to suggest a more interesting upside for us. And also, we have already quite a large asset base in Hong Kong. Any uptake for you to invest in Hong Kong, you certainly invest into the future of Hong Kong, prospect, etc. We already have quite a large portfolio in Hong Kong. So that's a natural also tendency to think about, okay, are we, you know, the, with the balance sheet, why are we still talking about, you know, the talking about almost 70% of our assets still concentrated in Hong Kong.

Do we really want to concentrate too much in one location? I think this is always a question, you know, for, for us to think about. I think we have significant exposure in Hong Kong. That's why it has to be very, very compelling for us to think about. And then the, that is about IP access, residential access. I don't think Hong Kong residential access has got a payback period of less than two years anyway. So I think the, and hence I think the residential access, you know, could lock up your capital for quite a relatively long period of time, or relatively compare, you know, compare with our opportunities in China. So when I talk about you need to have a very agile strategy to invest in both short term and long term. Short term is hopefully very short term that you can turn around very quickly so that you can react to good opportunities without locking in capitals, but you don't want to have Lido capital for too long.

So that's why a market that offer you very, very good payback period would be more interesting. So I think the, all in all, yeah, we have not ruled out the Hong Kong as a market, but there is a general preference towards outside Hong Kong. And our track record over the probably last 10 years suggests that 90% of investment is in China. So we certainly are believers in China market. And then I think it serves as well, both in terms of DP and for simple future. I think the IPS sets will be an interesting earnings driver of our business going forward. Buying opportunities versus share buyback, great. Yeah, again, it's back to our capital allocation principles. So I think we said before that our first priority is to invest for growth, then it's dividends, then it's shared buyback. So I think in terms of how we think about the shared buyback, it's an investment for the

benefit of shareholders clearly. And of course it's a function of where the share price is at any given point in time. But I think it's right to say that given the current landscape in China, current market conditions reduce competitive environment, we are starting to see potentially some attractive opportunities there with high returns. So I think it's something that we will be looking at in terms of overall capital allocation and what's the highest and best return, recognizing the different risk associated with both the buyback and investing for development projects. So it's under regular review basically. Okay, I think let's turn to the questions through online. The first question is from CGS CI MB Securities, Raymond Cheng. Two part of the question, the first part is apart from CFI, which Chinese developers Hong Kong Land has project

co-developed with will Hong Kong land consider buying remaining state from its Chinese peers? You notice that we have done two deals last year acquiring the interest from our partners. In general, you know, a pure residential opportunities, the scope for acquisition is rather limited anyway, because almost all of our residential sites are well-located, et cetera. For residential developments to really perform very badly, to the extent that the partners really want to quit and then try to realize the capital, less opportunities for pure residential properties, because in itself, it could be liquidated fairly quickly anyway. So it's only projects with large or meaningful mixed use or commercial components that requires longer year of capital commitments and longer years

of payback that the partners will find that, you know, can I realize the assets? Do we have a lot of these mixed-use developments cooperative with local developers? Yes, we do have. But you know, we generally strong, you would expect strong players, you know, why would they be bothered to sell an interest to you at a heavy discount, you know, when they have the holding power. Most of our, the main partners that we are having in China, you know, are people like what, you know, the China merchants, you know, I would say number one partners in terms of number of joint venture we have, the who would be on the line. Second to that, it would be Longfall. Longfall will also be our partners. Who else, you know, that cooperate with us on some mixed-use developments, Wanki, China resources. So by the names that I have just quoted, why are they motivated to cut a deal with you

at heavy discount? So I would not think that these will become the features of our acquisitions. At least for the time being, I can say that I'm not close to any negotiations with our partners to acquire any of their assets. But likewise, we will not rule out any opportunities, but I will be amazed that it becomes a feature of our acquisitions going forward.

I will skip some questions that, I will not mention the name and also the question, because if it's really a similar, then I will probably save time and not mention that at all. So don't feel bad if I don't quote your questions, but I may have already answered your questions through answering the questions of other parties.

All right, and that one is from Goldman Sachs. Simon Cheung, can you share with us any contracted sales target you may have in China residential properties this year? And also, the second part of the question is why has the capital deployment for share buyback been much slower in recent months, even though share price have generally been more depressed. I think in the first part of the question, we generally do not disclose our sales target, but I would be certainly the level, I would hope that to be higher than last year. We actually be on track to achieve the better contractor sales than last year. The second part of the question, Craig, do you want to answer that? Yeah, I think this is a continuation of a similar theme to what we were just discussing in terms of other opportunities. So the shared buyback, we have been investing at a slower pace in recent months. And I think that's us really just trying to scan the market to see what opportunities there may be for new investments, given the sort of significant impact there's been on the mainland in the last six to 12 months.

So I would also note that the buyback's in place until the end of this year. So we were never going to invest all of the buyback quickly. It's not our intention to move the shared price up through our buying. So it's a measured approach on the shared buyback whilst looking for opportunities to invest. All right. The next question is from Macquarie. Soo-tai-tua. First of all, you have rental reversion guidance being negative. Can you talk about which sub-segments these are? How does Singapore grade A fit into this given type supply this year?

Let me answer this question first before I go on to the second part of the questions. The negative reversion I just talked about is Hong Kong. In the last two years, the negative reversion is in the teens level, basically adjusting to the market fall. And that comment is not applicable to the Singapore market. Actually, we experienced positive rental reversion in Singapore. And I should expect, last year we are talking about single digit, high single digits of positive rental reversion in Singapore. Going forward in the next, I would say again, care fit myself that everything's being equal. The market is not no surprises in the market. I do expect the rental reversion in the Singapore portfolio will be in a double digit region in probably the next two years. Again, this is based on current market conditions,

current rental versus our current lease commitments, et cetera. That should be what we expect.

The market in Singapore, I think I've covered the Hong Kong part in terms of the negative range of version, I'm not going to repeat that. Singapore, a very healthy supply and demand dynamics, even though recently the tech segments, of course the global tech segments is under pressure and the demand certainly have a visible slowdown in Singapore. They have been the main demand driver in, I would say, say the last two years, they really are the main group of companies taking additional space in Singapore, but that has certainly slowed down. And hence, that would only, would that really reverse the trend of the market that it remains the healthy and etc. I don't think that would reverse the trend. still the market rent have moved up versus a couple of years ago. So it will still be

positive rental reversions. This is probably the extent of positive rental reversions may slow a bit. But again, when I say single digit rental reversions, positive rental reversions, and then going forward teens level, it's just whether we will enjoy high teens or mid-teens or low teens, the sort of magnitude, rather than completely reverse the rental reversion trend, it will be going to negative. That will be quite a severe change in environment before that would happen, if you ask me. The second part of the question is on land banking in Singapore, what is the strategy here given either with partnerships and high land costs from bias, stamp duty? Actually, the cooling measures in Singapore, I would say, is well implemented, not aimed at destroying market confidence, but try to tempt the heat of the market.

So I would say it's implemented in a very considered and also measured manner with, I think, with good effects. You look at the transaction level in Singapore last year, you're talking about some 7,000 new units get sold in the market versus 10,000 units the year before. So it's the absorption rates have moderated as a result of cooling measures. Of course, another factor is the lower level of supply also reduce the absorption rate. But they all in all is still healthy. So our strategy of land banking, residential, we're still interested in acquiring residential site. The given of all my years of what last 20 years of involved myself in the Singapore market, one of the better years I would say last year in terms of sales, it's not a common phenomenon that you can presale 100%

within weeks of launching the project. So I think it's appropriate for the single government to have some cooling measures. So I think the old farm market, I think it will still be very healthy. And hence, we are interested in that. But residential, like many markets, is a very cyclical in nature as well. Policy risk, the economics, trends, cycles, all these come into play. So we will still take a very measured approach in terms of bidding, having experience in ups and downs in Singapore, I think we got the experience of defining the right level of participation from time to time. Okay, back to the floor. Privy, yeah. Thank you Robert, thank you Craig, great presentation. One question literally, the interest rate environment

has changed when you started buying back shares, at that time interest rate was very different. So the real question is your average cost of debt being 3.3%, tomorrow if you go to bank or bonds, that's very different, definitely higher. Is it smarter today to just scrap your buyback program in the new world and preserve capital so you don't have to pay a lot of interest expense and use that for again land acquisitions and all those usual activities or the numbers that you are looking at is still favors buyback. I think if I did, I'll get this question. You're absolutely right, the interest rate environment's gone up. The impacts on us has not been felt that significantly yet because of the fixed rate debt. But our floating rate debt, of course, has gone up. And we have factored that into how we think about our cost of capital. So they're broadly speaking, there's probably a 2%

to 3% increase in the cost of our capital compared to what it was maybe say 12 months ago. So we do acknowledge that. I think on the buyback, if I look at the share price today with our current earnings, it's about a yield of about seven high sevens percentage wise. So if you take a view on the current yield and our views on future growth and earnings, I think the buyback even with the higher interest rate still broadly holds. I think your point around preserving capital to invest in higher returning opportunities. We've already had a question from that. So I think we, again, we are focused on that. So it's not as sort of singular as just doing the math. It's more a triangulation of what we're looking at. But I think at the current share price level and with our current earnings, the buyback still makes sense at this point in time. Yes. Hi, Alistair Huffleff, I'm an investor.

Any time that you're with a giant in-house? Yes, thank you. Just a quick question. Welcome back. I'll follow up on that one. Some of your low coupon bonds are trading around 80 cents or 75 cents because of the interest rates have gone up so much. So actually maybe buying shares is great and we encourage that, but would you also like to buy about your bonds because you can redeem your debt below par, actually reduce debt quite dramatically and also not pay coupon interest either? Yep, yep, good point. And yes, we are looking at and continue to look at opportunities like that. I mean, the ability to buy back a bond, the course is a bit more involved in terms of the process, but it's something that we're aware of. Okay, anyone from the floor before I turn to the question online? All right. Do you want to take the, there's a question about also from Macquarie, I think we've answered it.

Yeah, I think we answered that. Why don't I take this one on shared buyback from Sarah, Sarah Cooper, Bank of America, she's just asking us to remind everybody on the share accretion impacts from the buyback so far in terms of earnings per share and net asset value. Based on what we've invested today, we've reduced our share capital by about 4.8%. So the benefits on earnings and NEV is that number. Okay, you seem so keen to talk to me face to face direct, you know, not raising more questions, you know, both online or on the floor. So at one's last chance, anyone wants to raise any questions, otherwise, you know, thanks for joining us today and look forward to see you regularly in future not being online. Okay, right, thanks, thanks a lot.