Hongkong Land Holdings Limited

A warm welcome to those of you who are here with us at Centricity, as well as those of you joining online. I'm Michael Smith, the Group Chief Executive of Hong Kong Land, and with me is Craig Leedy, our CFO. Over the past six months, our focus was very much on sustaining the execution momentum we've built in the previous year. From delivering exciting openings from Tomorrow Central, to launching our inaugural private real estate fund in Singapore, to aligning our organisational structure to the goals set out in our strategic vision 2035.

We've all had a very busy first six months of 2026.

Now let me talk you through some of the details of what I just outlined as well as taking you through our interim financial results for 2026. We will have plenty of time for questions following the presentation. For those of you watching via the webcast, please send us your questions through the website and we will include them in the Q&A session. Here's the structure for today's presentation. Unless otherwise stated, all numbers quoted will be in US dollars, so let's get started. Turning to an overview of our 2026 interim results. The group's underlying earnings per share reached over 12 cents, up 14% from the prior period. Absolute underlying profit was $259 million, up 11%. This was driven primarily by lower net financing charges and stable operating results from our portfolios. Profit attributable to shareholders was $1.3 billion, up from $221 million in the first half of 2025, primarily due to an increase in the independent valuations of our portfolios. This increase in valuations, combined with our share buyback program, resulted in an NAV per share of $14.71 as at the end of June, up 3% compared to the end of 2025. Asset funder management reached $51.8 billion at the end of June, up 12% since the launch of our new strategy. On capital management, consolidated net debt declined by $200 million to $3.4 billion, as the group had meaningful cash inflows from capital recycling activities during the period. Finally, the board declared an interim dividend of $0.08 per share, reflecting the rebalancing of our annual dividend profile between interim and final dividends. For the last 15 years, our interim dividend has remained flat at $0.06 per share. Given our commitment to double dividends from $0.22 per share in 2023 to $0.44 per share in 2035, it was necessary to rebalance our dividend payments such that approximately 30% to 40% will be paid as an interim with the remainder in our final. This shift reflects the confidence we have in our underlying earnings. Turning over to key developments for the first half of the year. As many of you in Hong Kong will have seen, we welcomed a number of exciting new flagship openings. While the primary focus for Tomorrow Central is to deliver a new shopping experience for our retail customers, we have not neglected our office tenants. Their needs to connect with their clients and their business partners. At Landmark, we have refreshed the office lobbies of Edinburgh Tower and Gloucester Tower, so we've moved those lobbies from the third to the fourth floor, whilst also delivering new F&B offerings and office tenant amenities. The landmark Mandarin has also been reopened to customers on the 1st of June with a new arrival experience and refreshed guest rooms. In Singapore, we successfully launched our first private fund, SC Press, in February alongside our founding investors, Qatar Investment Authority and APG. At Westbourne in Shanghai, the group unveiled The Terrace, a 27,000 square meter retail quarter with over 70 designer lifestyle brands and F&B outlets. We also launched an additional 337 rental apartment units, increasing the scale of our service department operations to now close to 700 units. At the China Integrated Properties portfolio, much of our efforts in the first half were devoted to building operational momentum on the projects we launched in 2025. Our ongoing work on asset optimisation is beginning to deliver real positive results. Finally, many of you may recall from our 2025 annual results presentation that we'll be working on an organisational redesign to implement a portfolio-led operating model, which I will provide an update on later. Overall, we are aiming to deliver annualised cost savings on existing operations of at least $25 million from 2027 onwards. Turning to an update of our strategic vision 2035. Back in 2024, we set a new direction for Hong Kong land, focused on what we would need to do to consistently deliver top quartile TSR over a sustained period. The simple answers were to deliver earnings growth and make more efficient use of our capital. While we may not achieve these ambitions overnight, we wanted to reposition the business towards achieving these targets over the mid to long term. On our desire to grow underlying PBIC, we believe earnings bottomed in 2025. We're now clearly focused on capturing growth across existing portfolios, delivering on pipeline projects, as well as active pursuit of opportunities to deploy our capital. On doubling dividends per share to 44 cents by 2035, the group has delivered a 14% increase in full year DPS to 25 cents in 2025. Asset under management has grown by 12% compared to when our new strategy was first announced, reaching $51.8 billion. We intend to further grow AUM via asset enhancements at existing portfolios over time and leveraging third-party capital to pursue growth investments. And finally, on capital recycling, cumulative net proceeds generated amounted to $3.7 billion at the end of June. We're now at 93% of our 2027 minimum target. The group continues to work on a number of opportunities in recycled capital and are confident of exceeding the $4 billion minimum target We originally set ourselves by N27, but I think hopefully we can achieve that by end of this year. Turning now to provide more colour, literally, as you can see, on the latest happenings in the first half of the year across the group. Hong Kong Land's philosophy has always been about curating and strengthening our ecosystems. This goes back to our belief that experience to be truly central, the entire ecosystem, is more valuable if it's experiential than the sum of the parts. While the Tomorrow Central initiative is focused primarily on creating rehoused spaces for the future, we have not forgot about elevating the experience of our office tenant community. In the first half of the year, we launched the transformed office lobbies of both Edinburgh and Gloucester Tower. The refreshed spaces also feature an expanded array of F&B outlets and amenities catering to the needs of our office tenants.