2025 Annual Results Presentation

Good morning, everyone. It's great to see so many familiar faces on a Friday morning. A very warm welcome to you all and for those of you who are joining us online. I'm Michael Smith, the Group Chief Executive of Hong Kong Land, and with me today is Craig Beatty, our Chief Financial Officer. I remember I recalled this time last year when we were at our 2024 results presentation. Our strategic vision, 2035, was barely a a few months old. And I recall being very, very thankful to the many of you who endorsed Hong Kong Land's new direction and gave me and the management team the benefit of the doubt. And that wore heavily on me and on the whole management team. So over the past year, we've been relentless on our execution and delivering on the initiatives aligned with the core tenants of our new strategy. Whether that be capital recycling events, new openings, and milestones at our ultra premium integrated commercial property portfolio, or establishing our inaugural private real estate fund.

Now let me talk you through some of the details of what I just outlined, as well as Craig and I going through our financial results for 2025. We have plenty of time for questions. For those of you watching via the webcast, please send us your questions through the website, I will include them in the Q&A session. So here's the structure for today's presentation, and let's start with stated, all numbers quoted in US dollar will be in dollars. Let's get started. Turning first to key developments over the past 12 to 18 months. It's been a very, very active period for Hong Kong land. I don't think anybody can accuse us of being in a complacent management team. If you look at the list of initiatives and achievements we've done this year the last 12 months, it's been pretty formidable. Following the launch of our Strategic Vision 2035, we focus on our most pressing priority. Now recall one of these briefings, somebody asked me what is the most, the three most important objectives. And it was capital recycling, capital recycling, capital recycling.

And we've done that both from our bill to sell portfolios, where we have ceased incremental investment and selectively recycling from our prime investment properties book. In April, we announced the first major transaction with the sale of parts of one exchange square to the Hong Kong Stock Exchange for $810 million. validating the NAV of the central portfolio. In August, we completed a landmark leasing deal at Westbourne Central with Adidas committing to over 32,000 square meters in a whole building of 18 floors as their Greater China Headquarters, one of the largest leasing deals in Shanghai for many years. As we exit from the Build to Sell segment, we also restructured our China operations to streamline governance and centralized decision making. We expect annual cost savings to reach around $50 million by 2028 with this initiative. In September, we achieved an orderly exit from our build to sell operations in Singapore and Malaysia through the disposal of MCO land for over $650 million, again at NAV, at book value.

Also in September, we opened our 50% owned JLC Mall in the heart of the Nanjing CBD at its grand opening. In December, we announced the initial phase of the tomorrow's central transformation, including the opening of new flagship stores from leading global luxury brands. And finally, in early 26, we completed the launch of our inaugural private real estate fund SC-Pref. This involved the disposal of our one-third stake in NBFC Tower 3, alongside ceding our remaining Singapore portfolio and adding Asia Square Tower 1 to reach an initial AUM of $8.2 billion. For a first fund, it's quite an impressive achievement. All transactions highlighted on this slide were completed at or above NAV. I'm going to repeat that a number of times, but all of these divestments were done at or above NAV, reflecting strong endorsement from buyers and global institutional capital. Turning next to an update on the group's strategic pivot. On portfolio recycling, net

proceeds reached $3.6 billion. This represents 90% of the $4 billion minimum target we set ourselves for 2027. So I think we surprised ourselves and the market in terms of the pace that we managed to achieve in our recycling efforts. These disposals crystallized independent valuations and validated the book values of our prime assets. The seeding of our Singapore prime portfolio into SC-Pref at NAV further illustrates the endorsement of prime property valuations by institutional third-party capital. These are incredibly credentialized investors, APG, QAA, endorsing the NAV of our assets. On capital management, consolidated net debt declined by 30% to $3.6 billion. It's since reduced further to around $3 billion following the formation of SC-Prefs, or in single digit gearing now. We also increased bull year dividend by 9% to 25 cents per share,

in line with our commitment to progressively increase dividend per share towards 44 cents by 2035, so a 2 cent increase in our dividend. In parallel, we continue to allocate up to 20% of recycled capital to share buybacks with over $340 million invested to date, reducing share capital by approximately 2.5%. On third-party capital, we successfully launched SC-PREF, now the largest commercial real estate private fund in Singapore. The fund establishes new recurring fee income streams and again represents strong validation of Hong Kong land's asset management capabilities by global institutional capital. Across our ultra-premium gateway assets, Hong Kong office committed vacancy tied into 6%. I recall when it was double digit, with indicators pointing to recovery in the prime central market. New flagship retail leases are progressively becoming effective, supporting rent and asset

value growth, while Westbourne Central continues to attract premium tenants as development progresses. We also remain focused on assessing new UPICP opportunities across Asia's gateway cities. Finally, on operational excellence, following the restructuring of our China Build to Sell portfolio, we continue to enhance our operating model and cost discipline to support delivery of our strategic vision 2035. On sustainability, we retained our global sector leader position and five-star Gresby rating, and in line with our fund management ambitions, we have committed to the principles of responsible investment. Briefly going through where we are in terms of our capital recycling efforts, which I'm very proud of, The group has committed to recycling up to $10 billion in its 10-year strategy, but we front-loaded our efforts during the initial phase of execution with an initial target of $4 to $6 billion by the end of 2027. Including capital recycled from the establishment of SC-PREF last month,

which was $1.3 billion, so that's $1.3 billion of capital was taken out of the formation of that fund. We've now reached 90% of our minimum 2027 target. For reference, the aggregate capital recycled from our builder sales segment amounted to $1.4 billion, while net proceeds from Prime Property's book amounted to $2.2 billion. These are net proceeds, so this is after any gearing attached to the assets. In line with our previous guidance, at least 80% of capital recycled is allocated towards growth investments, growing our earnings, with up to 20% allocated to buybacks. Turning now to an introduction of SC-Pref, I think some of you were at the briefing last month, but just to reiterate, it's an initial AUM of $8.2 billion Singapore dollars, approximately $6.4 billion US dollars, again from the first inaugural maiden fund of a group starting with a fund of that size is quite an achievement. The fund has a committed equity of $4.1 billion Singapore dollars, or $3.2 billion US, with over $1.8 billion

Singapore dollars of third party capital. Again, in our first fund to start with $8.2 dollars of assets and 1.8 billion dollars of third party capital is an achievement and it endorses the value of the assets contributed to the fund. The C portfolio has an attributable net-leasable area of 2.6 million square feet or 4.6 million square feet on a 100% basis. This is effectively bigger than our Hong Kong central portfolio. Committed occupancy is 96% and has a healthy weighted average lease expiry of 3.2 years. As you see on this slide, we have ambitions to grow the AUM of this fund to over $15 billion within five years. For those of you who know me, my ambition is to do that a lot quicker than that and beyond. With a targeted IRR of about 8%, we have amongst the lowest cost of capital in the market to execute our growth plans, and we have some of the most credentialized real estate in the world supporting us. There's no redemption for the first five years. We have their commitment to deploy more capital.