2012 Review The Group performed well in 2012 Positive rental reversions in Hong Kong portfolio Rising contribution from Singapore office portfolio Strong performance from Residential business 2
Highlights 2011 2012 US$703m Underlying profit attributable to shareholders US$777m US$4,603m Non-trading items US$662m US$5,306m Profit attributable to shareholders US$1,439m US 30.29 Underlying earnings per share US 33.14 US 228.48 Earnings per share US 61.36 US$10.58 NAV per share US$11.11 US 10.00 Final dividend per share US 11.00 US 16.00 Total dividend per share US 17.00 3
Commercial Property
Commercial Portfolio ( 000 sq. ft NFA) HKL s SHARE Office Retail Hotel Total Hong Kong 4,150 591 143 4,884 Macau - 94 151 245 Singapore 1,650 135-1,785 Jakarta 664 86-750 Hanoi 105 11-116 Bangkok 27 62-89 Others 70-312 382 TOTAL 6,666 979 606 8,251 5
Hong Kong 1. One Exchange Square 2. Two Exchange Square 3. Three Exchange Square 4. The Forum under redevelopment 5. Jardine House 6. Chater House 7. Alexandra House 8. Gloucester Tower 9. Edinburgh Tower 9a. The Landmark Mandarin Oriental 10. York House 11. Landmark Atrium 12. Prince s Building 6
Hong Kong Central Grade A Office Rental Index Index 180 160 140 120 100 80 2008 2009 2010 2011 2012 Source: Jones Lang LaSalle 7
Hong Kong Central Grade A Office Market m sq. ft 2.5 2 New supply Net take up Vacancy Vacancy % 20 16 1.5 12 1 8 0.5 4 0 0-0.5-1 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 Source: Jones Lang LaSalle Disclaimer: The above forecast shall be regarded solely as general guide, no representation is made nor responsibility accepted by Jones Lang LaSalle for the accuracy of the whole or any part whatsoever. 8
Hong Kong Grade A Office Market m sq. ft Vacancy % 8 16 New supply Net take up Vacancy 6 12 4 8 2 4 0 0-2 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 Source: Jones Lang LaSalle Disclaimer: The above forecast shall be regarded solely as general guide, no representation is made nor responsibility accepted by Jones Lang LaSalle for the accuracy of the whole or any part whatsoever. 9
Hongkong Land Central Portfolio: Office 2010 2011 2012 Average Net Rent (HK$ psf/month) 84.3 87.0 90.3 Year-end Vacancy 2.9% 2.0% 3.4% Weighted Average Lease Expiry (years) 3.9 4.1 3.7 10
Hong Kong: Office Tenant Profile Property 6% Trading 3% Government 5% Accounting 8% Others 13% Banks and other financial services 35% Legal 30% 11
Hong Kong: Expiration and Interim Rent Revisions 2013 2014 2015 Total lettable office area subject to expiration/rent revisions ( 000 sq. ft) 864 1,322 1,304 % of area subject to expiration/rent revisions 21% 32% 32% Average expiring net rent (HK$ psf/month) 80.4 106.6 95.2 12
The Forum Redevelopment Premium office development 40,700 sq. ft NFA Completion in early 2014 Pedestrian Plaza to be significantly enhanced 13
Hongkong Land Central Portfolio: Retail 2010 2011 2012 Average Net Rent (HK$ psf/month) 143.7 153.8 170.7 Year-end Vacancy 0% 0% 0% Weighted Average Lease Expiry (years) 2.7 2.3 2.5 14
Macau One Central (47%-owned) Retail component 95% let 15
Singapore One Raffles Link Marina Bay Financial Centre (33%-owned) Singapore One Raffles Quay (33%-owned) Background Image from Google Earth 16
Singapore CBD Grade A Office Market m sq. ft 4 3 New supply Net take up Vacancy Vacancy % 40 30 2 20 1 10 0 0-1 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 CBD Raffles Place, Shenton Way & Marina Bay Source: Jones Lang LaSalle Disclaimer: The above forecast shall be regarded solely as general guide, no representation is made nor responsibility accepted by Jones Lang LaSalle for the accuracy of the whole or any part whatsoever. 17
Singapore Commercial Portfolio ( 000 sq. ft NFA) Attributable HKL Office Retail Total Interest One Raffles Link 237 75 312 312 One Raffles Quay 1,331 4 1,335 445 Marina Bay Financial Centre Towers 1 & 2 1,652 94 1,746 582 Tower 3 1,254 85 1,339 446 TOTAL 4,474 258 4,732 1,785 18
Singapore: Office Tenant Profile Natural resources 10% Accounting 1% Other 5% Banks and other financial services 78% Legal 6% 19
Singapore: Average Rents and Occupancy Average Gross Rent: S$8.9 psf (2011: S$8.6 psf) Occupancy: 94% (including MBFC Tower 3) Weighted Average Lease Expiry (years): 6.6 Note: Average gross rent applies to office portion only and excludes MBFC Tower 3 20
Singapore: Expiration and Interim Rent Revisions 2013 2014 2015 HKL Share: Total lettable office area subject to expiration/rent revisions ( 000 sq. ft) 72 252 436 % of area subject to expiration/rent revisions 5% 16% 28% Average expiring rent (S$ psf/month) 11.2 8.5 9.4 Note: The analysis excludes the unlet 22% of MBFC Tower 3 21
Jakarta Jakarta Land (50%-owned) Commercial space of 140,000 sq. m. after completion of World Trade Centre II Occupancy: 94% Average gross rent: US$20.6 psm (2011: US$18.2 psm) 22
Hanoi, Bangkok and Phnom Penh Central Building (71%-owned) 63 Ly Thai To (74%-owned) Hanoi Bangkok Phnom Penh Gaysorn (49%-owned) Embassy Site (100%-owned) Background Image from Google Earth 23
Beijing Wangfujing (95%-owned) Prestigious retail-led centre, including small luxury hotel Completion: - retail Q4 2015 - hotel Q3 2016 24
Beijing CBD (30%-owned) Prime Grade A office Completion: mid-2016 25
Residential Property
Hong Kong Serenade 140,000 sq. ft Two 47-storey towers 97 units 20 units handed over in 2012 18 remaining units 27
Macau One Central Macau (47%-owned) 12 units handed over 3 units remaining for sale 10 units scheduled for completion over next 18 months 28
Mainland China Shenyang Beijing Chengdu Chongqing Background Image from Google Earth 29
Mainland China Completed Projects Project Interest Project Type Maple Place, Beijing 90% High end residential - 13 units handed over in 2012-98 units available for future sale, mostly leased Central Park, Beijing 40% 72 units of serviced apartments Maple Place Central Park 30
Mainland China Development Projects Summary Project Interest Project Type Bamboo Grove, Chongqing 50% Primarily Residential Landmark Riverside, Chongqing 50% Residential (80%), Office, Retail & Other Yorkville South, Chongqing 100% Primarily Residential Yorkville North, Chongqing 100% Residential (73%), Office, Retail & Other Chengdu Project 50% Residential (47%), Office (22%), Hotel & Serviced Apartments (14%), Retail (17%) Shenyang Projects 50% Primarily Residential 31
Mainland China Development Projects Summary Project Year of Acquisition Site Area (ha) Developable Area (m sq. m.) HKL Share Constructed (m sq. m.) Under Construction (m sq. m.) Bamboo Grove 2005 39 0.73 0.38 0.14 Landmark Riverside 2009 17 0.75-0.09 Yorkville South 2010 39 0.88-0.07 Yorkville North 2011 52 1.04 - - Chengdu Project 2010 10 0.45-0.08 Shenyang Projects 2007 57 0.99 0.08 0.05 TOTAL 214 4.84 0.46 0.43 32
Mainland China Contracted Sales US$m 500 Chongqing Chengdu Shenyang Beijing 400 $429m 300 200 100 $165m $160m 0 2010 2011 2012 Note: The above chart includes HKL s share of Contracted Sales 33
Mainland China Revenue Recognised US$m 500 Chongqing Shenyang Beijing 400 300 200 $142m $159m $213m 100 0 2010 2011 2012 Note: The above chart includes HKL s share of Revenue Recognised 34
Mainland China Projects Launched for Sale Project Bamboo Grove - Phases 3C, 5A & B - Phase 6D Landmark Riverside - Phase 1A - Phase 1B Units in Phase 1,472-349 906 Units Launched for Sale 1,453-347 906 Units Pre-Sold (as at Feb 2013) 74% 100% 89% 43% HKL Share GFA Sold (sq. m.) 58,000 5,000 24,800 23,300 Completion Date 2013 2014 2013 2014 Yorkville South 324 323 73% 54,700 2013 Chengdu Project 383 383 53% 15,200 2014 Shenyang Projects 194 132 36% 3,900 2014 TOTAL 3,628 3,544 184,900 Note: Units sold are stated on a 100% basis but attributable GFA is HKL s share only 35
Singapore Current Residential Projects The Estuary Este Villa Palms@Sixth Avenue Ripple Bay Jurong West Terrasse Jurong Gateway D Mira Parvis Hallmark Residences Uber 388 Marina Bay Suites 36
Singapore Completions in 2012 Project Units GFA ( 000 sq. ft) Completion Date Sold Parvis (50%-owned) 248 394 Sep 2012 100% D Mira 65 78 Nov 2012 100% TOTAL 313 472 Parvis D Mira 37
Singapore Projects Launched for Sale Project Units GFA ( 000 sq. ft) Estimated Completion Date Pre-Sold Este Villa 121 329 2013 100% The Estuary 608 609 2013 100% Terrasse 414 476 2014 100% Uber 388 95 91 2014 86% Ripple Bay 679 612 2015 96% TOTAL 1,917 2,117 38
Singapore Projects to be Launched Project Units GFA ( 000 sq. ft) Estimated Completion Date Palms@Sixth Avenue 32 109 2014 Hallmark Residences 75 102 2014 Jurong Gateway 738 524 2016 TOTAL 845 735 Palms@Sixth Avenue Hallmark Residences 39
Singapore Recent Acquisition Acquired Jan 2013 Cost: US$350m Total GFA: 675,000 sq. ft 670 apartments 40
Singapore Marina Bay Suites (33%-owned) 221 units, 0.47m sq. ft Completion 2013 87% sold 34 units sold in 2012 41
Indonesia BSD City, Greater Jakarta (49%-owned) JV with PT Bumi Serpong Damai Site area 68 ha Southwest of Central Jakarta Master planning underway 42
Financial Results
Consolidated Profit and Loss Account (US$m) 2011 2012 1,224 Revenue 1,115 (392) Net operating costs (315) 832 Operating profit 800 76 Share of results of joint ventures 166 (67) Net financing charges (61) (134) Tax (125) (4) Non-controlling interests (3) 703 Underlying profit 777 4,603 Non-trading items 662 5,306 Profit attributable to shareholders 1,439 44
Revenue (US$m) 2011 2012 804 Commercial revenue 856 420 Residential revenue 259 1,224 Total 1,115 Higher average rents in Hong Kong drove Commercial revenue Lower Residential revenue due to Singapore, where major 2012 project was in 50% joint venture 45
Underlying Profit by Business (US$m) 2011 2012 758 Commercial property 820 289 Residential property 301 (51) Corporate expenses (60) 996 1,061 (97) Net financing charges (96) (190) Tax (183) (6) Non-controlling interests (5) 703 Underlying profit 777 46
Commercial Property Operating Profit (US$m) 2011 2012 Greater China 641 - Hong Kong 687 15 - Mainland China & Macau 17 Southeast Asia & Others 86 - Singapore 98 16 - Others 18 758 Total 820 47
Residential Property Operating Profit (US$m) 2011 2012 Greater China 77 - Hong Kong 85 93 - Mainland China & Macau 96 Southeast Asia & Others 118 - Singapore 116 1 - Others 4 289 Total 301 48
Consolidated Cash Flow (US$m) 2011 2012 336 Operating activities 299 (235) Investing activities (846) (59) Financing activities (297) (43) Others (70) (1) Movement in net debt (914) (2,358) Net debt at beginning of period (2,359) (2,359) Net debt at end of period (3,273) 49
Operating Activities (US$m) 2011 2012 832 Operating profit excl. non-trading items 800 (57) Net interest paid (34) (118) Tax paid (148) 58 Dividends received from joint ventures 140 (373) Purchase of residential sites (791) (6) Others (primarily pre-sale proceeds) 332 336 299 50
Investing Activities (US$m) 2011 2012 (51) Major renovations capex (48) (257) Funding of joint ventures (349) Development expenditure - - Wangfujing, China (498) (34) - Phnom Penh, Cambodia (2) 111 Loan repayments from joint ventures 58 (4) Others (7) (235) (846) 51
Consolidated Cash Flow (US$m) 2011 2012 336 Operating activities 299 (235) Investing activities (846) Financing activities (371) - Dividends paid by the Company (374) 336 - Conversion of convertible bonds 57 (24) - Others 20 (59) (297) (43) Others (70) (1) Movement in net debt (914) (2,358) Net debt at beginning of period (2,359) (2,359) Net debt at end of period (3,273) 52
Consolidated Balance Sheet (US$m) 2011 2012 22,623 3,132 Investment properties - Subsidiaries - Joint ventures 23,494 3,740 25,755 27,234 1,521 1,007 Properties held for sale - Subsidiaries - Joint ventures 2,514 1,168 2,528 3,682 (1,160) Others (1,459) 27,123 Gross assets (excl. cash) 29,457 24,764 2,359 Financed by: - Total equity - Net debt 26,184 3,273 27,123 29,457 53
Investment Property - Basis of Valuation Capitalisation Rates 2011 1H 2012 2012 Hong Kong Office Exchange Square 1 & 2 4.50% 4.20% 4.00% Hong Kong Retail Landmark Atrium 4.50% 4.50% 4.50% Singapore Office MBFC 4.00% 4.00% 4.00% Note: These capitalisation rates are provided on an indicative basis 54
Investment Property Carrying Values (US$m) 2011 2012 Greater China 21,881 - Hong Kong 22,300 393 - Mainland China & Macau 984 Southeast Asia & Others 3,187 - Singapore 3,557 294 - Others 393 25,755 Total 27,234 Note: The analysis includes share of Joint Ventures & Associates 55
Properties Held for Sale - Carrying Values (US$m) 2011 2012 Greater China 130 - Hong Kong 83 1,228 - Mainland China & Macau 2,064 Southeast Asia & Others 1,157 - Singapore 1,525 13 - Others 10 2,528 3,682 (644) Pre-sale Proceeds (938) 1,884 Net Investment 2,744 Note: The analysis includes share of Joint Ventures & Associates 56
Gross Assets at 31 Dec 2012 By Activity Residential 11% By Location Mainland China 8% Macau 2% Southeast Asia 15% Commercial 89% Hong Kong 75% 57
Treasury Management Summary 2011 2012 Net debt (US$m) 2,359 3,273 Gearing 10% 13% Average tenor of debt (years) 6.8 6.9 Average interest cost 2.6% 2.7% Credit ratings - S & P - Moody s A- A3 A- A3 58
2012 Financing Activity US$837m notes issued (under MTN Programme) Total of US$880m in bank facilities raised - US$642m in bilateral facilities with multiple banks - US$238m project loan for MCL Land The US$642m bilateral facilities to be used to partially refinance US$968m syndicated facility expiring June 2013 59
Maturity Profile of Committed Facilities US$m 2,500 2,000 Bank Facilities (Drawn & Undrawn) Bonds 2 1,500 1,000 500-1 2,166 500 724 41 326 950 751 307 542 305 85 2013 2014 2015 2016 2017 2018+ Notes: (1) US$724m bank facilities due in 2013 have already been refinanced (2) Include bonds and notes issued under MTN Programme which are at face value 60
Liquidity at 31 Dec 2012 (All figures in US$bn) 2011 HK$ S$ US$ RMB Total 1 5.2 Committed lines 4.8 1.9 - - 6.7 3.3 Gross debt 3.0 1.3 - - 4.3 1.9 Available lines 1.8 0.6 - - 2.4 1.0 Cash 0.1 0.2 0.5 0.2 1.0 2.9 Available liquidity 1.9 0.8 0.5 0.2 3.4 2 Notes: (1) HK$ debt includes US$ debt swapped into HK$ (2) S$ debt includes HK$ debt swapped into S$ 61
Outlook Commercial portfolio in Hong Kong will continue to benefit from limited supply Three Singapore residential completions due in 2013 Growing contribution from China residential business expected from 2014 onwards Our strategy remains focused on premium property developments in Greater China and Southeast Asia 62