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.

We have a queue formed of new investors who would like to also join us. We have a market where the supply-demand fundamentals for office in Singapore are very, very strong. We also have the fortuitousness of a number of assets coming to the market, which haven't been marketed for many, many years. The combination of all of that really provides a recipe for us to be able to grow this fund and grow the fund management fees, which are really, really important to us. First I wanted to show you briefly some highlights on work being done to enhance our central portfolio. All of you in the room would have seen all of the work that's been going on over the last couple of years since we announced, including some very early indications on returns on investment. Firstly, on tomorrow's central, during this period of partial closures, Landmark continues to be underpinned by our loyal, bespoke members who increased their year-on-year spending by 8%. We have had a number of very exciting openings, including Scarparelli, which has opened its first store in Asia at the landmark and is doing incredibly well.

But I'd like to take a minute to talk about the remaining four other new stores on this slide, Prada, St Laurent, Petit Philippe and MooMoo, all of which opened in December last year to catch the festive season. The early returns on these four tenants alone have been very, very strong. Their new stores versus their last stores, they're up 70% since December 2024. And again, despite over 30% of area remaining closed for renovations, Landmark had a spectacularly positive holiday season, with November and December absolute tenant sales up 13% year in year. In some respects, I think it's a trickle up. People have made money through the stock market, the capital markets have been very strong, people now feel confident to go out and spend. November and December are amongst our strongest performance we've ever had in the Landmark. These are early indications but strong initial performance of these new stores validates Landmark's strategy of focusing on the ultra high net worth segment as well as working with brands to create large flagships, real experience where experience is central.

Turning to our placemaking efforts in Central, which forms part of Hong Kong Land's strategy of living up to the ideal that experience is central, another one of the slogans beside GPICP, Strategic Vision 2035, experience is central. Winter Wonderland in Central marked Hong Kong Land's first flagship outdoor winter placemaking activation delivered in partnership with the Hong Kong Tourism Board. The event was a step up from the comparable 2024 events, attracting significantly more visits and social media mentions. For those of you who attended, it was incredibly busy and we plan to do it even bigger and better this year. Tenant feedback was highly positive, noting that the activation supported stronger retail momentum during the festive period. Moving on to an update on Westbourne Central, where the team is hard at work delivering on Phase 2 of this project. Westbourne Central Residences, so this is a service department brand that Hong Kong Land manages, again another fee revenue for us, continues to be well received, with Phase

1 being 96% occupied and Phase 2, which only opened in the fourth quarter of last year, is now 55% occupied. The office component marked a number of milestones, with both Lulu Lemon and Sono Farm having moved in. Adidas' new Greater China headquarters is currently being fitted out with completion expected by mid-26. Post completion of this group of officers, we expect the number of office workers commuting to the development to exceed 2,000 just from this group. Finally, the 27,000 square metres retail component with a contemporary fashion and lifestyle positioning is well on track with pre-leasing commitments of over 75%. So the offering will have about 70 designer and lifestyle brands. Adidats and Lululemon, her office tenants, will also have flagship stores. Tenant fit-outs are in progress with initial openings of May of this year and full opening by the third quarter. And we're not stopping there. So the group continues to make progress in executing

on its pipeline of projects in the Chinese mainland. We don't want to be in every city. We want to be in the best cities where we think we have the most impact, one of those being Sucho. Sucho Central have around 67,000 square meters of retail space overlooking Jinji Lake. The retail component will be anchored by the largest global luxury brands, many of those that you see in our central portfolio. A vast majority of whom have already committed to the project, so pre-leasing now exceeds 50%, even though we're more than 12 months away from opening. The project will also feature a very, very lovely 140 key Mandarin Oriental Hotel that That will also open in April 27 and sits right on the lake where the sunset's over. It's going to be brilliant and highly recommend you visiting when we open. In line with the group Strategic Vision 2035, we continue to refine our approach to enhance operating models and to manage costs. Obviously, as we are divesting assets and recycling capital, earnings does suffer. So trying to ensure that we have an operating model that gives us an opportunity to manage

our cost base is very important. The group has initiated a streamlining of its operations by implementing a portfolio-led operating model with the name of delivering platform-ready operating and financial performance. This includes three key organizational changes. Firstly, instituting a portfolio-based leadership to enhance accountability, so people who basically own and are accountable for a cluster of assets. Secondly, refining corporate functions and operational centers of excellence to drive standards, consistency and the discipline growth. And thirdly, ensuring a refresh management committee which provides the appropriate centralized oversight. So this sort of organisational enhancement really is an outcome of what we announced back in October. It's a steady progression when we've seen what Stewart Grant has done in Westbund, what Payting has done with our fund, it just became obvious that we need to have sort of centralized focused attention on clusters of assets. The objective for this change is to ensure end-to-end accountability for returns,

improve capital allocation and risk discipline, enable faster and more consistent execution at SCAL and deliver platform-ready asset performance. Turning over to a brief introduction of the refreshed leadership team, the Management Committee will be chaired by myself with the portfolio leaders reporting directly to me. These portfolio Other leaders include Alvin Kong, who's already part of our management team, had a long career at Swire Properties before joining us. He will now take on the responsibility for leading our China integrated properties portfolio. So our Ring series, our properties in Sucho Chongqing, Beijing in the Central Series, but also he will be in charge of recycling capital from our bill to sell assets. Next is Graham Torrey, who some of you may know. He has rejoined Hong Kong Land. I first met him back in the 90s, he was at Hong Kong Land. He now brings with him three decades of leadership experience in real estate and investment management across Asia Pacific, including most recently leading APG asset management's Asia Pacific

business. So he will be accountable and responsible for the whole Hong Kong central portfolio. Next up is Pei Ting, who had joined us prior to the formation of SC Prep. She is the chief executive of that fund and will continue to manage and grow the AUM of what is already the largest commercial private real estate fund in Singapore. And finally, as I mentioned, Stuart Grant, who stepped down from our board, relocated his family from the UK to Shanghai, and he'll continue to lead the execution of Westbourne Central. He's really galvanized that team and our relationships with our partners as it's one of the largest mixed use commercial projects under development in the region. So therefore requires somebody of his statue and experience to have direct accountability and oversight of that project. So now I'll pass it over to Craig to walk through our 2025 results. Thanks Michael, good morning everyone. Before we dive into the numbers I want to spend a little bit of time to set the scene by highlighting some changes that we've made in the way that we report which we believe

better aligns with the priorities we've outlined in our strategic vision 2035, specifically the decision to wind down the Build to Sell segment. And so by making these changes, our aim is to provide a clearer understanding of the group's underlying performance related to its principal operations. So there are two changes that we've made. First assets are immediately available for sale. For example, residential inventory within the bill to sell portfolio have been reclassified into non-trading items. And secondly, recurring income generating assets that were previously held within the bill to sell portfolio, which historically we had referred to as medium term lease assets. These are primarily retail malls in China under the Ring brand name. We reallocated those assets into our Prime Properties investment segment. These assets were historically carried at their development capitalized cost.

They were fair valued by independent valuers at the end of the year. to our Prime Properties investment portfolio going forward, they will be marked to market every six months. So basically by making this change, the group's underlying earnings now solely focus on Prime Property commercial income and fund management fees as we build that stream in the coming years. And so as I said, the reason we've made this change is to provide all of you with a clearer understanding of our underlying performance. And we've also restated the 2024 numbers to give you a clearer ability to compare year-on-year performance. If you want any more detail on this change, I refer you to note one of the financial statements that was released last night. So let's get into the results for the year overall. All monetary amounts are in US dollars unless otherwise stated. So profit to shareholders was 1.2 billion, a significant turnaround compared to a loss of 1.4 billion in the prior year.

And this movement was primarily driven by an increase in the independent valuations of our portfolio, including an increase in the valuation of the Hong Kong Central Portfolio, which is actually the first time we've had an increase in the value of the portfolio since 2019, when rents began to fall in Hong Kong. The group's underlying profit on the new basis was $458 million down 8% from the prior year, primarily due to lower rental contributions in Hong Kong. An adjusted free cash flow amounted to $810 million in the year, or just over $0.37 per share. I will elaborate further on this metric in a subsequent slide, but what this tells us is despite lower profits from the Build to Sell segment as we wind it down over time, the cash contributions that we are benefiting from as we recycle capital continues to be quite significant. Assets under management post formation of the Singapore fund, SC Prep

reached $58 billion and the net asset value per share stood at $14.30 at the end of 2025, up 5% compared to the end of 2024. Net debt declined significantly by $1.5 billion to 3.6 billion and in fact as Michael mentioned it's fallen further in the early part of this year down to 3 billion as we had significant cash inflows from capital recycling initiatives throughout last year. And in recognition of the strong cash generation the board has declared a final dividend of 19 cents per share bringing the full year dividend per share to 25 cents a 2 cent increase compared to 2024. Operating profits from prime properties investments decreased by 81 million year on year, primarily due to negative rent reversions for Hong Kong office, as well as temporary impacts from the retail renovation and landmark. Contributions from Singapore were higher

due to positive rent reversions, and there were lower contributions from other regions, primarily due to ongoing renovations at our mall in Macau, as well as temporary pre-opening costs in China as we start to open a number of new projects there in the coming years. Net financing charges were lowered by $33 million year on year, primarily due to a lower average borrowing rate, and taxes were lowered due to lower profits. In line with the Group Strategic Vision 2035, the return of capital for the Build to Sell segment continues to be a big priority for us. Whilst, as I said, profit contributions from this segment will naturally reduce as we're no longer investing in the segment, there's cash that we are taking back as we sell inventory and of course the benefit of that you will see through the reduction in our net deadline. So as a result we're very focused on the adjusted free cash flow metric which does include maintenance capex on our prime properties portfolio primarily

in Hong Kong as well as the cash we get back from the bill to sell segment winding down and in total that was 810 million in 2025. This metric does not include major capital recycling initiatives. So the things that we did last year, the sale of some floors from one exchange square to the stock exchange, the sale of MCL land and the sale of MBFC tower 3, the cash proceeds from that are not in this metric. The purpose of this metric is to give you a clearer understanding of our operating flows. In 2025 the net revaluation gain was 890 million dollars, primarily driven by an increase in market rents for the landmark retail. So as As tomorrow's central continues on its renovation and the positive reversions that we're seeing from the portfolio, there was a good uplift in the independent valuation of that particular asset. Plus, there was benefits in both Singapore and Westbond, where the rental outlook in both

markets improved compared to the prior year. Other non-trading items in the year included $247 million of revaluation gain from the classification of our medium-term lease assets, the ring assets I mentioned, from bill to sell to prime properties. As I said, these assets had previously been held at their capitalized cost in the past. Losses from the bill to sell business were a net 245 million dollars which included a non-cash provision of 371 million dollars on Chinese mainland assets and as we continue to prioritize the recycling of capital and the wind down of inventory, we are looking at the sales price of our assets in a very difficult market and we took the decision to mark down on a selective basis some of the sales prices on our assets to really benefit sales. Net asset value per share at 31st December was $14.30 up 73 cents or 5% compared to the end of

2024 driven by the valuation gains in our portfolio as I mentioned and there There was also positive contributions from the business which was partially offset by the non-cash provisions in China as I mentioned. The group invested just under 280 million US dollars in shared buybacks during the year resulting in an accretive impact to NEV. Net exchange translation differences mainly relate to assets on the Chinese mainland and Singapore which had a higher value due to strengthening of the renminbi in Singapore dollar. As we report in our reporting currencies US dollars obviously we translate foreign assets into US dollars and these currencies strengthen throughout the year. Let's turn to an update on dividends and shared buyback and as I mentioned we've declared a higher dividend up 12% from the prior year, full year dividend now 25 cents and the growth in dividend is in line with our long-term target to double dividends per share

by 2035. Our objective is to go from 22 cents to 44. So obviously at 25 we still got ambition to grow that a lot further. As I mentioned, strong cash flows from both Prime Properties investment and the unwinding of the Build to Sell segment provide support for the dividend through our strategic transformation. Over the longer term we remain committed to paying a dividend payout ratio in the region of 80% of underlying earnings per share. In the next few years, as we wind down the build to sell segment and ramp up our business, particularly in China, as new projects complete and Hong Kong starts to come back, we're anticipating some good growth and earnings looking forward. On the buyback, as you're aware, we announced three separate tranches to the buyback program as we recycled capital and as Michael mentioned, up to 20% of recycled capital is being allocated to buyback. So

a total of $650 million has been announced of which $340 million has been invested as we sit here today. And total capital return to shareholders, which includes the buyback plus the dividend paid, amounted to over $780 million in 2025. The buyback, as we've previously guided of course remains in place and the pace of that is driven by market conditions as well as new investment opportunities that we see on the horizon. Touching now a little bit on Treasury, the maturity profile of the group's debt is shown on the left-hand side of this slide. The debt maturities are staggered over a number of years and are well diversified between both banks and debt capital markets and the group remains well financed with strong liquidity and no significant financing needs in 2026. The average tenor of our drawn debt at the end of December was healthy at 5.8 years and the average interest cost further decreased to 3.3% down from 3.6% at the end of 2024,

driven by lower average interest cost primarily in Rem and Bey and 59% of the group's average gross debt was at fixed rates. At the end of December, the group had available liquidity of 3.5 billion compared to 3 billion at the end of 2024, reflecting quite significant additional investment capacity. So as we've guided previously, we've been very focused on recycling capital and now we feel we have a strong balance sheet with capacity to seek new growth opportunities. And our credit ratings by both S&P and Moody's were unchanged at A and A3 respectively. Let me turn now to an overview of the group's rental income and operational updates on our key segments. Overall, rental income was solid. It was down by only 2%, mainly due to a 7% decline in contributions from Hong Kong office due to negative rent reversions. However, leasing and mementing for the portfolio improved in the second half of the year.

Income from Hong Kong retail was temporarily impacted by the ongoing renovation works and landmark and this was partially offset by positive rent reversions in retail from a number of the new Maison stores that have opened. These rental declines were partially offset by higher rental income from Singapore and the Chinese mainland. Turning to a leasing and operational update on a key portfolios, average net rents were 94 Hong Kong dollars per square foot per month. Vacancy on a committed basis declined to 6% compared to 7.1% at the end of the year, I think a very solid performance and for reference compared to the market overall, Hong Kong Central Grade A office vacancy the end of last year was 11%. Our overall whale, weighted average lease expiry, stood at 3.6 years for the portfolio whilst the whale for our top 30 tenants who occupy close to half of our space in Central was 4.7 years and at the end of December,

13% of the portfolio is subject to exploration in 2026. In retail, as we said, a positive performance, average retail rents increased by 12% to $236 per square foot due to positive rental reversions. Our rental income per square foot basis has really recovered from the immediate impacts post COVID. So I think this is a particular bright spot for Hong Kong land. And when you think that over 30% of the lettable area was temporarily out of action for renovation, I think this shows really how strong the mall performance was. And the remaining 70% in action was fully let in the period. The whale at the end of December was 5.4 years, up significantly from 1.8 years. As we were positioning for tomorrow's central renovation, we were letting existing leases wind down. But of course, we've now entered into some very long-term leases with Key Anchor Tenants,

which is reflective of their long-term commitment to Landmark, to Hong Kong Land, and of course to Hong Kong overall. What they are creating here is some of the world's biggest and best stores. So I think the whale, you should expect to see the whale continue to move up in the next couple of years as we continue to enter into other long-term leases with other brands. And I think as Michael mentioned, on the tenant sales performance, there were a couple key points to note. The ultra high net worth segment which is a core part of the customer base at Landmark was incredibly strong last year with our top tier customer spend increasing 8% compared to 2024 demonstrating the resilience of this customer group. And overall tenant sales of Landmark despite the renovation impacts was only down by 5% which is a phenomenal impact considering the sort of temporary impact of the renovation overall.

Singapore was also a very bright spot, and please note the performances on the slide here were prior to the formation of SC-Pref, the fund which was formally created in February of this year. The office portfolio continued to perform very well, driven by a flight to quality demand and no new grade A office supply in the Arena Bay CBD. Rents continued to show steady growth. Average gross rent across the portfolio last year was 11.5 Singapore dollars per square foot, an increase of 4% year on year and positive rental reversions were achieved and committed occupancy was up, was at 97% overall. Positive reversions were actually up 12% which is quite significant. On my hand over to Michael for a market update. Thanks Craig. Let's look first at the Hong Kong office market. There was strong net positive absorption in 2025 with spot rent seeing mild growth which has been well articulated by the brokers.

– flight to quality has resulted in a divergent market, even amongst different segments of grade A stock in Central, with trophy or ultra-premium assets continuing to be net beneficiaries. The well-publicised recovery of IPO activity in Hong Kong is not showing any signs of slowing down, with net proceeds raised in January this year alone reaching $3.7 billion. Finally, new supply of office space in Central only makes up 7% of total office space, largely accounted for. Beyond these, there is no new office supply in Central into the launch of Central Yards Phase 2 in 2032. So the supply-demand dynamics, particularly of the Ultra Premium, very high-quality office, which our portfolio is part of, is very, very, very good. Moving on to luxury retail, where we continue to see strength at the landmark due to steady growth of ultra-high net worth luxury spend in Hong Kong. According to the latest World ultra wealth report Hong Kong ranks second globally in terms of the number

of ultra high net worth individuals people have more than 30 million US dollars of net assets behind only New York City going forward we expect to continue seeing steady growth in spend from this segment you'll see on this slide some key statistics from our bespoke VIC shoppers program so this is our loyalty program that we've been creating since 2018 comparing year-on-year spend by our top tier customers and some of these statistics are just incredible. But the top 100 local spenders at Landmark in aggregate spent 1.2 billion Hong Kong dollars, a 16% growth compared to 2024. So that's more than one and a half million US dollars spent on average for each of these VICs at the Landmark Mall. VIC sales accounted for almost 85% of total sales of the Best Boat program and continues to grow. Digging a bit deeper, you'll see how important VICs are to our strong performance. The average ticket size, the tenner, and the lifetime spend of the VICs are all significantly

higher than the rest of the luxury market. A final number I'd like to leave you with just to get a sense of our VIC spending power. The top 10 lifetime customers since the launch of our bespoke program in 2018 have had a cumulative spend of $1.3 billion, the top 10. In terms of consumption trends, the majority of their spend continues to be on watches, high-end jewelry, ready-to-wear fashion, and premium leather goods. Moving on to Singapore office, where we see favorable demand supply dynamics in the marina based CBD over the next several years, which is likely to result in steady growth of gross rents. According to the Urban Renewal Authority's latest draft master plan, there will be very, very limited new office supply in core CBD over the next few years with only around 110,000 square foot of net new supply per year from 2025 to 2029. So this augurs very, very well for our SC PREF fund.

On to retail in the Chinese mainland. The difficult market conditions over the past couple of years have been very well documented. And despite improvements in certain segments such as the luxury market versus a low base in 24, we expect the market to remain highly competitive in 2026. Having said this, consumers and by extension our tenants are rewarding, well-located and well-managed assets which are able to deliver innovative and experience-led concepts. For the year ahead, active asset management involving constant tenant mix optimization and the ability to continue delivering on creative and engaging experiences remains critical to driving performance improvements. And we are one of the, there's a handful of us who are still strong believers in the luxury and the retail market in China and deploying capital. Many of our peers are not. Many of the private companies in China who previously were opening malls in China are no longer opening those malls. So there really is an opportunity for us and others to take advantage of that. Looking at our

prime central segment is expected to drive return to growth for market rents. And for those of you in the room who know, from the trough of the office market cycle to the peak, rents can move significant. And particularly in the central district, the very core, there's only a few that we would deem to be. If a tenant comes to the Hong Kong central portfolio, it may go to IFC 1 and 2, it may go to Henderson, it may go to AIA, but it's only a very small group of assets. That group of assets, the vacancy is about 3.5% right now. I think IFC we understand is 99, 100% occupied. So that small group, that small cluster of assets where there's a disproportionate amount of demand from financial institutions, from private equity, from hedge funds, from family officers is really going to enjoy the full benefit of that rental uptick. We've seen the positive momentum from the second half of last year continuing into this year. Reversions may remain negative, but we think the magnitude is expected to reduce significantly this year as market rents really come into an upside trend.

For the landmark, the initial phase of Tomorrow Central has begun bearing fruit. As new openings for Phase 2 are progressively launched, further positive rental reversions are expected. As you saw on previous slides, ultra-high net worth consumption, which is our focus, has seen solid, solid growth, and we expect this to continue into 2026 and beyond. In Singapore, we expect positive reversions to continue on the back of limited supply in the CBD and a largely stable economic outlook. And for China, we remain cautiously optimistic on the short-term trading outlook. Our focus on active monetization of our build-to-sell assets, execution of Phase II of Westbourne Central and driving performance of our lifestyle retail pipeline remains unchanged. In terms of strategic priorities and focus areas for 2026, on portfolio, our ambition remains unchanged. We continue to work on opportunities to monetise, build to sell assets, as Craig said, bringing

that cash back into the non-coronary. It's the upper end of our ambition of 6. On capital management, our approach remains consistent. 80% of recycled net proceeds will be earmarked for earnings growth investments. We know we need to grow our earnings, and that's a very, very strong focus of Michelle, myself and Craig and the management team, and up to 20% allocated to share buybacks. In line with previous announcements, future buybacks will continue to be funded by capital recycling. As we sell something, we will continue to use that 20% of that on our buyback program. For dividends, you know, I think this is a really important point. You know, we say what we do and we do what we say, and we told the world that we were We're going to double our dividends by 2035, and this really proves that point. Our intention is to continue to do that, and our absolute intention is to have a dividend of 44 cents by 2035. On third-party capital, there is plenty of work ahead to secure new potential capital

partners for SC-Pref. Michelle is working incredibly hard at making sure that the queue of new investors who wants to join us is as long as it possibly can be. We also continue to engage with these capital partners, not just in Singapore, but given the strength of our relationships, there may be other opportunities and other gateway cities that we can work with them on. On ultra-premium gateway assets, the focus on existing portfolio anchors is to continue delivering for our tenants and our customers across both Tomorrow Central and Westbourne Central. Absolutely critical that we make sure that the operating performance of those assets is world class. In terms of growth opportunities, the team is firmly focused on executing our growth ambitions in SC-Pref. It's an incredible opportunity for us to grow that vehicle, as well as active assessment of new Gateway City opportunities. Before we conclude for today, I'd like to spend a few minutes on enhancing shareholder value. When I joined in our focal point on October 24 was TSR, was Total Shareholder Return.

I think over that period, I think we've had the strongest total shareholder return of any real estate company in Asia Pacific, and one of the strongest in the world. And that really, looking at this chart, when I joined the discount to NAV was 80%. We were trading at about a $6 billion market cap on $32 billion of net asset value, .2 times book. By saying what we do and doing what we say, and all of the events that have transpired since then, that gap has closed. But it's in credit, I mean, that's really our focus, by selling assets in NAV to demonstrate that our assets are truly worth what we say they are, by doing the recycling, the buyback, the dividend growth, doing everything we can to ensure, creating new fee income streams through fund management, that we continue to close that gap. And we've still got a long way to go. We're at 40 odd percent discount to NAV. Our NAV has just ticked up, as Craig said, so we've had harder work for us, but we will continue to focus on closing that NAV gap. Fully cognizant that one of the key reasons this has come through fruition

is that we've followed through on the commitments that we made to you. So despite the strong start we've had, we intend to continue doing what we have said, and we will absolutely do it. Absolutely, the whole management team, the reorganised restructuring that we've gone through, all focus on closing that gap. Our work is far from complete as we remain firmly focused on narrowing this discount. So there's one thing you remember when you leave, it's narrowing the discount, it's absolute focus. As we continue to reposition the business, our aim is to facilitate investors valuing the group on the sum of the part spaces. I was an investment banker, so I wasn't allowed to speak to research analysts, but not try to tell you how to do your job, but over time, this would be a great way, I think, as to how potentially the investing community could value Hong Kong land. Firstly, the prime property assets, the aspiration is that they're valued at NAV. And I think we've demonstrated that in Hong Kong. Our NAV has been supported by both the One Exchange Square transaction with the Hong Kong Stock Exchange, as well as there's been a number of high profile transactions,

our sister company Mandarin selling half of One Cause Way Bay, et cetera, all at around that NAV over the past 12 months. For Singapore Central, the establishment of SC-Pref with Hong Kong Land portfolio evaluations endorsed by some of the most credentialized real estate company investors in the world. You know, APG did a huge amount of work before they invested a significant amount of money in that fund at NAV. So that whole fund should not be valued at any discount. So in all of your models in my mind, whatever discounts you want to apply, it shouldn't be on the Singapore pool. That should be at NAV. For Westbourne Central and other assets on the Chinese mainland and across the region, the current share price indicates that there's next to no value ascribed to them. So if you fully value Singapore, you look at what we've done in Hong Kong, there's no value at all subscribed to our China business. As these assets stabilize and potentially recycle into platforms, we feel that there is significant upside from there. For the Build to Sell book, we continue to execute on a robust recycling plan. Absolute focus of attention.

We've taken the provisions. We are pricing these assets for sale. We've already demonstrated the ability to generate net proceeds in an efficient and consistent manner. This part of the book should be valued on a DCF basis. You should take a view. We believe that by 2028, the majority of this inventory will be sold. So some type of DCF to bring that back. And the final component is recurring fee income earnings. We announce our intention to create a fund management business and we have created a very big one and we intend to grow that as quickly as we can and generating a new stream of fund management fees which is not embedded in our NAV. This is a separate business, right? It's very high quality, predictable income streams. In the case of SC-Pref, it's perpetual and it's growing and there's acquisition fees, there's asset management fees, there's leasing fees, there's performance fees. It's an incredible array of fees that we're going to generate from that fund, those earnings should be, I think, qualified for a much higher multiple than maybe other earnings, given the quality of that income stream. We expect

that we will scale SE PREF, as I've said, and establish other fee-related income streams in other cities, will in time grow this business to be a material component of the group's earnings. Overall, we've built very, very solid momentum, and I know I think everyone thinks, well, what's next for Hong Kong land? There's a lot more for Hong Kong land. So please, we're not going to sit by complacently and do nothing. We're all going to be working as hard as we ever have to close that NAV gap, to deliver on our promises, but still, because there is a lot more work ahead, but we're going to do it. So I want to thank you for your support, and happy to take any question from the floor. Thank you. Okay, good. Please. I want to stand. Thank you. So I'm Carl Chen from J.P. Morgan. I have two questions. So the first question is on dividend. Because our understanding is that the guidance on DPS growth will be at roughly around mid single digit percentage, right? And for this result, you guys surprised us once again with 9% hike in the DPS. But then if we look at the payer ratio, right, in terms of adjusted free cash flow is like 60% is OK.

But if it's based on underlying earnings, it's actually more than 100%. So how do you arrive at this 9% growth in dividend? and most importantly, going forward for next year, how should we think about the DPS? Should we also expect a missing literature growth or actually we might be able to also look for a high signature growth in dividend? And for the next financial result, should we look at dividend more based on earnings or based on FCF? So that would be my first question on dividend. And for my second question, it's very simple. Just now, Michael, you mentioned that the goal is to narrow the NAV discounts, right? So what's your goal? Do you think that we should actually target a 0% discount in NAP? That's my second question. Thank you. OK, thank you. Do you want to answer the first one? Yeah, I think on the dividend, Carl, raising it at 9% may seem a bit counterintuitive when our underlying profits came down by 8%, but it's really a reflection of a few things. First of all, the strong capital recycling that we have achieved last year, which is quite impressive.

Secondly, the strong operating cash inflows, which includes the benefit of the Prime Properties investment portfolio, but also as we unwind the Build to Sell segment, there's a lot of cash to come back from that too. From the board's point of view, we feel that we have done a lot and therefore rewarding shareholders with a little bit of that, noting that for every one extra cent on our dividend has a cash cost of about US$21 million. So the extra cash cost is 42 by raising it by 2 cents per share. So a 42 million cash cost against the many billions of US dollars that we've recycled is very manageable overall. I think as we look forward, as I said in my overlay, the intention is to continue to look at our underlying earnings ultimately and for payout ratios. the right thing to do. And as a general guide in the medium to long term, about 80% of our

underlying earnings will be paid out as a dividend. That's our general philosophy. But obviously we find ourselves in a bit of an interesting phase because we've invested a lot of capital and commercial assets in China, which are under development. They will complete in the next few years. The rental income will grow. Plus we've got tomorrow's central in Hong Kong a big investment that's starting to complete and bear fruit and hopefully the Hong Kong office market is troughs and will start to rise so in increasing the dividend the board is also signaling that we have confidence in our earnings growing over time. So I think in the short term I would look at our free cash flow, adjusted free cash flow per share as a guide but over the medium to long term it will revert back to underlying earnings. And the intention is again as I said to ultimately double dividends per share so you should expect us absent any unforeseen events to continue to grow the dividend. It may not be 9% every year but you know there's

an ambition to grow. I'm not going to give any price targets but I'm a hard person to satisfy. I will say that there are some of our peers in Australia, Goodman and others who trade at premiums to NAV because their fund management business is affecting their share price. So You know, theoretically, what we've just done with SC-PREF, $6.3 billion of AUM US, a 5% sort of value of that business is a $300 million dollar value creation there. It's perpetually open-ended. We are going to grow it. That value should also grow. That should help either bridge the gap or maybe if we do hit NAV, then it goes beyond that. So not a price target, but I think as we try to describe if our assets could value at NAV, we're going to redeploy a lot of the balance sheet that we've been recycling. We're going to redeploy that in earnings. That will be incremental earnings growth We're going to grow our fund management business, which is an income stream, which is not factored in. So I think all of these elements, in my mind, you know, NAV is probably not enough, but I'm biased. Please. Thank you.

This is Raymond Liu from HSBC. I got two questions. The first question will come to Michael. Like in the early morning, there was press in the field. So Michael mentioned that Hong Kong land might potentially create funds for Hong Kong properties. can Michael thirdly elaborate and provide a small color on this one and the second question is about the fund management business So I the very like if you look at the capital recycling, which is a phase one of the strategy Amazing in which you provide a lot of guidance and return target long-term target How you're going to execute and so far we can see actually very good progress Can management also provide some more guidance and how we can visualize in terms of your fund management business in terms of like a UM fund growth, like how you're going to build it outside like say for example like Korea, Australia and Japan and other places as well. Thank you. I'm sorry I was listening to the second one. What was the first one? Hong Kong. So okay so in terms of our intentions we made it very clear on October 24 that we want to be a real

estate fund manager and we say what we do and what we say and we've created our first fund. We've got very very good institutional LP relationships. You know APG is one of the world's most credentialized real estate investors. They don't invest in everything. They invest a lot of capital inside us. Qatar Investment Authority, there's a very large sovereign wealth fund from Southeast Asia who's come along. Performing well on that fund, exceeding expectations, exceeding the underwrite will help us work with them further in other jurisdictions. In terms of Hong Kong, when we say we want to be platform ready and with Graham's role, it's not to create a fund, but it's to make sure that it's managed like a fund and that it's platform ready and that there's a spot as a spotlight on it. Nobody can sort of hide when there's light on them. You have it's put it's going to perform like it was in a fund. Whether we do a fund or not, it's going to be platform ready. So I'm not going to say yes or no as to whether that's the intention, but we will be ready if an opportunity arose. We wouldn't be constrained by the operational structure that was managing it.

Maybe if I help out a little bit on the on the second question. So I think we were very clear when we announced the strategy that the goal is to grow our AUM to $100 billion. So at the end of the year, we're at $50 billion, or currently we're at $50 billion US. So effectively, we still got our doubling to go, which is quite significant growth. Some of that increase will come from natural valuation increases in our existing portfolio as we anticipate rental growth. But the vast majority of that extra $50 billion that we need to find is basically new investment opportunities supported by third-party capital. So given our focus on sort of prime office and retail primarily, we're generally a core core plus type investor. So in terms of guidance for your how you see the sort of fund management business building, I think you're familiar with the sort of fees that core core plus type strategies generally attract. So you can apply a sort of a percentage to that sort of AUM growth to give you

a guide. But I think there could be further upside because, as Michael said, in the existing 50 billion AUM, actually the majority of that is not currently in any fund structure. And so there are opportunities potentially over time as we evolve the portfolio, and some of the portfolio matures, particularly in China, you may find that actually we start to earn a fee on the existing AUM as well. So ultimately, in terms of potential, you can take $100 billion and apply some assumption around the fee income and that's the kind of what we're trying to ultimately get to. Thank you, this is Cindy from CTA House 3 Questions. The first question is on your strategic priorities. So you mentioned last year is all about capital recycling. This year what has been added to your new priority list is the capital deployment from management or else. Second question is regarding the target return of your new investment presumably as you grow your AUM.

What kind of a return profile are you looking at? Is it the, say, the 8% for the SD-PRI, as a reference, or what would we be looking at? And the third question is actually back to your central retail, which we think is quite remarkable in terms of your average rent growth and the VIC retail sales. So what are anything else you can do in, say, the coming years to further elevate the project, and what kind of the renovation progress and opening schedule for the new flagship this year? Thank you. OK, why don't I answer the first one. In terms of recycle capital, recycle capital, recycle capital, deploy capital. I think that really is quite a focal point. The fact that we managed to create SC-Pref by merging with one of the best assets in Singapore that was being owned since 2016 by the Qatar Investment Authority, we didn't deploy any capital to buy that. But that building is now under our control. We now manage it. We lease it. We get fund management fees from it. So the opportunity to scale that vehicle and deploy our own capital alongside our partners

is a big priority, as well as other gateway cities that we're looking at. And there's been a lot of work in exploring and thinking through Sydney and thinking through Seoul and thinking through Tokyo. But the core business is also really important, ensuring that tomorrow's central is the success that it's rolling out to be, and to ensure that Westbourne phase two and phase three and phase four are open successfully and well-led up and critically important. So, you know, core business plus growth are probably the two new priorities for me. Great. I think the second question is about returns generally. I mean, I think we've said publicly that SE-Pref has a sort of target return for investors of about 8%. So, you're what you quoted, which is correct. Obviously, for us, it's both an investor but a fund manager, the return is higher. And so, you know, if you look in terms of the fees that we will earn over time from that vehicle, then our returns are more than 9 to 10% range we project. And of course, SC-Pref has growth ambitions, so part of our AUM growth will come from expansion of that

fund overall. So I think in terms of opportunities for us to invest but also improve our return on capital, SC-Pref is actually in well place to help with that overall. I think your last question was on Tomorrow Central and how we're... On Comm I mean, I think our timing has been really, really good. In terms of opening up the first phase of our flagships, the experiential openings that we're doing now, Rubeshan opening, now Terrace Baloo opening, things seem to be working on a good trajectory in terms of the underlying demand, as we've said, with what our bespoke clients are doing. But just the general activity in Hong Kong, I mean, we can all feel it. You get stuck in traffic jams. It's hard to walk around the corridors. I mean, it feels as though Hong Kong is really, really back

on its feet and really running now. And we're benefiting from that. So I think as we continue to open and deploy the capital and work with our partners as they open up their flagship stores, and as Craig said, some of these stores are the biggest in the world. I mean, they're gonna be incredible, like nothing anyone has ever seen. And I think that will then add to the attraction of Central and more and more people will come in. We're not just focused on our inside of our building, we're really also looking at the public realm and what things we can do to ensure winter wonderland and the festive season. how can we make absolutely ensure that Central is the heartbeat of Hong Kong? I mean, maybe just to supplement the sort of positive statements that we've made about retail last year is only the beginning, because of course, tomorrow Central's not yet complete. And so the mazons, it's actually been quite nicely tied, we're generally opening two mazons a year. So last year we had two open, we've got another two opening this year, two the year after, and two the year after that. And so the whole investment case for that overall project ultimately will see Hong Kong lands rental income

we predict to grow by 20 to 25% off its prior renovation levels. It's quite significant actually. So the value that creates both an earnings but also the valuation of the portfolio. And you saw the valuation go up at the end of last year. That's really reflecting part of the rental income. And so actually, I anticipate the valuation going up more in the years ahead as that rental income comes through. And I think just on Michael's point around the renovation, what we're doing in the public realm, there's a couple of exciting things hopefully happening later this year, which we can't talk about, but we will tell you when they happen. So there's a lot of things. We'll see them come.

Hi, Carl Choi from Bank of America. Three quick questions. First, further on the retail side, any color you can give on the Hong Kong retail tenant sales, how the sales have performed a year to date. And second is for central office, just curious, it might be still early days, but any signs that you've seen some slowdown in decision making on the part of corporate when it comes to office leasing, any concerns that if the Middle East conflicts drag on, that may be a little bit of an issue. And third is for China retail, any update on the initial year-end cost for the Nanjing Mall that you opened last year or the pseudo one that you're planning to open and what was the cap rate in general or the range of cap rates used by the valuables for the assets that have been reclassified from assets for sale to IP, thanks. Maybe the second question, it's way too early for us and we're a fixed asset business, our real estate can't be moved, we're not in trading. All our tenants have long dated leases, half of our office portfolio is from very large companies

that have long term leases with us. So it's really too early to tell But our business is quite, I think, immune to any of these political shocks and it's built for resilience anyway. So I don't know the third. So the first one, Carl, was that the third one was about trying to retell on some of our yield on cost. Do you want to? Yeah, so maybe if I pick that up overall, I think you had two parts to your question. The first was about some of the new malls that were opening. Obviously, we opened a mall in Nanjing partway through last year. I mean, when we open malls, clearly, we give lease incentives to tenants to basically come into the mall. So the whole objective of us is to open the mall with high occupancy and then build the rental income over time. So the current yield and cost is sort of low single digits, but that will grow as the mall expands. Suedo is opening next year. Obviously that's positioned at the luxury segment. We've got very strong leasing progress on that mall. We will be the market leader in that city when we open. I think Michael showed a slide about the project and it's quite an impressive

project overall. So I think there we should have quite strong confidence that actually our yield on cost will be quite significant on that mall. I'm expecting anything sort of more upper single digits. The valuation cap rates that were used on the conversion of the MTLAs in China was about 5% to 6% depending on the city and the quality of the asset overall, but broadly in line with market for well-located prime assets. And some of the community moves, our ring series, the one in Chongqing valued up as part of this because the yield on cost is quite high single digits now. So it's not just the luxury central series, it's also our ring series which are performing. Karl, what was your first question? Yeah, I think they've continued the trend actually. I mean, obviously we've got Chinese New Year trading and it's early in the year, but I mean sales have been quite robust in landmark and we haven't seen any change in that.

Please. Thank you management. This is Mark Leung from UBS. I have a few questions. I think first of all, we will be regarding on the office outlook first. Also is regarding on the geopolitical on Middle East. Do you think it will be a positive for our Singapore and Hong Kong office portfolio because of more maybe fund rotation. Well, I'm gonna say yes because that's me. Secondly, we'll be more like on the central office. When do you see our range could back to the peak? Is it, do you have a timeline for Hong Kong office range to back to the previous peak? And also just from the central office fund perspective, definitely we are at the bottom of the markets. A lot of the LPs should be interest. What kind of signposts we should monitor to see that a fund off-low opportunity could emerge? For example, like hyper decline, commercial banks, granting the CIE loan again.

So want to keen to hear your thoughts about that. Yeah, I think that's all for my questions. Thank you. Well, your first one, I mean, generally my personal view, maybe not a call, but I do think that it's, for financial centers across the world that are, strong and stable like Hong Kong and Singapore, I think any sort of uncertainty anywhere in the world, Hong Kong and Singapore end up being quite well regarded. So, what was it, the second one? Yeah, I mean, maybe just on that point, I think it's well known that a lot of hedge funds have moved actually to Dubai in particular. And so, I mean, I think it's gonna be interesting how Dubai is viewed post all these events actually. So I think Hong Kong and Singapore personally, I think would be net beneficiaries of some migration of talent back to this part of the world where both of those locations are, I think, is right to say are regarded as safe havens and even on a tax point of view, fairly attractive tax rates. So I hope that's beneficial for both our retail for luxury goods but also office generally.

I think the signposts on the latter part around the fund overall, I mean, I think you're right to call out. I think it's linked to your second point around rental levels in Hong Kong. I mean, Hong Kong office, for us, if I start with retail, maybe retail, when COVID hit, market rents fell by 40% very quickly. And so the impact on our retail portfolio in the COVID years was more significant initially. But as we demonstrated, we've basically recovered our rental levels back to there. Office is not the same story. So the peak to trough in Prime Central is down by about 40%. We saw stabilization last year, mild growth starting to come through. And so we need to build from there. I think the open question is the pace of the growth. So I'm confident that there'll be growth, but the pace of it is the one that I think you're rightly asking about. But there's no supply in Central. I mean, the new supply that's come into the market

in the last few years is now effectively absorbed for the best buildings, as Michael mentioned earlier. And so actually, I do think we're getting to a point where there's gonna be a tipping from a tenant market into a landlord market for the best buildings in Hong Kong. Hong Kong's still got way too much supply overall, but I think we've demonstrated consistently that flight to quality, people want to be in the best buildings, they want to be in central Hong Kong. And so I think the ingredients are all there actually for quite significant rental growth. We've seen it many, many times in Hong Kong. I mean, that sort of spiking of rents. And we've got some resilient demand, hedge funds continue to grow. We are, I think now officially, the largest wealth capital center globally and based on flows. Given what's happening in the Middle East, I don't see that changing. And so again, we just, you know, IPO capital markets is up. So a lot of good things are in the mix. And so hopefully we see some good rental growth coming through overall.

And I think that actually is also linked to the fund question, because ultimately any investor wants to see growth in any market is what underpins the returns. I mean, SE Prep in Singapore, ultra prime assets, a low yield, but very strong outlook on rental growth. So you take the yield plus the growth plus the benefits of low interest rate leverage, and you've got an 8% return. Hong Kong doesn't have that type of return at this point. And so we need to see a return to growth and also some favorable interest rates. And then I think we're well placed to do something then. Yeah, 100%. Agreed. Please. I have two questions. Simon from Goldman Sachs. So the first question, just back to the AUM business. I think Michael, you did mention that Singapore market turning a bit more active and that you very much wanted to go to other markets. Perhaps can you share with us what other market you would be interested in,

what sort of observation you have seen so far in the last couple of months? And then second question, just on the monetarisation point, you mentioned I think that there's a bill to sales, properties that are still sitting in your book to be exposed by 2028. Can you give us that number? How much is that still on your book? And secondly, just on your ring or the other rental property in China that you are planning to inject into these fund management business, what is the size of that portfolio? OK, maybe if I hit those questions just before I'll pass to Michael first. Are gross assets built to sell at the end of last year across the whole region as $2.9 billion US dollars? Our net take from that, so once we recycle the 2.9, pay down any joint venture debt and liabilities, is about $1.4 billion US dollars. And so in terms of the net cash benefit going forward, Michael was talking about how should you value a bill to sell, DCF, that's basically your gross number

that you need to look at. And if I go back to when we announced the strategy and we said that we wanted to recycle 10 billion US dollars and not that 10 billion, three was from the bill to sell, the fact there's 1.4 ish left to go basically tells you that we've recycled half of the capital already. So that's the stats on bill to sell. On the MTLA assets, that pool of capital's gonna value our share of close to 4 billion US dollars. I think in terms of other markets, back in October 24, the intention of our announcement was ideally for us to be peerless. You know, we'd love to be in the gateway cities of Asia, the cities that have our financial centers, have a stock exchange, have our centers of high net worth. We'd love to have projects such as this or what we've got in Marina Bay or what we're building in Shanghai. and really potentially have those assets attached to third party capital that are being valued independently, so all you guys understand that these are the asset values in their longer applied discount. So ideally that's what it is. So in terms of what are other financial city centers

like Singapore, Hong Kong, and Shanghai, it's Tokyo, Seoul, and Sydney. So there's a bunch of activity, a bunch of time, and we've hired people in different markets and we hopefully can make some announcements, but those are the cities that really echo most with us. But if we had similar scale in each of these cities, there wouldn't be anyone like Hong Kong Land. It would be quite peerless, and you'd have to then value those individual parts. The more that we could help you value them like we're doing in Singapore with SC-Pref, the easier it is for you to value. Maybe if we jump to a few questions that have been submitted online. I think Rachel Tan from Macquarie, hey Rachel, I think she's been typing all morning because she's got lots of questions. Um, let me just read some of these out. I think we've answered some already, but first of all, dividend payer ratio. How should we think about that going forward relative to profit? I answered that question, McCall, so hopefully that's dealt with. Two, Westbond Central, how should we expect earning contributions from this portfolio to materialize as it progressively opens?

I think on this one, Westbond is a huge project, as you know, 18 million square feet in totality, being built in phases. the whole project will not complete until 2029. And so we are opening, have opened phase one, phase two is in the process of opening as Michael shared. But really as the project that the way the project was designed is that the largest component parts of the development are actually towards the end. So 28, 29. So what that means in terms of rental income, in terms of the materiality of it, it's not going to be that big a contributor to Hong Kong land until really 2028 onwards. And similar to any new asset that opens, there's obviously a stabilization phase in the first few years. So really it's more about, this will be more material probably from 2030 onwards as the development sort of matures overall. I think for us, the key thing is ensuring that the development is positioned appropriately.

And what I mean by that is that we continue to attract some of the world's best luxury brands, retail brands and multinationals. And as Michael shared, we have done that so far. And so good progress being made, but a lot more to do generally. Rachel's also asking about what drove the valuation gains in Hong Kong Central. It's basically the retail office was flat, but the retail, because of the growth in the tomorrow's Central, drove a 15% increase in retail last year, which is strong generally. And I think if I covered everything, impairments in China, do you expect any more impairments after taking impairments in each of the last two years? I mean, I think here are a few things to say. First of all, we've decided to exit the China bill to sell, or in fact, all our bill to sell business. And so we are focused on speed of and velocity of sales. And so to encourage sales in China in a very difficult market,

we need to make sure we're competitive. And so we do review the pricing from time to time. We did a big review in the second half of last year on our pricing, and we took some big reductions, which has benefited sales. Sales went up towards the end of last year. And so the intention with that review is really to try and, obviously, benefit recycling. We will continue to monitor how the market goes. Things have not really improved in China, nor do I expect them to improve in the next couple of years. And so it's not easy. But I think in terms of impairments, we've done all we think we need to do at this point in time overall. Just to supplement that valuation point, just thinking about the investment that we've made in Tomorrow Central. When we announced we said it was a billion US dollar investment, 40% from Hong Kong land and 60% from our tenant partners, that 40% or 400 million US, which we're actually under budget on. But just the valuation gain. forget the incremental earnings that we're going to get off that investment,

the valuation gains is already multiple of that investment, if you know what I mean. So it's not just the earnings uptick. So if you want to look at how we deploy capital, that's a good example. Sarah? Congratulations on the results. Great to see. Craig already mentioned, I guess, Hong Kong's relative positioning from a safety point of view, given everything that's happening in the Middle East. If we look at AI, I think that's coming a lot faster. And we'll see how that plays out than many expected. but you can play forward to that leading to huge taxation changes at a government level so that they can pay for other things. And obviously Hong Kong should be incredibly attractive on that sense as well. I wonder, given the pace of everything that's changing when you're talking to tenants about 10-year office leases, are you starting to see any changes in terms of what they're looking for, the number of people, the office versus work from home, configurations,

anything that we can glean? I think the work from home point has never really been a massive issue in Hong Kong for all sorts of the reasons that we know, right? Singapore more, and I think we saw more of an impact on that during the COVID period. I think what's been a bigger discussion more recently has been growth, so growth of people's businesses. So Singapore has continued to expand, generally rents are up in Hong Kong because of the capital markets activities, the conversations we're having with tenants now compared to 12, 18 months ago is night and day. I mean, it was talking to law firms who were cutting headcount and they're now having to think about how they handle the workload. But to your point on AI, they are using more tools in that way to try and help and manage. And therefore, in many respects, I think it limits maybe the growth potential of some of the tenants in terms of their space demand.

And so actually what it means is, again, it comes back to where do these tenants want to be from an office point of view. So the flight to quality point, I think is critical. To Hong Kong has no additional land. So the ability to build anything new is incredibly limited. I think the third point that I do remind people, in fact, we discussed at our board yesterday, AI, You know, Hong Kong prime CBD, the nature of people that are here doing business is not necessarily as impacted as much by AI as a back office may be or in a second tier city overall. And so personally, I think that, you know, globally, top tier cities will continue to see strong demand for office. happens in second and third tier cities I think is going to be very different. So where you invest your capital, how you invest it and we kind of went through

this as a board and as a management team in 24 because when we looked at our strategy and where the growth opportunities were we continued to have a strong conviction on office prime office in key gateway cities even when we factored in potential disruptive impacts from AI. Which is why we focus on gateway cities because of that uncertainty around some other cities. There's a couple other questions online from Nickelistic credit sites with the net capital, net capital recycling proceeds could management give a guidance on how much would be allocated to further debt reduction? I mean maybe just just to say here recycling capital was to create investment capacity, it wasn't to cut the debt of the group. I mean Hong Kong land has always been a very strong well-resourced business with strong credit ratings. We didn't need to reduce the debt. We weren't an overlevered company.

And so as we recycle capital, the net debt's gone down. But as we look forward, we are looking to deploy capital into acquisition. So it's not so much about having a net debt target. It's more just creating headroom for growth. And as I said, we've got liquidity at the group level of about $3.5 billion US dollars. So we're actually well placed to make some new investments going forward. And then there's a question here about credit rating impacts as we shift from build to sell and wind that down. Obviously, there's a temporary earnings impact. And does the company see any rating downgrade pressure? We have obviously ratings with S&P and Mujis that are investment grade and very strong and have been stable for some time. In terms of their immediate views on our strategy, they actually were very supportive because cash is coming in, debt is going down. I think their views on our ratings looking forward is more about the pace of expansion,

how the expansion is structured, and how debt or further debt is used potentially in new fund structures. So I'm not anticipating any change to our investment grade ratings in the near term, But ultimately, how the rating agencies think about us is kind of within management teams control because how we control the pace of our expansion and the way that we do it, we will look to ratings and have a view on that generally. And in fact, just to remind everyone, we announced on October 24, we set ourselves some financial guardrails. We're not going to lose our investment grade rating. We're not going to go into equity. We're not going to have a $2 billion rights issue or anything like that. So those are things that are really focused. So that investment grade rating is absolutely critical to us. So there's one question maybe for you from Joho at Rondell. Any progress in sea reeds in the mainland China? We watch it. Lots of bankers come and see us. It's good to see people like Capital Land and some of the foreign non-domestic owners

of real estate going to the sea reef market. There's a couple of things for us. Some of our assets are still not sufficiently stabilised. So we want to make sure that we've got two or three years of earning history before we look at it. But it's definitely something that we want to think about look at, but it's probably too premature for us right now. But part of the reason why Alvin is now going to be looking after all of those assets is to shine a torch and make sure that we're organizationally, operationally efficient. So if the opportunity arises, either in a pre IPO format or a C-REIT format, that we're ready to go. Maybe just around, there's a couple of questions again from Rachel and also John at Shroaders around return on equity and do we have a target, are we thinking about it? I mean I think in terms of shareholder returns, improving return on equity is absolutely a focus. I mean so having a clear capital allocation framework which we do is in no small part because we want to improve returns on capital overall. It's not an easy thing for us to fix overnight

though because of the weighting of the Hong Kong portfolio which is some of the best and most prime assets in the world, which has a very low yield. And so as we expand into fund management and over time, increase that exposure and grow the AUM in a more asset-light way, it's natural that the ROE will go up. And I think as we evolve our structure around the portfolios, as Michael took us through, we will also be evolving our reporting disclosures, because I think it's important as we try and encourage you to value us in the sum of the parts basis that we provide more insights. And so some clarity around some of our new growth areas and the return on capital are things that we intend to be disclosing more of in the future. And that may be it. Thank you so much everyone for joining us. Please walk around Hong Kong Central and see all the activities that are taking place. And we'll see you at the next briefing.

Thank you. Thank you. Thank you.