2024 Results Presentation

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.

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

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,

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

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

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%

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

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.