2018/2019 Interim Results Presentation 14 November 2018 We Link - PowerPoint PPT Presentation

2018/2019 Interim Results Presentation 14 November 2018

We Link People Financial Review to a Brighter Future

We Link People to a Brighter Future TO BE A WORLD CLASS REAL ESTATE INVESTOR AND MANAGER… …SERVING AND IMPROVING THE LIVES OF THOSE AROUND US P.3

Our Value Creation Model P.4

Resilient Portfolio, Sustainable Business • Currently conducting portfolio review Active Management to • Professional Asset Management team tailoring asset Capture Growth plans for sustainable growth Opportunities • Solid capital management and best-in-class corporate governance • Portfolio Management to focus on future investment directions including scope, locations and asset types • Asset Management to develop a unique Link Asset Management Model for retail properties, office and fresh Four Areas of markets Management Focus • Technology to deploy to create new opportunities and (new taskforces set up since enhance analytics April 18) • HR-PR-IR to align and fortify Link’s engagement with internal and external stakeholders P.5

Strong Team to Steer Future Directions Expansion of Strengthen Leadership Management Bandwidth and Talent Development • • Chief Executive Officer Expanded Mainland China who has overall leadership responsibility for Link team to operate the three existing assets in Beijing, • Chief Operating Officer Shanghai and Guangzhou to execute Link’s strategic plans and ensure • smooth operations Management development programmes to identify and • Chief Financial Officer enhance management and to spearhead the finance, treasury & insurance, leadership capabilities risk management and research & data analytics functions • Chief Strategy Officer to develop, communicate, execute and sustain corporate strategic initiatives P.6

Sustainability through Engagement and Advocacy Engagement Advocacy • Memberships • Hosted annual CONNECTION Conference for large and small tenants, suppliers, contractors and staff • Promoted exchange of ideas, business priorities and challenges, and fostered mutual understanding • Leadership in developing application of TCFD and shared values (Task Force on Climate-Related Financial Disclosures) in real estate sector • Focus on 3 UN Sustainable Development Goals with specific actions and targets P.7

Delivering Positive Outcomes for All Stakeholders Environmental Contribution Link Together Initiatives Food Donation Reduction in energy since 2010 Amount earmarked Surplus food donated by market tenants (1) 28.7% 108.2 HK$14.4M tonnes (2) 48.2 tonnes HK$10.2M 26.5% 2016/2017 2018/2019 2016/2017 2018/2019 2016/2017 1H2018/2019 Tenant Academy Gender Diversity Public Image No. of participants to date Women Representation on Board of Annual perception audit result (3) Directors ~19,000 96% 31% 31% ~18,000 62% 2016/2017 1H2018/2019 Mar 2017 Sep 2018 2016/2017 2017/2018 Notes: (1) Full year projection figure excluding any properties acquired, divested and/or newly operational (as applicable) during the periods under analysis. (2) Unaudited figure. (3) Represent the percentage of respondents with neutral to positive perception of Link. P.8 (4) Latest available data as at 30 September 2018.

Financial Review Financial Overview

Continuous Efforts Driving Valuation Growth Portfolio mix (1) 3.4% 4.8% Weighted average capitalisation rate (3) 69.8% 4.7% Hong Kong Mainland China Hong Kong 17.3% Retail Retail 4.50% - 4.75% 3.98% 91.8% Car park 4.14% Office 4.25% Mainland China Office (2) 8.2% - HK$210B NAV per unit HK$85.41 Total portfolio value +2.8% (4) +3.3% (4) Notes: (1) By valuation as at 30 September 2018. (2) Hong Kong office is under development and is valued using residual method. (3) Represents net capitalisation rate. (4) Compare to March 2018. P.10

Strong Underlying Performance Six months ended Like-for-like 30 Sep 2018 growth (1) (HK$’M) YoY Revenue 4,930 (2) -0.4% +7.4% Net property income 3,759 (3) -0.2% +6.9% NPI margin 76.2% +0.1% -0.4% Distribution per unit 130.62 (4) +7.5% (HK cents) Notes: (1) Excluding any properties acquired, divested and/or newly operational (as applicable) during the periods under analysis. (2) Includes revenue of HK$490M (2017: HK$399M) from Mainland China portfolio. (3) Includes net property income of HK$390M (2017: HK$ 310M) from Mainland China portfolio. (4) 2,111,986,754 units in issue as at 30 September 2018 (31 March 2018: 2,150,058,972 units). P.11

Robust Financial Position Fixed rate debt/ Total Bank loans total debt debt 33% HK$7.5B 69.7% HK$22.7B MTN Average fixed rate 67% debt maturity HK$15.2B 5.2 years Effective Gearing Credit interest rate ratio ratings A/Stable S&P 3.19% 10.3% A2/Stable Notes: Moody’s (1) All figures as at 30 September 2018. (2) All amounts are at face value. P.12

Financial Review Organic Portfolio

Hong Kong Operating Landscape: Hong Kong Economy Solid median monthly household income growth Sound +3.5% GDP growth (YoY) (YoY) 2Q 2018, YoY 16% 12% Unemployment rate remained low 8% +2.8% +5.8% 3Q 2018, YoY 4% +3.1% Healthy 0% non-discretionary 2Q 2014 2Q 2015 2Q 2016 2Q 2017 2Q 2018 retail sales and restaurant receipts +4.2% Overall Public Rental Housing growth 3Q 2018, YoY Source: Census & Statistics Department, Transport Department P.14

Hong Kong Operating Landscape: Resilient Non-discretionary Trades Year-on-Year Change of Retail Sales Value & Restaurant Receipts Value 60% Foods & alcoholic Global financial crisis drinks 50% 40% Supermarkets 30% Tech bubble burst Restaurant 20% receipts 10% Jewellery 0% -10% Department stores -20% SARS outbreak Clothing -30% Asian financial crisis -40% 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 1Q- 1Q-3Q18 3Q 18 Source: Census & Statistics Department P.15

Hong Kong Operating Landscape: Car Park Demand Still Outpaces Supply No. of Registration of Vehicles and Private Car Demand and Supply (YoY) Parking Spaces (Private Cars) 673,246 5.4% 613,191 613,065 4.6% 4.1% 3.1% 2.7% 2.0% 2.0% 406,995 0.8% 0.8% 0.5% 0.3% 0.3% 2013 2014 2015 2016 2017 3Q18 No. of parking spaces No. of private car parking spaces No. of licensed No. of private car license No. of registration of private cars Source: Transport Department, Legislative Council - Panel on Transport P.16

Hong Kong Retail Portfolio: Continuous Resilient Performance Retail rental Reversion rate ( HK$’M) +6.6% 22.5% -4.3% YoY -1.7% Occupancy 95.5% 3,324 3,268 3,215 -1.5% vs Mar 18 3,015 Average unit rent Sep-17 Sep-18 Sep-17 Sep-18 HK$65.7 psf Like-for-like (1) Actual +5.3% vs Mar 18 Notes: (1) Excluding any properties acquired, divested and/or newly operational (as applicable) during the periods under analysis. (2) All figures for the six months ended 30 September 2018 except otherwise stated. P.17

Hong Kong Carpark Portfolio: Steady Growth in Income and Valuation Car park rental ( HK$’M) Car park income per +10.0% space per month HK$2,706 +9.9% YoY -3.3% Average valuation 1,022 988 988 898 per space HK$595K Sep-17 Sep-18 Sep-17 Sep-18 +4.9% vs Mar 18 Like-for-like (1) Actual Notes: (1) Excluding any properties acquired, divested and/or newly operational (as applicable) during the periods under analysis. (2) All figures for the six months ended 30 September 2018 except otherwise stated. P.18

Hong Kong Retail Portfolio: Dominated by Non-discretionary Trades Trade mix (as at Sep-18) Sep-18 Mar-18 1. Food and beverage 27.9% 27.6% 8 1 2. Supermarket and foodstuff 21.6% 21.9% 3. Markets/ cooked food stalls 14.3% 14.6% 7 6 By 4. Services 10.7% 10.5% 5 Food and monthly rent beverage 5. Personal care/ medicine 5.7% 5.8% 2 4 Personal care / 6. Education/ welfare and ancillary 0.9% 0.9% Medicine 7. Valuable goods (jewellery, 0.9% 0.8% Services 3 watches and clocks) 8. Others (1) 17.9% 18.0% 63.8% Total 100% 100% Food related trades Note: P.19 (1) Include clothing, department store, electrical and household products, optical, books and stationery, newspaper, leisure and entertainment.

Hong Kong Retail Portfolio: Tenants Performance in 1H2018/2019 Growing tenant sales (1) Healthy rent-to-sales ratio (2) 13.3% +7.2% (YoY) 11.2% 14.5% 9.7% 13.6% 13.3% 8.7% 12.0% 8.0% 7.2% 6.1% 3.8% 3.1% (3) (3) (3) Food & Supermarkets General retail Overall Food & Supermarkets General retail Overall beverage & foodstuff beverage & foodstuff Apr – Sep 18 (Link) Apr – Sep 18 Apr – Sep 18 (Hong Kong) Notes: (1) Percentage figures represent year-on- year change in tenants’ average monthly sales per square foot of the respective periods. (2) A ratio of base rent plus management fee to tenants’ gross sales. (3) Including clothing, department store, electrical and household products, personal care/medicine, optical, books and stationery, newspaper, valuable goods, services, leisure and entertainment, and retail others. P.20