KERRY PROPERTIES LIMITED 嘉里建設有限公司 FY2013 Final Results Presentation to Investors March 2014 Agenda
1. 2013 Year in Review
2. Hong Kong Property
3. PRC Property
4. 2014 Preview
5. Appendix
2 2013 Year in Review
3 Y2013 Achievements
HONG KONG PROPERTY Total Contract Sales HKD 5.5 bn Total Saleable Area Sold Approx. 295,000 sf Key Properties Sold Lions Rise, Bayview, SOHO 189, Altitude Land Acquisition Sheung Lok Street, Homantin Ongoing Construction Ede Road, LaSalle Road, Kau To Shan, So Kwun Wat, 5-6 Hing Hon Road Activities PRC PROPERTY Total Contract Sales Approx. HKD 5.2 bn Total GFA Sold Approx. 266,000 sm Key Properties Sold Hangzhou Parkview Residences Ph 2, Chengdu Metropolis-Arcadia Court Ph 1, Tangshan Arcadia Court Ph 1, Tianjin Arcadia Court, Qinhuangdao Habitat Ph 1, Shenyang Arcadia Court Ph 1, Shenyang Enterprise Square office, Changsha Arcadia Court Ph 1, Ningbo The Berylville Ph 1 New Investment Property Jing An Kerry Centre Hotel at Shenyang Kerry Centre Ongoing Construction Major Investment Properties: Tianjin Kerry Centre Ph 1, Hangzhou Kerry Central, Activities Nanchang Complex Development Ph 1, Shanghai Kerry Everbright City Ph 3, Shenyang Ph 1 office, Jinan Complex Development
4 FY2013 Financial Results Overview
(HKD mm) FY 2013 FY 2012 % Change
Turnover * 13,970 15,218 -8% Gross profit * 6,057 6,103 -1% Gross profit margin (%) * 43% 40% +3%
Profit attributable to shareholders - Before taking into account the net increase inir favalue of investment properties 4,413 4,696 -6% and the gain arising from the spin-off of Kerry Logistics Shares - Increase in fair value of investment propertiesnet ( of related tax effects) 4,416 2,265 +95%
- Gain arising from the spin-off of Kerry Logistics Shares 4,325 - n/a - After taking into account the net increase inr faivalue of investment properties and the gain arising from the spin-off of Kerry Logistics Shares 13,154 6,961 +89%
Earnings per share (HK$) - Before taking into account the net increase inir favalue of investment properties 3.06 3.26 -6% and the gain arising from the spin-off of Kerry Logistics Shares - After taking into account the net increase inr faivalue of investment properties 9.13 4.84 +89% and the gain arising from the spin-off of Kerry Logistics Shares
Final dividend per share (HK$) 0.55 0.55 +0% Dividend per share (HK$) - Interim 0.35 0.40 -13% - Final 0.55 0.55 +0% - Total 0.90 0.95 -5% Payout ratio (%) 29.4% 29.1%
* From property business only
5 Turnover Analysis
%% (HKD mm) FY 2013 Weighting FY 2012 Weighting % Change
Revenue from Property Sales * - Hong Kong 7,194 52% 11,563 76% -38% - PRC 4,071 29% 1,541 10% +164% 11,265 81% 13,104 86% -14% Revenue from Property Rental and others - Hong Kong 936 7% 845 6% +11% - PRC 1,211 8% 989 6% +22% 2,147 15% 1,834 12% +17%
Hotel Revenue - PRC 558 4% 280 2% +99%
Total Turnover 13,970 100% 15,218 100% -8%
Recurrent Revenue 2,705 19% 2,114 14% +28% Non-Recurrent Revenue 11,265 81% 13,104 86% -14% Total 13,970 100% 15,218 100% -8%
* Exclude sales of investment properties
6 Total Property Sales Proceeds
(HKD mm) FY 2013 FY 2012 % Change
Property sales proceeds - Hong Kong Property 7,194 11,563 -38% - PRC Property 4,071 1,541 +164% 11,265 13,104 -14%
Add: Sales proceeds from investment properties - Hong Kong Property - 19 -100% - PRC Property 92 127 -28% 92 146 -37%
Total property sales proceeds - Hong Kong Property 7,194 11,582 -38% - PRC Property 4,163 1,668 +150% 11,357 13,250 -14%
7 Gross Profit Analysis
%% (HKD mm) FY 2013 Weighting FY 2012 Weighting % Change
Recurrent Gross Profit Property Rental and others 1,586 26% 1,360 23% +17% Hotel Operations (12) 0% 20 0% -160% Total Recurrent Gross Profit 1,574 26% 1,380 23% +14%
Non-recurrent Gross Profit Property Sales 4,483 74% 4,723 77% -5%
Total 6,057 100% 6,103 100% -1%
8 Profit Attributable to Shareholders in 2013
Discontinued Continuing Operation (HKD mm) Operation (Logistics) Total
Profit attributable to shareholders - Before taking into account the net increase inir fa value of investment properties 3,548 865 4,413 and the gain arising from the spin-off of Kerry Logistics Shares
- Increase in fair value of investment propertiesnet ( of related tax effects) 3,828 588 4,416
- Gain arising from the spin-off of Kerry Logistics Shares - 4,325 4,325
- After taking into account the net increase in rfai value of investment properties and the gain arising from the spin-off of Kerry Logistics Shares 7,376 5,778 13,154
9 Balance Sheet as of December 31, 2013
As of As of (HKD mm) Dec 31, 2013 Dec 31, 2012 % Change
Total Debt (Including convertible bonds) 34,976 31,906 +10% Less: Net Cash and Bank Balances (11,494) (16,039) -28% Net Debt 23,482 15,867 +48%
Undrawn bank loan and overdraft facilities 11,181 10,117 +11%
NAV 75,755 70,752 +7% Gearing Ratio 31.0% 22.4% +8.6%
No. of issued shares at period end (mm) 1,444 1,439 +0.4% NAV / Share HK$52.45 HK$49.16 +7%
Interest cover (x) (excl. discontinued operation - KLN) FY 2013 FY 2012 % Change – Before fair value increase of investment properties 5.8 7.0 -17% – After fair value increase of investment properties 13.4 10.5 +28%
Dividend cover (x) – Before fair value increase of investment properties & spin-off gain 3.4 3.4 +0% – After fair value increase of investment properties & spin-off gain 10.1 5.1 +98%
Return on shareholders' equity (%) – Before fair value increase of investment properties & spin-off gain 5.8% 6.6% -0.8% – After fair value increase of investment properties & spin-off gain 17.4% 9.8% +7.6%
10 Debt Maturity Profile
16,000 42% Total Debt : HK$34,976 mm Total: 14,534 14,000 3,251 12,000
10,000
8,000
(HKDmm) 16% 6,000 11,283 Total: 5,470 15% 10% 11% 4,000 4,614 Total: 3,479 5,374 6% 2,311 2,000 3,965 2,154 856 1,168 0 Within 1 Year Within 2 Within 3 Within 4 Within 5 Over 5 Years Years Years Years Years
Bank Loans Fixed Rate Bonds
As of Dec 31, 2013 11 Property Portfolio Overview
Total Property Portfolio Attributable GFA: Approx. 59.2 mm s.f.
Overall – By Type Overall – By Location
Overseas Macau 8% PUD 4% 76% Hong Kong Held for 10% Sales 3%
Hotel Completed Mainland 3% Inv Prop. China 18% 78%
PUD – By Location PRC PUD – By Usage Gross Asset Value
Overseas Apts/Ser Apt Warehouses Overseas 7% & Log Macau Macau 1% Prop 5% Centres 2% 2% 1% Office Hong 10% HK Resi Residential Kong 33% 65% 6% PRC Prop 52% Mainland China Commercial HK Comm 82% 14% 10% Hotel 10% 12 As of December 31, 2013 Hong Kong Property
13 Hong Kong Property Results
(HKD mm) FY 201 3 FY 201 2 % Change Turnover Property sales revenue excluding investment properties 7,194 11,563 -38% Property rental and others 936 845 +11% Total turnover 8,130 12,408 -34% Sales proceeds from investment properties - 19 -100% Total property revenue 8,130 12,427 -35% Gross profit Property sales 2,836 4,317 -34% Property rental and others 745 673 +11% Total 3,581 4,990 -28%
G ross profit margin Property sales 39% 37% Property rental and others 80% 80% Overall 44% 40%
14 Hong Kong Key Investment Properties Performance
HK Investment Properties Occupancy
Attributable GFA (000s s.f.) 99%97% 97% 98% 100% 94% 93%
Apartment 722 75%
Commercial 1,349 % 50%
Office 838 25% Total 2,909 0% Apartment (1) Commercial Office As of Dec 31, 2013 Dec 31, 2012 Dec 31, 2013 (1) Excludes Branksome Grande for the period ended Dec 31, 2013. Refurbishment works scheduled to commence in Q2 2014 Luxury apartment investment properties in Mid Levels Commercial investment properties
Aigburth Branksome Grande
MegaBox and Enterprise Kerry Centre, Quarry Branksome Crest Square 5, Kowloon Bay Tavistock Bay 15 Hong Kong Properties Under Development
HK/Macau PUD Buildable GFA ** = 3.2 mm s.f.
Name Location Type Stage of Completion Expected KPL ’s Buildable Completion Interest GFA** (%) (s.f.)
FOR SALE PROPERTIES
1 Ede Road Project Kowloon Tong R Superstructure work in progress 2Q14 100 77,468
2 La Salle Road Project Ho Man Tin R Superstructure work in progress 2Q14 100 60,852
3 Kau To Project Sha Tin R Superstructure work in progress 2Q15 40 412,588
4 Hing Hon Road Project * Sai Ying Pun R Foundation work in progress 1Q16 71 27,357
5 Sha Tin Heights Road Project Sha Tin R Conceptual design in progress 3Q16 71 11,727
6 Shan Kwong Building Redev ’t Project Wong Nai Chung R Foundation work in progress 4Q16 100 81,322
7 Sheung Lok Street Project * Ho Man Tin R Schematic design in progress 1Q17 100 1,142,168
8 So Kwun Wat Project Tuen Mun R Site formation and foundation 1Q17 100 939,600 work in progress
9 Nam Van Project Macau R Schematic design in progress 3Q17 100 397,190
GRAND TOTAL 3,150,272
R=Residential * Acquired in 1H 2013 ** KPL share Note: As regards the reclamation project in Macau, according to the Macau SAR Government Notice, a piece of land will be granted in exchange with location and size to be identified and agreed. 16 PRC Property
17 PRC Property Results
(HKD mm) FY 2013 FY 2012 % Change
Turnover Property sales revenue excluding investment properties 4,071 1,541 +164% Property rental and others 1,211 989 +22% Hotel 558 280 +99% Total turnover 5,840 2,810 +108% Sales proceeds from investment properties 92 127 -28% Total property revenue 5,932 2,937 +102% Gross profit Property sales 1,647 406 +306% Property rental and others 841 687 +22% Hotel (12) 20 -160% Total 2,476 1,113 +122%
Gross profit margin Property sales 40% 26% Property rental and others 69% 69% Hotel -2% 7% Overall 42% 40%
18 PRC Key Investment Properties Performance
Jing An Kerry Centre Kerry Parkside, Pudong
94% 100%100% 100% 100% 100% 86% 100% 89% 83% 83% 75% 75% 43% 44% % 50% % 50%
25% 25% N/A N/A N/A 0% 0% Office (Ph 1) Office (Ph 2) Retail Apartment (1) Office Retail Apartment As of Dec 31, 2012 As of Dec 31, 2013 As of Dec 31, 2012 As of Dec 31, 2013 (1) Apartments were renovated and re-introduced into the market in 2013. Note: Shanghai Kerry Centre’s commercial mall has been integrated into the Jing An Kerry Centre. Beijing Kerry Centre Shenzhen Kerry Plaza
98% 97% 100% 99% 97% 79% 100% 81% 75% 56% 75% 54%
% 50% 42%
% 50%
25% 25% N/A 0% 0% Office Retail BJ Kerry Ctr Hotel (1) Phase 1 Office Phase 2 Office As of Dec 31, 2012 As of Dec 31, 2013 As of Dec 31, 2012 As of Dec 31, 2013 (1) Hotel occupancy rates are averages for the periods. Note: Beijing Kerry Centre’s apartments are under renovation and commercial mall were re-introduced into the market in 2013. 19 Jing An Kerry Centre
Development Mix
Total GFA 450,000 s.m.
Commercial 66,000 s.m. + 13,000 s.m. existing = 79,000 s.m. (total)
Office 114,000 s.m. + 39,000 s.m. existing = 153,000 s.m. (total)
Jing An Shangri-La 74,000 s.m. (508 rooms)
Apartments (Renovated) 18,000 s.m. (133 apts)
Below Ground Area 121,000 s.m. +15,000 s.m. existing Anchor Stores Opened Carparks 1,100 + 240 existing = 1,340 lots Hugo Boss Completion 2013 Emporio Armani Donna Karen / DKNY
Leasing (Committed) Office Commercial Loewe 70% 94% Marc Jacobs
As of December 31, 2013 Paul Smith As of December 31, 2013 Max & Co 20 Tianjin Kerry Centre
Development Mix Office + Apts
Site Area Approx 86,000 s.m. Residential Phase 1 Hotel
Total GFA Approx 504,000 s.m.
For-Sale Residential Approx 176,000 s.m. or 1,126 units
Commercial Approx 83,000 s.m.
Hotel Approx 70,000 s.m. or 508 keys
Carparks & Others Approx 175,000 s.m. or 2,500 lots
Completion In phases between 2014 and 2015 Retail Phase 2
Total GFA Approx 203,000 s.m.
Office Approx 120,500 s.m.
Apartments Approx 22,000 s.m.
Commercial Approx 28,000 s.m.
Carparks Approx 32,500 s.m. or 600 lots
TOTAL PROJECT GFA Approx 707,000 s.m.
21 21 Key PRC Investment Properties Under Development Target Completion (2014-2017)
2014 Between 2014 and 2015 2015
Tangshan (hotel + commercial) Shanghai Kerry Everbright City Ph 3 (office + commercial)
Nanjing (hotel) Tianjin Kerry Centre Ph 1 (hotel + commercial)
Hangzhou Kerry Central Nanchang Ph 1 (hotel) Yingkou (hotel)
2016 Between 2016 and 2017 2017
Jinan (office + hotel+ commercial) Zhengzhou mixed use Kunming (hotel) 22 PRC Properties Under Development Total PRC PUD Attributable GFA = 37 mm s.f.
Name Location Type Stage of Completion Expected KPL ’s KPL ’s Completion Interest Attributable (%) GFA (s.f.)
MIXED USED DEVELOPMENT
1 Tianjin Kerry Centre Tianjin R/C/H/O/A Ph1 – Completion verification in progress Ph 1 – In phases 49 2,631,906 between 2014 & 2015
2 Kerry Central, Hangzhou Hangzhou A/C/H/O Excavation work completed. Basement 2015 75 1,576,544 construction work in progress
3 Nanchang Complex Development Nanchang R/H/O/C Ph1 – Hotel & Residential: Superstructure work Ph 1 – In phases 80 2,055,395 in progress between 2014 & 2015
4 Shenyang Kerry Centre Shenyang R/O/C Ph1 – Superstructure work completed. Interior In phases between 60 8,503,337 decoration and mechanical and engineering 2014 & 2022 work in progress Ph 2 – Excavation work in progress
5 Zhengzhou Complex Development Zhengzhou R/H/O/C Schematic design in progress In phases between 55 1,293,007 2016 & 2017
SUBTOTAL 16,060,189
OTHER INVESTMENT PROPERTIES
6 Nanjing Hotel Development Nanjing H Superstructure work completed. Mechanical and 2014 45 412,072 engineering and external work in progress
7 Kerry Everbright City Phase III Shanghai O/C Piling work completed. Basement construction 2015 74.25 805,141 work in progress
8 Jinan Complex Development Jinan O/C/H Excavation work in progress 2016 55 540,237
9 Kunming Complex Development Kunming C/H/A Schematic design in progress 2017 35 281,809
SUBTOTAL 2,039,259
TOTAL FOR MIXED USE DEVELOPMENT AND OTHER INVESTMENT PROPERTIES 18,099,448
Denotation: R=Residential. O=Office. C=Commercial. A=Apartment. H=Hotel 23 PRC Properties Under Development (cont’d.)
Name Location Type Stage of Completion Expected KPL ’s KPL ’s Completion Interest Attributable (%) GFA (s.f.)
FOR SALE PROPERTIES
10 Tangshan Arcadia Court Phase II Tangshan R/H/C Structure topped out, internal and external In phases between 40 811,196 and Hotel Development work in progress 2014 & 2015
11 Changsha Xiangjiang Arcadia Changsha R/C Ph1 –Superstructure work completed. In phases between 100 3,206,811 Court External and internal work in progress 2014 & 2017
12 The Metropolis – Arcadia Court Chengdu R/C Excavation and piling work completed 2017 55 1,004,675 Phase II
13 Qinhuangdao Habitat Qinhuangdao R/C Ph1 – Superstructure work in progress In phases between 60 2,836,677 2015 & 2018
14 The Metropolis – Arcadia Court Chengdu R/C Excavation work in progress 2019 55 1,447,601 Phase III
15 The Berylville, Ningbo Ningbo R Ph1 – Superstructure work in progress In phases to 2017 50 515,752
16 Yingkou Haydes Residence and Yingkou R/H/C Residential Ph1 –Superstructure work in In phases between 65 2,957,051 Hotel Development progress 2015 & 2023 Hotel: Excavation and piling work completed
17 Putian Complex Development Putian R/H/C Ph1 – Superstructure work in progress Phase 1 – 2016 60 2,409,041
18 Nanjing Residential Development Nanjing R/C Schematic design and piling work in 2015 100 954,982 progress
19 Hangzhou Zhijiang Residential Hangzhou R/C Schematic design, excavation and piling In phases between 100 2,524,976 Project work in progress 2017 & 2018
SUBTOTAL 18,668,762
GRAND TOTAL 36,768,210
Denotation: R=Residential. O=Office. C=Commercial. A=Apartment. H=Hotel 24 2014 Key PRC Projects For Sale and New Launches Existing Projects For Sale
Manzhouli Watch Lake Ph 2 Hangzhou Parkview Residence Ph 2 Chengdu Metropolis-Arcadia Court Tangshan Arcadia Court
Shenyang Arcadia Court Changsha Arcadia Court Ph 1 Ningbo Berylville Tianjin Arcadia Court Qinhuangdao Habitat 2014 New Launches
Shanghai KEC Hanghou Zhijiang Ph 1 Nanjing residential Putian Arcadia Court Ph 1 Nanchang Ph 1 res Ph 3 office residential 25 2014 Preview
26 2014 Preview
HONG KONG PROPERTY Residential Property Sales Continue to sell remaining units of Lions Rise and The Altitude Launch The Summa, Ede Road, La Salle Road and Kau To Shan projects Construction Continue construction of Ede Road, La Salle Road, Kau To Shan, So Kwun Wat and 5-6 Hing Hon Road projects
PRC PROPERTY Investment Properties Commencement of Operation 2H 2014: Tianjin Kerry Centre Ph 1 (hotel & commerical), Nanchang Ph 1 hotel and Nanjing hotel Development of major mixed-use projects in 1 st tier cities to strengthen the premier band position, while creating strong recurring income streams for the Group Continue construction of Tianjin Kerry Centre Ph 1, Shenyang Kerry Centre, Hangzhou Kerry Central, Nanchang Complex Development Ph 1 and Shanghai Kerry Everbright City Ph 3 Adopt a proactive and adaptive sales strategy for forthcoming property launches Continue to sell Hangzhou Parkview Residence Ph 2, Chengdu Metropolis-Arcadia Court Ph 1, Tangshan Arcadia Court Ph 1, Manzhouli Watch Lake Ph 2, Tianjin Arcadia Court, Changsha Arcadia Court Ph 1, Qinhuangdao Habitat Ph 1, Shenyang Arcadia Court Ph 1 and Ningbo Berylville Ph 1 residential Launch Putian Arcadia Court Ph 1, Nanchang Ph 1 residential, Hangzhou Zhijiang residential, Nanjing residential and Shanghai Kerry Everbright City Ph 3 office
LAND BANK
Continue to screen the market for opportunities to expand its land bank in Hong Kong and the PRC based on timing, location and price considerations
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