With the opening of Taikoo Hui in Guangzhou in early 2009, we will have a high-grade investment property portfolio of over 19 million square feet.
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3WIRE 0ROPERTIES PORTFOLIO IN (ONG +ONG PRINCIPALLY COMPRISES OFlCE AND RETAIL PREMISES IN PRIME LOCATIONS AS WELL AS SERVICED APARTMENTS HOTEL INTERESTS AND OTHER LUXURY RESIDENTIAL ACCOMMODATION 4HE COMPLETED PORTFOLIO TOTALS MILLION SQUARE FEET OF GROSS mOOR AREA #URRENT PROPERTY PENDING OR UNDER DEVELOPMENT IN (ONG +ONG COMPRISES A FURTHER MILLION SQUARE FEET MAINLY OF OFlCE SPACE )N -AINLAND #HINA 3WIRE 0ROPERTIES HAS A INTEREST IN 4AIKOO (UI A FOREIGN JOINT VENTURE COMPANY WHICH IS CONSTRUCTING A FOUR MILLION SQUARE FOOT MIXED USE COMMERCIAL DEVELOPMENT IN 'UANGZHOU TO BE MANAGED BY 3WIRE 0ROPERTIES AS WELL AS A INTEREST IN THE #)4)# 3QUARE DEVELOPMENT IN 3HANGHAI )N THE 5NITED 3TATES 3WIRE 0ROPERTIES OWNS A INTEREST IN THE -ANDARIN /RIENTAL (OTEL IN -IAMI &LORIDA
3WIRE 0ROPERTIES TRADING PORTFOLIO COMPRISES LAND AND APARTMENTS UNDER DEVELOPMENT IN (ONG +ONG AND -IAMI &LORIDA 4HE COMPANY HAS SOLD SUBSTANTIALLY ALL ITS INVENTORY OF RESIDENTIAL APARTMENTS
0ROPERTY $IVISION .OTE (+- (+- 4URNOVER 'ROSS RENTAL INCOME DERIVED FROM /FlCES 2ETAIL 2ESIDENTIAL .ON RECURRING GROSS RENTAL INCOME /FlCES n 2ETAIL n /THER INCOME 0ROPERTY INVESTMENT 0ROPERTY TRADING 3ALE OF INVESTMENT PROPERTIES 4OTAL TURNOVER /PERATING PROlT DERIVED FROM 0ROPERTY INVESTMENT 0ROPERTY TRADING 3ALE OF INVESTMENT PROPERTIES 6ALUATION GAINS ON INVESTMENT PROPERTIES n CHANGE IN FAIR VALUE n TRANSFERRED TO lNANCE COST n WRITE BACK OF OVER PROVISION FOR LAND PREMIUM n 4OTAL OPERATING PROlT 3HARE OF POST TAX PROlTS FROM JOINTLY CONTROLLED AND ASSOCIATED COMPANIES .ORMAL OPERATIONS .ON RECURRING ITEMS n !TTRIBUTABLE PROlT .OTES /THER INCOME IS MAINLY ESTATE MANAGEMENT FEES 2EFER TO .OTE IN &INANCIAL 2EVIEW SECTION ON PAGE 2EFER TO .OTE IN &INANCIAL 2EVIEW SECTION ON PAGE 2EFER TO .OTE IN &INANCIAL 2EVIEW SECTION ON PAGE 2EVIEW OF /PERATIONS 0ROPERTY $IVISION
4HE ATTRIBUTABLE PROlT IN THE TABLE ON PAGE REmECTS THE ADOPTION OF (ONG +ONG !CCOUNTING 3TANDARD h(+!3v h)NVESTMENT PROPERTYv 0ARTICULARS OF THE STANDARD AND ITS IMPACT ON THE DIVISIONS RESULTS ARE SET OUT IN THE &INANCIAL 2EVIEW 3ECTION ON PAGES TO AND .OTE A TO THE !CCOUNTS ON PAGE 4HE UNDERLYING PROlT OF THE DIVISION WHICH EXCLUDES THE IMPACT OF ADOPTING (+!3 AND )NTERPRETATION h(+!3 )NTv IS SHOWN BELOW (+- (+-
!TTRIBUTABLE PROlT 0ROlT ON SALE OF INVESTMENT PROPERTIES 6ALUATION GAINS FROM SUBSIDIARIES n CHANGE IN FAIR VALUE n TRANSFERRED TO lNANCE COST n WRITE BACK OF OVER PROVISION FOR LAND PREMIUM n 3HARE OF VALUATION GAINS FROM *## AND !SSOCIATES /THERS 4AXATION -INORITY INTERESTS 5NDERLYING PROlT
.ET RENTAL INCOME 6ALUATION OF INVESTMENT PROPERTIES
(+- (+-
#OMPLETED 5NDER DEVELOPMENT
/PERATING PROFIT BEFORE NON RECURRING ITEMS &LOOR AREA OF PROPERTY PORTFOLIO
#OMPLETED (+- SQFT
ON COMPLETION
0ROPERTY INVESTMENT 3ALE OF INVESTMENT /FFICE 4ECHNO CENTRES (OTELS PROPERTIES 0ROPERTY TRADING 2ETAIL 2ESIDENTIAL
SWIRE PACIFIC 2005 ANNUAL REPORT
One Pacific Place 863,266 sf The Atrium 173,999 sf
Two Pacific Place Festival Walk Tower 695,510 sf 232,215 sf enue Queensway Tat Chee Av Parkside 443,075 sf JW Marriott 525,904 sf
e v ri The Mall D 711,182 sf Three Pacific Place stice 621,530 sf Ju Festival Walk (Mall) 981,303 sf et e tr Island Shangri-La S ng 605,728 sf u F Conrad g 540,115 sf in Kowloon Tong W KCR/MTR Interchange
Supre m e C ourt Ro ad Pacific Place Festival Walk
Not to scale. For identification purposes only.
New Territories
Kowloon
MTR Routes KCR Routes MTR Interchange MTR/KCR Interchange Airport Express Routes MTR Station Quarry Bay Tai Koo Future Development Admiralty Hong Kong Island
Lincoln House 333,350 sf Somerset House Cityplaza Four 923,356 sf Cityplaza Three 556,427 sf PCCW Tower 447,709 sf Dorset House Cambridge House (20% interest) 609,540 sf Devon House 268,793 sf 620,148 sf 803,448 sf
Cornwall House 334,936 sf Warwick House Oxford House Taikoo Wan Road 552,537 sf 501,249 sf Cityplaza One (Phase 2) 446,107 sf Hotel Cityplaza Cityplaza (Mall) 199,640 sf 1,105,227 sf
One Island East K Pan Hoi Street ing’ 1,522,128 sf
s R oa d d oa R
s d Cityplaza One
an l t 628,785 sf s TaiKoo Place e Cityplaza W
11 2EVIEW OF /PERATIONS 0ROPERTY $IVISION
0ROPERTY PORTFOLIO GROSS mOOR AREA @ SQUARE FEET 4OTAL 2ETAIL /FlCE 4ECHNO CENTRES 2ESIDENTIAL (OTELS ,OCATION #OMPLETED 0ACIlC 0LACE n 4AI+OO 0LACE n n n #ITYPLAZA n n n &ESTIVAL 7ALK n n n /THERS n n n (ONG +ONG n -AINLAND #HINA n n n n 5NITED 3TATES n n n n 4OTAL COMPLETED 5NDER AND PENDING DEVELOPMENT n (ONG +ONG n n n -AINLAND #HINA n n 4OTAL
/6%26)%7 /PERATING PROlT FROM PROPERTY TRADING REPRESENTS PRINCIPALLY 4HE (ONG +ONG PROPERTY MARKET HAS BENElTED SIGNIlCANTLY PROlTS BOOKED ON THE COMPLETION OF UNITS AT 4HE #ARBONELL FROM THE IMPROVED ECONOMY DURING $EMAND FOR OFlCE IN THE 5NITED 3TATES TOGETHER WITH PROlTS FROM THE CLOSING SPACE HAS INCREASED AND THE ABSENCE OF SIGNIlCANT NEW OF REMAINING UNITS AT *ADE 2ESIDENCES IN THE lRST HALF OF THE SUPPLY HAS CAUSED OFlCE RENTS TO RISE SHARPLY AND VACANCY YEAR )N ADDITION TWO OFlCE mOORS AT )SLAND 0LACE IN .ORTH TO DROP 2ETAIL RENTS HAVE RISEN STEADILY WITH TOURISM FROM 0OINT WERE SOLD IN !UGUST -AINLAND #HINA CONTINUING TO BENElT SALES PARTICULARLY IN CERTAIN RETAIL SECTORS THOUGH DOMESTIC DEMAND HAS ALSO 4HE REMAINING APARTMENTS AND SOME CAR PARKS AT 4HE CONTINUED TO IMPROVE !LBANY WERE SOLD DURING THE YEAR
2ECURRING GROSS RENTAL INCOME FROM THE INVESTMENT PORTFOLIO )NVESTMENT 0ROPERTIES AMOUNTED TO (+ MILLION IN COMPARED WITH /FlCES (+ MILLION IN REmECTING INCREASES THROUGHOUT 4HE OFlCE MARKET WAS CONSIDERABLY STRONGER IN THE PORTFOLIO AS A CONSEQUENCE OF INCREASED DEMAND AND A LIMITED AMOUNT OF NEW SUPPLY 2ECURRING GROSS RENTAL INCOME FROM 4HE RESULT FOR THE YEAR INCLUDES NON RECURRING GROSS RENTAL THE OFlCE PORTFOLIO WAS HIGHER IN THAN IN INCOME OF (+ MILLION REPRESENTING A CHANGE IN THE 2EVERSIONARY RENTALS ON NEW TENANCIES AND LEASE RENEWALS ACCOUNTING TREATMENT FOR RENT FREE PERIODS )N PRIOR YEARS WERE HIGHER FROM AROUND THE MIDDLE OF THE YEAR /CCUPANCY RENT FREE PERIODS WERE ACCOUNTED FOR ON A CASH BASIS AS THEY LEVELS IMPROVED SIGNIlCANTLY AND AT THE YEAR END AVERAGED OCCURRED IN INDIVIDUAL LEASES 7ITH EFFECT FROM ST *ANUARY FOR THE OFlCE PORTFOLIO COMPARED TO AT THE END THESE RENT FREE PERIODS ARE RECOGNISED EVENLY OVER THE OF COMMITTED TERMS OF INDIVIDUAL LEASES 4HE EFFECT OF THIS TREATMENT IS TO BRING INTO INCOME IN (+ MILLION WHICH WOULD OTHERWISE HAVE BEEN RECOGNISED IN FUTURE YEARS
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2ETAIL 2ESIDENTIAL )NVESTMENT 0ORTFOLIO 4HE 3WIRE 0ROPERTIES RETAIL PORTFOLIO CONTINUED TO PERFORM 4HE RESIDENTIAL PORTFOLIO COMPRISES MAINLY 4HE !TRIUM AND WELL DURING 'ROSS RENTAL INCOME FOR THE YEAR WAS 0ARKSIDE SERVICED SUITES AT 0ACIlC 0LACE 2EFURBISHMENT OF THE HIGHER THAN THAT OF 2ETAIL SALES AT 3WIRE 0ROPERTIES SUITES AT 0ARKSIDE WAS COMPLETED DURING /CCUPANCY THREE PRINCIPAL SHOPPING MALLS WERE HIGHER AND THESE CENTRES OF THE AVAILABLE SERVICED SUITES HAS BEEN LOWER IN THE SECOND REMAIN FULLY LET #ITYPLAZA 4HE -ALL AT 0ACIlC 0LACE AND HALF OF THE YEAR LARGELY DUE TO INCREASED COMPETITION IN THE &ESTIVAL 7ALK TOGETHER WELCOME MORE THAN TEN MILLION VISITORS MARKET 4HE REMAINING RESIDENTIAL PROPERTIES ON (ONG +ONG EACH MONTH )SLAND WERE FULLY LET
#ITYPLAZA IS THE PRIMARY DESTINATION FOR SHOPPERS IN )SLAND )NVESTMENT 0ROPERTIES UNDER $EVELOPMENT %AST 5NY 7ING /N -ARKS 3PENCER AND 5! #INEMAS ARE 7ORK WILL COMMENCE SHORTLY ON THE MAIN CONTRACT FOR AMONG THE MAJOR ANCHOR TENANTS OTHER TENANTS COMPRISE OVER THE CONSTRUCTION OF /NE )SLAND %AST AN OFlCE BUILDING OF RETAIL AND CATERING OUTLETS AND THE #ITYPLAZA )CE 0ALACE APPROXIMATELY SQUARE FEET AT 7ESTLANDS 2OAD TOGETHER TOTALLING JUST OVER SQUARE FEET DUE FOR COMPLETION IN
4HE -ALL AT 0ACIlC 0LACE IS THE PRE EMINENT SHOPPING MALL 6ALUATION OF )NVESTMENT 0ROPERTIES IN (ONG +ONG 3EIBU 'REAT &OOD (ALL AND ,ANE #RAWFORD 4HE PORTFOLIO OF INVESTMENT PROPERTIES WAS VALUED AT ST ARE THE ANCHOR TENANTS TOGETHER WITH OTHER RETAIL AND $ECEMBER BY $EBENHAM 4IE ,EUNG !S A RESULT OF CATERING OUTLETS AMOUNTING TO APPROXIMATELY THIS VALUATION 3WIRE 0ROPERTIES OPERATING PROlT INCREASED SQUARE FEET ,ANE #RAWFORD WAS CLOSED FOR REFURBISHMENT BY (+ MILLION 4HE INCREASE IN LARGELY REmECTS FOR APPROXIMATELY THREE MONTHS IN THE SECOND HALF OF THE RECOVERY IN OFlCE RENTAL LEVELS AND BENCHMARKS SET BY 4HE CINEPLEX AT 0ACIlC 0LACE CLOSED FOR RECONlGURATION AND RECENT TRANSACTIONS IN THE MARKET 0ARTICULARS OF THE PROPERTIES REFURBISHMENT AT THE END OF *ANUARY AND WILL RE OPEN IN (ONG +ONG AND THE 53! BOTH FOR INVESTMENT AND IN THE FOURTH QUARTER OF THIS YEAR DEVELOPMENT FOR SALE ARE SET OUT ON PAGES TO
&ESTIVAL 7ALK A MAJOR SHOPPING CENTRE IN +OWLOON WAS 4AIKOO 3HING !RBITRATION JOINTLY OWNED BY 3WIRE 0ROPERTIES AND #)4)# 0ACIlC UNTIL 4HE CLAIM BY THE (ONG +ONG 3!2 'OVERNMENT ,ANDS RD -ARCH AND WHOLLY OWNED BY 3WIRE 0ROPERTIES $EPARTMENT FOR LAND PREMIUM IN RELATION TO THE #ITYPLAZA FROM THAT DATE !NCHOR TENANTS INCLUDE 4ASTE -ARKS &OUR #ITYPLAZA 4HREE AND #ITYPLAZA /NE OFlCE TOWERS WAS 3PENCER 0AGE /NE "OOKS AND THE !-# #INEMA PLUS OVER UPHELD IN AN ARBITRATION AWARD ANNOUNCED IN *ANUARY OTHER RETAIL AND CATERING OUTLETS AND THE 'LACIER ICE RINK )N *ULY THE #OURT OF &INAL !PPEAL REFUSED TO GRANT 3WIRE TOGETHER COMPRISING OVER SQUARE FEET 0ROPERTIES LEAVE TO APPEAL ON A POINT OF LAW &OLLOWING A FRESH HEARING HELD IN &EBRUARY THE ARBITRATOR DETERMINED THAT /N RD -ARCH 3WIRE 0ROPERTIES COMPLETED THE THE VALUATION DATES FOR THE PURPOSE OF QUANTIFYING THE AMOUNT ACQUISITION OF #)4)# 0ACIlCS INTEREST IN &ESTIVAL 7ALK FOR OF LAND PREMIUM ON THE OFlCE TOWERS SHOULD BE THE DATES A CONSIDERATION OF (+ MILLION ON WHICH OCCUPATION PERMITS WERE ISSUED FOR EACH OF THE BUILDINGS AND THAT INTEREST SHOULD BE CALCULATED AT TWO THIRDS 4HE #ITYGATE RETAIL CENTRE AT 4UNG #HUNG IN WHICH 3WIRE OF ()")$ FROM THOSE VALUATION DATES 0ROPERTIES HAS A INTEREST IS BEING REPOSITIONED AS AN OUTLET MALL FOR INTERNATIONAL BRANDS AND A NUMBER OF NEW TENANCIES HAVE BEEN SECURED
2EVIEW OF /PERATIONS 0ROPERTY $IVISION
3WIRE 0ROPERTIES AND THE ,ANDS $EPARTMENT ENTERED 0ROPERTY 4RADING 0ORTFOLIO INTO DISCUSSIONS TO SETTLE LAND PREMIUM lGURES FOR THE 4HE PORTFOLIO OF DEVELOPMENTS FOR SALE COMPRISES SUBSTANTIALLY #ITYPLAZA OFlCE TOWERS AT THE RESPECTIVE VALUATION DATES RESIDENTIAL APARTMENTS IN THE 53! 4HERE IS CURRENTLY NO 4HOSE DISCUSSIONS CONCLUDED DURING THE COURSE OF THE YEAR INVENTORY OF COMPLETED UNITS IN (ONG +ONG AND THE AMOUNT OF LAND PREMIUM WAS AGREED TO BE (+ MILLION 3WIRE 0ROPERTIES HAS BEEN APPOINTED AS DEVELOPER OF A SITE OWNED BY A SUBSIDIARY OF #HINA -OTOR "US ON *AVA 2OAD )NTEREST FROM THE RELEVANT VALUATION DATES TO THE DATE OF .ORTH 0OINT 3WIRE 0ROPERTIES WILL BE ENTITLED TO REIMBURSEMENT PAYMENT OF THE AGREED PREMIUM WAS CALCULATED TO BE OF COSTS AND A SHARE OF SALES PROCEEDS UNDER THE TERMS OF THIS (+ MILLION OF WHICH (+ MILLION WAS CHARGED APPOINTMENT )T IS ESTIMATED THE PROJECT WILL BE COMPLETED TO THE PROlT AND LOSS ACCOUNT IN AND THE BALANCE OF IN (+ MILLION IN 4HE TOTAL AMOUNT OF PREMIUM AND INTEREST PAYABLE IN RELATION TO THE #ITYPLAZA OFlCE TOWERS $EMOLITION WORK HAS COMMENCED AT ! n % 3EYMOUR 2OAD WAS THEREFORE (+ MILLION 3WIRE 0ROPERTIES MADE IN -ID ,EVELS WHERE 3WIRE 0ROPERTIES HAS A CONTROLLING STAKE A PAYMENT ON ACCOUNT OF PREMIUM TO 'OVERNMENT IN AN IN THIS SITE WITH REDEVELOPMENT POTENTIAL OF APPROXIMATELY AMOUNT OF (+ MILLION IN !UGUST ! FURTHER SQUARE FEET 4HIS DEVELOPMENT WILL PROCEED ONCE PAYMENT OF (+ MILLION WAS MADE IN !UGUST OUTSTANDING APPROVALS HAVE BEEN OBTAINED REPRESENTING THE BALANCE OF PREMIUM AND INTEREST ! FORMER BUS DEPOT SITE ON 7ONG #HUK (ANG 2OAD !N AMOUNT OF (+ MILLION WAS CHARGED AGAINST !BERDEEN IS OWNED BY 3WIRE 0ROPERTIES AND #HINA THE PROPERTY VALUATION RESERVE IN THE 3WIRE 0ACIlC GROUP -OTOR "US 4HE SITE HAS AN INDUSTRIAL DEVELOPMENT POTENTIAL ACCOUNTS FOR THE YEAR ENDED ST $ECEMBER IN RELATION OF SQUARE FEET #ONSIDERATION IS BEING GIVEN TO TO THE #ITYPLAZA OFlCE TOWERS 4HIS COMPARES WITH THE ALTERNATIVE USES TOTAL AMOUNT NOW PAID OF (+ MILLION 4HE BALANCE OF (+ MILLION REMAINING FROM THE PROVISION MADE IN (OTELS WAS CREDITED TO THE PROlT AND LOSS ACCOUNT IN 3WIRE 0ROPERTIES HAS A INTEREST IN EACH OF THE *7 0RIOR TO THIS AMOUNT OF OVERPROVISION WOULD HAVE BEEN -ARRIOTT #ONRAD (ONG +ONG AND )SLAND 3HANGRI ,A HOTELS AT CREDITED TO THE GROUPS PROPERTY VALUATION RESERVE &OLLOWING 0ACIlC 0LACE RESULTS OF WHICH HAVE IMPROVED DURING THE YEAR THE GROUPS ADOPTION OF THE NEW (ONG +ONG !CCOUNTING WITH BOTH HIGHER OCCUPANCY LEVELS AND ROOM RATES 3TANDARDS FOR THE YEAR COMMENCING ST *ANUARY PROPERTY VALUATION MOVEMENTS HAVE BEEN SHOWN AS PART OF 4HE .OVOTEL #ITYGATE A ROOM HOTEL IN WHICH 3WIRE THE GROUPS OPERATING PROlT FOR THE YEAR 0ROPERTIES HAS A INTEREST HAS BEEN COMPLETED AND WILL OPEN AT THE END OF THE lRST QUARTER OF
0LANNING APPROVAL HAS BEEN OBTAINED TO BUILD A ROOM HOTEL ON THE SITE FORMERLY KNOWN AS #ITYPLAZA 4WO #ONSTRUCTION WORK IS EXPECTED TO COMMENCE SHORTLY WITH (OTEL #ITYPLAZA SCHEDULED FOR COMPLETION AT THE END OF
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4HE ROOM -ANDARIN /RIENTAL (OTEL IN -IAMI WHICH /UTLOOK IS OWNED BY THE GROUP CONTINUED TO REPORT IMPROVED 3WIRE 0ROPERTIES WILL CONTINUE TO SEEK OPPORTUNITIES OPERATING PROlTS AS A RESULT OF INCREASED OCCUPANCY AND IN MAJOR CITIES ON THE -AINLAND FOR FURTHER PROJECTS OF THE ROOM RATES SCALE AND NATURE OF 4AIKOO (UI IN 'UANGZHOU
-AINLAND #HINA )N (ONG +ONG THE DEVELOPMENT OF /NE )SLAND %AST AS A 7ORK HAS COMMENCED AT THE 4AIKOO (UI MIXED USE MAJOR ADDITION TO THE COMMERCIAL PORTFOLIO WILL BE A PRIMARY DEVELOPMENT IN 'UANGZHOU #OMPLETION OF THIS FOUR MILLION FOCUS IN )N RESIDENTIAL TRADING THE COMPANY WILL PURSUE SQUARE FOOT DEVELOPMENT INCLUDING MILLION SQUARE FEET QUALITY PROJECTS OF THE TYPE IN WHICH IT HAS ESTABLISHED OF PRIME SHOPPING SPACE TWO OFlCE TOWERS TWO HOTELS AND A STRONG TRACK RECORD A CULTURAL CENTRE IS NOW SCHEDULED FOR COMPLETION IN EARLY )N THE 5NITED 3TATES 3WIRE 0ROPERTIES INTENDS TO BUILD FURTHER ON ITS REPUTATION FOR DEVELOPING HIGH QUALITY RESIDENTIAL 3WIRE 0ROPERTIES HAS A INTEREST IN #)4)# 3QUARE ON APARTMENTS IN 3OUTH &LORIDA .ANJING 2OAD 7EST 3HANGHAI 4HE BUILDING COMPRISES MILLION SQUARE FEET OF RETAIL AND OFlCE SPACE AND IS LET +EITH ' +ERR 53! #ONSTRUCTION OF 4HE #ARBONELL A UNIT CONDOMINIUM TOWER ON "RICKELL +EY -IAMI WAS COMPLETED DURING THE YEAR !LL APARTMENTS HAVE BEEN SOLD AND AT THE END OF $ECEMBER UNITS HAD BEEN HANDED OVER TO PURCHASERS WITH PROlTS RECOGNISED ON THOSE UNITS 4HE BALANCE OF THESE UNITS IS EXPECTED TO BE HANDED OVER IN THE lRST HALF OF !LL REMAINING UNITS AT *ADE 2ESIDENCES A RESIDENTIAL CONDOMINIUM DEVELOPMENT AT "RICKELL "AY IN WHICH 3WIRE 0ROPERTIES HAD A CONTROLLING INTEREST WERE CLOSED DURING THE YEAR #ONSTRUCTION WORK AT !SIA A UNIT CONDOMINIUM TOWER ON "RICKELL +EY HAS COMMENCED WITH COMPLETION SCHEDULED IN THE MIDDLE OF