2017 Results 2018 Half-Yearly Results

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1 2017 Results 2018 Half-Yearly Results Presentation Presentation 27 July 2018

2 Agenda Speakers: Robert Wong, Chief Executive & Simon Dixon, Chief Financial Officer Half-Yearly Highlights 2. Investment Properties 3. Development Properties 4. Financial Highlights 5. Outlook 6. Q&A 2018 Half-Yearly Results 2

3 2018 Half-Yearly Highlights US$455m US$37.3bn Underlying profit Shareholders funds % YoY +1% HoH * * 34 * * H H H 2018 Jun 2017 Dec 2017 Jun 2018 Key figures Profit 1 : US$1,124m (1H 2017: US$3,114m) Net debt: US$3.1bn (Dec 2017: US$2.5bn) NAV per share: US$15.93 (Dec 2017: US$15.66) Interim dividend per share: US 6 (1H 2017: US 6) Highlights Underlying 1H profit down 3% YoY and 5% HoH Lower underlying profit due to timing of sales completions in mainland China Continued strong performance from investment properties Five new projects secured 1 Attributable to Shareholders of the Company * Restated 2018 Half-Yearly Results 3

4 Investment Properties 2018 Half-Yearly Results 4

5 Investment Properties Overview Investment properties are primarily located in Hong Kong and Singapore TOTAL COMPLETED AREA (HKL s share) 83 TOTAL 249 TOTAL 4,868 TOTAL 389 TOTAL (000 s sq. ft NFA) HANOI TOTAL MACAU HONG KONG 4, BEIJING TOTAL 9,211 * TOTAL BANGKOK ,778 TOTAL 373 TOTAL PHNOM PENH OTHERS Office Retail Hotel 7,153 1, SINGAPORE 1, ,126 TOTAL JAKARTA 1,034 * Equivalent to 856,000 sq. m. 92 * As at 30 Jun Half-Yearly Results 5

6 Hong Kong Portfolio Office Positive rental reversions and low vacancy as market supply remained tight AVERAGE RENTS & VACANCY 1% 2% 15% Average net rent (HK$ psf/month) 1H H H Period-end vacancy 1.5% 1.4% 1.9% 6% 7% OFFICE TENANT PROFILE 39% Weighted average lease expiry (years) EXPIRATION AND INTERIM RENT REVISIONS 2H % Total lettable office area subject to expiration/rent revisions ( 000 sq. ft) % of area subject to expiration/rent revisions 708 1,042 1,062 17% 25% 26% Banks and Other Financial Services Trading Legal Government Accounting Others Property - Expiration 7% 19% 21% - Rent revisions 10% 6% 5% Average expiring net rent (HK$ psf/month) Half-Yearly Results 6

7 Hong Kong Portfolio Retail Higher rents due to positive reversions and higher turnover rent 14% AVERAGE RENTS & VACANCY 6% 1H H H 2018 RETAIL TENANT PROFILE 49% Average net rent (HK$ psf/month) Period-end vacancy 0.6% 0.1% 0.4% 31% Weighted average lease expiry (years) Fashion & Accessories Food & Beverages Jewellery & Watches Others 2018 Half-Yearly Results 7

8 Singapore Portfolio Office Low vacancy rate 6% 2% 6% 4% Average gross rent (S$ psf/month) AVERAGE RENTS & VACANCY 1H H H Period-end vacancy 0.2% 0.3% 0.1% 5% 7% OFFICE TENANT PROFILE 70% Weighted average lease expiry (years) EXPIRATION AND INTERIM RENT REVISIONS 2H HKL s Share: Total lettable office area subject to expiration/rent revisions ( 000 sq. ft) % of area subject to expiration/rent revisions 19% 17% 21% Banks and Other Financial Services Natural Resources IT Services & Consultancy - Expiration 4% 10% 14% Legal Accounting Property - Rent revisions 15% 7% 7% Others Average expiring gross rent (S$ psf/month) Half-Yearly Results 8

9 Rest of Asia Portfolio WF CENTRAL opened in Beijing, EXCHANGE SQUARE opened in Cambodia, WTC 3 completed in Indonesia Beijing WF CENTRAL (84%-owned) Prestigious retail centre, which includes an exclusive luxury hotel (Mandarin Oriental) Destination for renowned art and cultural exhibitions in the city Trusted partner of prominent fashion houses making their debuts in mainland China 43,000 sq. m. NFA of retail space Retail component had its grand opening in May 2018 Occupancy: 82% MAINLAND CHINA Hotel opening in late 2018 Jakarta Jakarta Land (50%-owned) Existing portfolio features 209,000 sq. m. NFA, including WTC 3 which was completed in early 2018 Average gross rent*: US$26 psm per month (2017: US$25 psm per month) Occupancy*: 89% *excluding WTC 3 Phnom Penh EXCHANGE SQUARE (100%-owned) Grand opened in May 2018 NFA: 26,000 sq. m. SOUTHEAST ASIA Average gross rent: US$24 psm per month Occupancy: 86% 2018 Half-Yearly Results 9

10 Development Properties 2018 Half-Yearly Results 10

Development Properties Overview The development properties portfolio spans seven countries and 14 cities, with a key focus on mainland China and Singapore 147 TOTAL THAILAND - 147 5,641 TOTAL

11 Development Properties Overview The development properties portfolio spans seven countries and 14 cities, with a key focus on mainland China and Singapore 147 TOTAL THAILAND ,641 TOTAL MAINLAND CHINA 2,568 3,073 TOTAL DEVELOPABLE AREA (HKL s share) (000 s sq. m. GFA) 168 TOTAL VIETNAM TOTAL OTHERS 3-8,528 * TOTAL 194 TOTAL SINGAPORE TOTAL INDONESIA TOTAL MALAYSIA TOTAL THE PHILIPPINES Constructed Under construction/ to be developed 2,871 5,657 * Includes newly acquired projects up to 30 Jun Half-Yearly Results 11

12 Mainland China Portfolio Overview CHONGQING WUHAN BEIJING Eight projects Total GFA 6.4 million sq. m. (HKL s share: 4.3 million sq. m.) Wuhan Dream Land (50%-owned) Total GFA 493,000 sq. m. (HKL s share: 247,000 sq. m.) Central Park (40%-owned) Total GFA 329,000 sq. m. (HKL s share: 132,000 sq. m.) IMAGE TO BE CONFIRMED CHENGDU NANJING SHANGHAI WE City (50%-owned) Total GFA 896,000 sq. m. (HKL s share: 448,000 sq. m.) Two projects Total GFA 452,000 sq. m. (HKL s share: 189,000 sq. m.) HANGZHOU Parkville (50%-owned) Total GFA 230,000 sq. m. (HKL s share: 115,000 sq. m.) Xiaoshan (30%-owned) Total GFA 776,000 sq. m Half-Yearly Results (HKL s share: 233,000 sq. m.) 12

13 Mainland China Portfolio Solid contracted sales but lower profit contribution as a result of timing of completions REVENUE RECOGNISED # CONTRACTED SALES # SOLD BUT UNRECOGNISED SALES # US$m Chongqing Shanghai Chengdu Beijing US$m Chongqing Shanghai Chengdu Beijing US$m Sales to be recognised next 6 months Sales to be recognised after next 6 months 1,600 1,400 1,600 1,400 1,600 1,400 $1,421m $1,507m 1,200 1, $827m 1,200 1, $701m $650m 1,200 1, $1,032m $520m $411m $160m H H H H H H Jun Dec Jun 18 # The above analysis includes share of Joint Ventures & Associates 2018 Half-Yearly Results 13

Singapore Portfolio Overview 710 units LAKE

) Completion: 2019 100% sold 1,327 units SOL

8% sold IMAGE TO BE UPDATED IMAGE TO BE UPDATED

670 units 507,000 sq. ft GFA (47,000 sq. m.

14 Singapore Portfolio Overview 710 units LAKE GRANDE 537,000 sq. ft GFA (50,000 sq. m.) Completion: % sold 1,327 units SOL ACRES 1.24 million sq. ft GFA (115,000 sq. m.) Completion: % sold IMAGE TO BE UPDATED IMAGE TO BE UPDATED TULIP GARDEN Conditionally acquired (50% share) 670 units 507,000 sq. ft GFA (47,000 sq. m.) Completion: units MARGARET VILLE 239,000 sq. ft GFA (22,200 sq. m.) Completion: % sold IMAGE TO BE UPDATED 1,399 units EUNOSVILLE 1.05 million sq. ft GFA (98,000 sq. m.) Completion: Half-Yearly Results 14

15 Singapore Portfolio Revenue and profit contribution driven by the completion of Sol Acres REVENUE RECOGNISED CONTRACTED SALES SOLD BUT UNRECOGNISED SALES Sol Acres LakeVille Lake Grande Sol Acres Lake Grande Sales to be LakeVille Margaret Ville recognised next 6 months Sales to be recognised after next 6 months US$m US$m US$m 300 1,400 1,000 $907m $268m 900 1, $223m 1, $101m $947m $1,135m $135m $137m $130m 0 * Restated 1H H H H H H Jun Dec Jun 18 * * * * 2018 Half-Yearly Results 15

16 Rest of Asia Portfolio Performance within expectations Nava Park (49%-owned) Site area: 67 ha; GFA: 734,000 sq. m. 643 units launched for sale, 81% pre-sold Completion: 2017 to 2033 Anandamaya (40%-owned) Site area: 1.3 ha; GFA: 116,000 sq. m. 509 units, 94% pre-sold Completion: 2018 INDONESIA Asya (33.5%-owned) Site area: 68 ha; GFA: 1.0 million sq. m. 304 units launched for sale Completion: 2019 to 2031 Two Roxas Triangle (40%-owned) Site area: 0.4 ha; GFA: 98,000 sq. m. 182 units, 100% pre-sold Completion: 2018 Mandani Bay (40%-owned) Site area: 20 ha; GFA: 1.2 million sq. m. 2,343 units launched for sale, 77% pre-sold Completion: 2020 to 2035 The ESSE Sukhumvit 36 (49%-owned) Site area: 0.4 ha; GFA: 38,000 sq. m. 338 units, 53% pre-sold Completion: 2020 THE PHILIPPINES THAILAND VIETNAM The Nassim (50%-owned) Site area: 0.6 ha; GFA: 31,000 sq. m. 238 units, 100% pre-sold Completion: B NDC (70%-owned) Site area: 0.5 ha; GFA: 57,000 sq. m. 530 luxury apartments Completion: 2021 Thu Thiem River Park (64%-owned) Site area: 3.5 ha; GFA: 175,000 sq. m. 1,084 units Completion: 2021 to Half-Yearly Results 16

New Projects Five new development property projects were added during the

with Yanlord Residential project GFA: 47,000 sq. m.

17 New Projects Five new development property projects were added during the first half of 2018 NANJING SINGAPORE INDONESIA JL CENTRAL (50%-owned) Office and retail GFA: 235,000 sq. m. Completion: 2023 Tulip Garden, MCL Land (50%-owned) Conditionally acquired JV with Yanlord Residential project GFA: 47,000 sq. m. 672 units Completion: 2022 Arumaya (40%-owned) JV with Astra Residential project GFA: 30,000 sq. m. 262 units Completion: Half-Yearly Results 17

18 New Projects Five new development property projects were added during the first half of 2018 PHILIPPINES THAILAND Bridgetowne (40%-owned) Conditionally acquired JV with Robinsons Land Mixed-use project GFA: 144,000 sq. m. 2,274 units Completion: 2022 to 2026 Nonthaburi, Bangkok (49%-owned) Conditionally acquired JV with Property Perfect Residential project GFA: 261,000 sq. m. 1,204 units Completion: 2021 to Half-Yearly Results 18

19 Financial Highlights 2018 Half-Yearly Results 19

20 Consolidated Profit and Loss Account Underlying profit down year-on-year due to timing of China development properties completions * Restated FY2017* (US$m) 1H H 2017* %YoY 1,616 Revenue 1, (740) Net operating costs (997) (364) Operating profit Share of results of joint ventures (78) Net financing charges (52) (36) 44 (152) Tax (86) (81) 6 (1) Non-controlling interests - (1) 947 Underlying profit ,667 Non-trading items 669 2, ,614 Profit attributable to shareholders 1,124 3, Half-Yearly Results 20

21 Movement in Underlying Profit Lower underlying profit due to the timing of completions in mainland China US$m 600 $470m +$26m -$102m +$61m $455m Underlying profit 1H 2017* Investment Properties operating profit (pre-tax) Development Properties operating profit (pre-tax) Decrease in taxes, noncontrolling interests & other expenses Underlying profit 1H 2018 # The above analysis includes share of Joint Ventures & Associates * Restated 2018 Half-Yearly Results 21

22 Operating Profit by Segment and Region Hong Kong remains the largest profit contributor INVESTMENT PROPERTIES # DEVELOPMENT PROPERTIES # US$m $700 1H 2017* 1H 2018 US$m 1H 2017* 1H 2018 $700 $600 $500 $430m $446m $400 $530m $504m $600 $500 $400 $300 $300 $232m $250m $200 $100 $0 $5m $12m $59m $60m $10m $12m $200 $100 $0 -$1m -$2m $102m $47m $14m $5m $1m $148m Hong Kong Mainland China & Macau Singapore Rest of Asia Total -$100 Hong Kong Mainland China Singapore Rest of Asia Total # The above analysis includes share of Joint Ventures & Associates * Restated 2018 Half-Yearly Results 22

23 Consolidated Cash Flow Statement Lower operating cash flows due to land payments FY2017 (US$m) 1H H 2017 %YoY 800 Operating activities (947) Investing activities (378) (175) 116 (193) Financing activities 384 (433) -189 (340) Net cash inflow/(outflow) 179 (35) ,898 Cash and cash equivalents at beginning of the period 1,617 1, Effect of exchange rate changes (28) ,617 (4,166) Cash and cash equivalents at end of the period Gross debt (excluding bank overdrafts) 1,768 1,892-7 (4,893) (3,774) 30 (2,549) Net debt at end of the period (3,125) (1,882) Half-Yearly Results 23

24 Properties Carrying Values Higher market rents in Hong Kong; net investment in new development properties offset by pre-sale proceeds INVESTMENT PROPERTIES - TOTAL VALUE # DEVELOPMENT PROPERTIES NET INVESTMENT # Hong Kong Mainland China & Macau Pre-sale proceeds Mainland China, HK & Macau US$m Singapore Rest of Asia US$m Singapore Rest of Asia 40,000 35,000 $34,606m $36,813m $37,598m 6,000 5,000 $2,736m $4,025m $4,076m 30,000 4,000 25,000 3,000 20,000 2,000 15,000 1,000 10, ,000-1, Jun Dec Jun ,000 * * 30 Jun Dec Jun 2018 # The above analysis includes share of Joint Ventures & Associates * Restated 2018 Half-Yearly Results 24

25 Treasury Management Financial position and liquidity remain strong 31 DEC JUN 2018 MATURITY PROFILE OF COMMITTED FACILITIES / BONDS (AS AT 30 JUN 18) Net debt (US$m) 2,549 3,125 US$m Bank facilities (drawn & undrawn) Bonds* Net gearing 7% 8% 3,000 2,500 $2,736m $2,317m Average tenor of debt (years) ,000 1,500 Average interest cost 3.6% 3.5% Credit ratings 1, $356m $660m $304m $795m - S&P A A - Moody s A3 A * Issued under MTN Programme which are at face value 2018 Half-Yearly Results 25

26 Outlook 2018 Half-Yearly Results 26

27 Outlook Solid full year performance expected INVESTMENT PROPERTIES DEVELOPMENT PROPERTIES FINANCIAL Investment properties are expected to continue to generate stable returns Continue to look for attractive opportunities to develop prime investment properties in key gateway cities in Asia Higher completions in mainland China expected in 2H 2018 Limited contribution expected from Singapore in 2H 2018 The Group remains active in seeking opportunities in mainland China and Southeast Asia Net gearing expected to move modestly higher due to recent investments Balance sheet remains strong, with capacity to further invest in new projects Maintain disciplined approach in assessing opportunities 2018 Half-Yearly Results 27

28 Q & A 2018 Half-Yearly Results 28

29 Appendix 2018 Half-Yearly Results 29

30 Hong Kong Investment Properties Summary HKL s SHARE ( 000 sq. ft NFA) OFFICE RETAIL HOTEL TOTAL 1 One Exchange Square Two Exchange Square Three Exchange Square Exchange Square Podium The Forum Jardine House Chater House Alexandra House Gloucester Tower Edinburgh Tower The Landmark Mandarin Oriental York House Landmark Atrium Prince s Building Total 4, , Excluding residential properties in Hong Kong of 71,000 sq. ft 2 Equivalent to 452,000 sq. m Half-Yearly Results 30

31 Singapore Investment Properties Summary HKL s SHARE ( 000 sq. ft NFA) OFFICE RETAIL TOTAL One Raffles Link One Raffles Quay MBFC ,025 Total 1, , Equivalent to 165,000 sq. m Half-Yearly Results 31

32 Other Investment Properties Summary HKL s SHARE ( 000 sq. ft NFA) OFFICE RETAIL HOTEL TOTAL Beijing Macau Jakarta 1, ,126 Hanoi Bangkok Phnom Penh Others Total 1, , Equivalent to 238,000 sq. m Half-Yearly Results 32

33 Mainland China Development Properties Summary HKL s SHARE PROJECT CITY INTEREST YEAR OF ACQUISITION SITE AREA (ha) DEVELOPABLE AREA (m sq. m.) CONSTRUCTED (m sq. m.) UNDER CONSTRUCTION (m sq. m.) TO BE DEVELOPED (m sq. m.) Central Park Beijing 40% Yorkville South Chongqing 100% Yorkville North Chongqing 100% Bamboo Grove Chongqing 50% New Bamboo Grove Chongqing 50% Landmark Riverside Chongqing 50% Central Avenue Chongqing 50% New Project - Liangjiang Chongqing 100% New Project - Lijia Chongqing 50% WE City Chengdu 50% Hangzhou Bay Hangzhou 30% Yue City Nanjing 33% JL CENTRAL Nanjing 50% Parkville Shanghai 50% Wuhan Dream Land Wuhan 50% Total Half-Yearly Results 33

34 Singapore Development Properties Summary HKL s SHARE PROJECT INTEREST YEAR OF ACQUISITION SITE AREA (ha) DEVELOPABLE AREA (m sq. m.) CONSTRUCTED (m sq. m.) UNDER CONSTRUCTION (m sq. m.) TO BE DEVELOPED (m sq. m.) Lake Grande 100% Margaret Ville 100% Eunosville 100% Tulip Garden 1 50% Total Conditionally acquired 2018 Half-Yearly Results 34

35 Other Development Properties Summary HKL s SHARE PROJECT COUNTRY INTEREST YEAR OF ACQUISITION SITE AREA (ha) DEVELOPABLE AREA (m sq. m.) CONSTRUCTED (m sq. m.) UNDER CONSTRUCTION (m sq. m.) TO BE DEVELOPED (m sq. m.) Nava Park Indonesia 49% Anandamaya Residences Indonesia 40% Asya Indonesia 33.5% Arumaya Indonesia 40% The ESSE Sukhumvit 36 Thailand 49% Nonthaburi 1 Thailand 49% Two Roxas Triangle The Philippines 40% Mandani Bay The Philippines 40% Northpine The Philippines 40% Bridgetowne 1 The Philippines 40% The Nassim Vietnam 50% Thu Thiem River Park 1 Vietnam 64% B NDC Vietnam 70% Others Malaysia & others n/a n/a Total Conditionally acquired 2018 Half-Yearly Results 35

36 Consolidated Cash Flow - Operating Activities FY2017 (US$m) 1H H 2017 %YoY 876 Operating profit excluding nontrading items (76) Net interest paid (65) (40) 63 (137) Tax paid (55) (61) -10 (549) (298) 1, Payments for development properties sites Development expenditure on development properties projects Proceeds from development properties sales Dividends received from joint ventures (655) (223) 194 (174) (133) (128) Others (225) (131) Half-Yearly Results 36

37 Consolidated Balance Sheet FY2017* (US$m) 1H H 2017* Investment properties 32,481 - Subsidiaries 33,069 30,360 4,332 - Joint ventures 4,529 4,246 36,813 37,598 34,606 Development properties 2,399 - Subsidiaries 2,508 1,859 2,951 - Joint ventures 3,073 2,427 5,350 5,581 4,286 (1,325) Pre-sale proceeds (1,505) (1,550) (1,413) Others (1,231) (1,164) 39,425 Gross assets (excluding cash) 40,443 36,178 Financed by: 36,876 - Total equity 37,318 34,296 2,549 - Net debt 3,125 1,882 39,425 40,443 36,178 * Restated 2018 Half-Yearly Results 37

38 Gross Assets as at 30 Jun % 10% 13% GROSS ASSETS BY ACTIVITY GROSS ASSETS BY LOCATION 90% 77% Investment Properties Development Properties Hong Kong Southeast Asia Mainland China and Macau 2018 Half-Yearly Results 38

39 Properties Carrying Values at 30 Jun % 2% 7% 1% 10% 20% INVESTMENT PROPERTIES TOTAL VALUE $37,598M # DEVELOPMENT PROPERTIES NET INVESTMENT $4,076M # 41% 84% 31% Hong Kong Singapore Mainland China (for immediate sale) Singapore Hong Kong & Macau Mainland China and Macau Others Mainland China (for medium-term lease) Others # The above analysis includes share of Joint Ventures & Associates 2018 Half-Yearly Results 39

40 Investment Property Basis of Valuation CAPITALISATION RATES 1H H H 2018 Hong Kong Office Exchange Square 1 & % 3.00% 3.00% Hong Kong Retail Landmark Atrium 4.50% 4.50% 4.50% Singapore Office MBFC 3.25% 3.25% 3.25% 2018 Half-Yearly Results 40

41 Treasury Management LIQUIDITY AS AT 30 JUN 2018 (All figures in US$ billion) Liquidity as at 31 DEC 2017 HK$ 1 S$ 2 US$ RMB THB 3 TOTAL Committed lines Gross debt Available lines (0.2) 2.2 Cash Available liquidity (0.2) HK$ debt includes US$ debt swapped into HK$ 2 S$ debt includes HK$ debt swapped into S$ 3 THB debt is funded by uncommitted lines 2018 Half-Yearly Results 41

42 Treasury Management DEBT MANAGEMENT AND HEDGING POLICIES AS AT 30 JUN 2018 % THB 5% RMB 11% Banks 60% S$ 20% Floating 54% Bonds 40% HK$ 64% 1 Fixed 46% 0 Type of Facilities Currency Interest Rate 2018 Half-Yearly Results 42

2017 Half-Yearly Results

2017 Half-Yearly Results Presentation 4th August 2017 Agenda Speakers: Robert Wong, Chief Executive & Simon Dixon, Chief Financial Officer 1. 2017 Half-Yearly Highlights 2. Investment Properties 3. Development