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View Annual Report ExperienceHysan annual report 2014 stock code 00014 Contents Overview The Essential Read and Why 1 4 Key Facts 4 Who We Are, How We Do Things, and Value Creation 6 A Balanced Portfolio 8 The Hysan Community 4 Key Facts about Hysan and its business 10 2014 Performance at a Glance 14 Chairman’s Statement 10 2014 financial and Financial Performance non-financial performance 2 20 Feature Stories: Creating a Unique and Satisfying 14 Experience (U.S.E.) for All Chairman’s 2014 review and outlook 24 The Marketplace 28 Management’s Discussion and Analysis 24 28 Strategy and Review of Results 2014 market conditions 29 Review of Operations 28 34 Financial Review 37 Treasury Policy Results highlights 42 Internal Controls and Risk Management Report 29 Review of our core leasing segments Responsible Business 34 3 50 Feature Stories: (i) Walking the Talk, and Report on financial position (ii) Supporting our People at Work and Beyond and management 54 Guiding Principle 56 Environment 37 64 Workplace Quality Prudent treasury policy 68 Health and Safety 70 Community Contributions 42 Risk controls and management Corporate Governance 48 74 Board of Directors Review of our sustainability 4 achievements 80 Corporate Governance Report 98 Directors’ Report 80 105 Directors’ Remuneration and Interests Report Governance structure and 113 Audit Committee Report the Board’s work in 2014 Financial Statements, 5 Valuation and Other Information 118 Directors’ Responsibility for the Financial Statements 119 Independent Auditor’s Report 120 Financial Statements 186 Five-Year Financial Summary Look out for these icons within 188 Report of the Valuer this report 189 Schedule of Principal Properties 191 Shareholding Analysis Read more content within 192 Shareholder Information this report 194 On The Stock Exchange of Hong Kong Limited’s Environmental, Social and Governance Reporting Guide Read more on our website Inside Corporate Responsibility Reporting Verification Statement www.hysan.com.hk Back Cover Experience Hysan This Annual Report follows an “integrated” approach by combining our financial and non-financial (environmental, social and governance) performance into one document. Underlying this is our belief that sustainable financial results are only achieved if we do things the right way. We have also improved the readability of this Report by enhancing the inter-connectivity of the various sections, including how we respond to the changing market environment in terms of managing our operations, finances, risks, as well as human talent. Feature stories are also used – all these towards bringing to life our theme, “Experience Hysan”. 2 We begin by stating who we are, how we do things and create value, as well as showcasing our portfolio. This section then highlights Hysan’s 2014 financial and non-financial performance, while our Chairman’s Statement details how Hysan responds successfully to changes in Hong Kong’s business environment. Overview 3 Overview Financial Performance Financial Responsible Business Responsible 4 Key Facts Corporate Governance 4 Who We Are, How We Do Things, and Value Creation 6 A Balanced Portfolio The Hysan Community 8 Financial Statements and Valuation and Statements Financial 10 2014 Performance at a Glance 14 Chairman’s Statement Hysan Annual Report 2014 4 Key Facts Who We Are How We Do Things Hysan Development is a leading property development, investment To be the PREMIER and management company Vision property company that based in Hong Kong. Hysan’s is superior to its peers in roots run deep in Causeway Bay, its market of choice. Hong Kong’s most vibrant commercial district. It has an investment property portfolio of approximately 4.1 million square Mission Provide our stakeholders feet of high quality retail, office with sustainable and and residential space, excluding outstanding returns from a property portfolio which properties under redevelopment. is strategically planned and It is one of the largest commercial managed by passionate, landlords in Causeway Bay. responsible and forward- looking professionals. Value Creation Retail Leasing Increase Yields Share Price through active management Financial Growth Office Leasing including tenant mix improvement Achievements Risk Adjusted increase earnings Total Return – (with area branding) and enhance net Steady and asset value Measured Growth Residential Leasing Asset Enhancement balancing Dividends longer-term projects with those that produce more immediate returns Supported by Strong Underlying Environment Employees Community Governance Non-Financial Achievements: Minimise our activities’ impact on the environment, Maintain good working Make positive contributions to Strong governance is the heart of and achieve higher efficiency at the same time environment to unleash potential communities where we operate long-term sustainable performance Continue strong focus in Causeway Bay and concurrently seek opportunities beyond our core portfolio 5 Revenue Growth 2004 – 2014 Overview Values HK$3,224 million 9% Compound Annual 35% Growth Rate Leadership 10.8% Performance Financial Excellence Empowerment 56% Good Citizenship HK$1,154 million Accountability 15% 45% Respect Driving / Driven 40% Retail Office Business Responsible Entrepreneurship 2004 2014 Residential Networking Sustainability Hysan’s successful asset enhancement and active management efforts ensured the Group’s revenue nearly tripled, on the basis of the same lettable floor area, between 2004 and 2014. Corporate Governance Value Creation Retail Leasing Increase Yields Share Price through active management Financial Growth Office Leasing including tenant mix improvement Achievements Risk Adjusted increase earnings Total Return – Financial Statements and Valuation and Statements Financial (with area branding) and enhance net Steady and asset value Measured Growth Residential Leasing Asset Enhancement balancing Dividends longer-term projects with those that produce more immediate returns Supported by Strong Underlying Environment Employees Community Governance Non-Financial Achievements: Minimise our activities’ impact on the environment, Maintain good working Make positive contributions to Strong governance is the heart of and achieve higher efficiency at the same time environment to unleash potential communities where we operate long-term sustainable performance Continue strong focus in Causeway Bay and concurrently seek opportunities beyond our core portfolio Hysan Annual Report 2014 6 Key Facts A Balanced Portfolio We have a well-balanced and quality portfolio comprising principally of retail and office segments. For retail, we strategically created a diversified and distinct retail portfolio with shops and eateries of different price points and style, catering to shoppers from different parts of the community, as well as overseas visitors. Our office portfolio is home to a well-balanced group of major international and local tenants. Overall Investment Properties Investment Properties (by Gross Floor Area excluding properties under redevelopment) (Turnover Contribution) Gross Floor Area Turnover 4.1 million sq. ft. (approx.) HK$3,224 million 17% Residential 9% Residential 35% 51% Office 56% Office 32% Retail Retail 7 A Retail Portfolio that Caters to All Overview Lee Theatre Hysan Retail Hub Place Each of the three hubs accounts for 35﹪ 36﹪ about one-third of the retail portfolio gross floor area. Hysan Place is the Performance Financial hip and trendy home of major flagship stores. The Lee Gardens hub 29﹪ provides elegant and luxury premium retail spaces for high-end brands. The Lee Theatre hub is home to urban fashion and lifestyle shops, Business Responsible as well as renowned restaurants. Lee Gardens Retail Hub An Office Portfolio for Different Businesses Corporate Governance 15.7% 21.6% Insurance Professional and Consulting High-end Retailers 14.2% Banking and Finance 4.7% Semi-retail Marketing 5.1% Information Technology Valuation and Statements Financial 5.9% Consumer Products 12.5% Others 9.0% 11.3% The top four industries in our office portfolio are insurance, professional and consulting, high-end retailers and banking and finance. They represent 53.7% of our office lettable floor area, but no category takes up more than 20% of the total lettable area. Hysan Annual Report 2014 8 Key Facts The Hysan Community For more information A unique work, lifestyle and shopping destination on our portfolios Grade “A” Residential SOGO CROSS Offices HARBOUR TUNNEL Lee Gardens Lee Theatre Retail Hub Retail Hub HENNESSY ROAD HYSAN PLACE Hysan Place BAMBOO GROVE PERCIVAL STREET YUN PING ROAD NORTH Mid-Levels POINT LEE GARDEN ROAD CENTRAL LEE GARDENS TWO/ CAROLINE Times THE LEE GARDENS/ Square LEE GARDENS ONE CENTRE LEE THEATRE PLAZA 18 HYSAN ONE HYSAN AVENUE AVENUE LEIGHTON HYSAN AVENUE CENTRE 111 Under LEIGHTON redevelopment ROAD LEIGHTON ROAD ABERDEEN TUNNEL Not to scale HYSAN PLACE LEE GARDENS TWO/CAROLINE CENTRE 500 Hennessy Road, Causeway Bay 28 Yun Ping Road, Causeway Bay Hysan Place includes 15 floors of Grade “A” This office and retail complex is offices and 17 floors of retail outlets. conveniently linked to the neighbouring Situated at the northern gateway of The Lee Gardens/Lee Gardens One. Hysan’s portfolio, Hysan Place offers full The Caroline Centre office tower is home harbour view offices, a shopping mall of to many international corporations, exciting tenant mix and green building whereas the shopping centre offers features that conform to the highest luxury fashion brands and a children’s international
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