22 㞫ඊΔଐτࠉʔ̇ Hang Lung Properties Limited ଊɾদሃʥʗ׹㞫ඊΔଐτࠉʔ̇ 23ٲဳଉᄙྦྷඑ྆ ManagementHang DiscussionLung Properties and Analysis Limited of the Group’s Performance ಲሃЄࣂЄΔc Ɉ௚ॖሔঢ়ࢋe Irrespective of location, we scale the heights of quality. ลᙴ 24 OVERVIEW พೕࢄʥሻਕ 24 PROPERTY DEVELOPMENT AND SALESذ พै༉ 28 PROPERTY LEASINGذ ဳଉ 38 FINANCE AND TREASURY OPERATIONSټল৻ʥ༅ ཭ࡗ 40 EMPLOYEES ผஐͨ 40 SOCIAL RESPONSIBILITYم ϹȾ᎘ɾ7KH+DUERXU6LGHכ੣੥ࢋؿᄖౖ۪ᜨତશϽ Spacious living room of The Summit overlooking The HarbourSide on West Kowloon 24 㞫ඊΔଐτࠉʔ̇ Hang Lung Properties Limited ଊɾদሃʥʗ׹ٲဳଉᄙྦྷඑ྆ MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP’S PERFORMANCE ȹΣࠗಋֺτΔଐʔ̇c̯එ྆Ε຤Ꮬ α۹ɾᏪพᔾɎࠌܧшྊɎ຤Ꮺe̯ল ϛʗɾʄᒨʄϭಋྫྷɀɊɍყɄɝɍϛ αʑ٦්ၣɾϾΩכɀɊຒʏc˚߬ͅ ௰Ͻሻ൴ಕʭֺߎɀཌྷཌྷɀαiɀɊȼ ࠯௰ϽhɀཌྷཌྷȹαiɍɊʒ࠯௰Ͻe ΐϊcౝ஝ٖٖ׭ᎶЌक़Сಕʭϛʗɾ ɊɀᒨɄϭಋྫྷɊɀყཌྷȼϛຒʏe̯ ᘪݢೕ̱౨ٖࢠҰٖౝ஝ٖɀӯۺඑ྆ ΃c̊Ͳα۹ౝ஝ٖޚȾ˦cၤ˾α۹ ΃eޚࢠݯ̒ӯc͛ၤɐα۹ٖ ಳంйc̒ඖ˚߬ณϾΩඖ͌؀එ̯྆ כϹȾ᎘ිࣵਂʥȹඖϽכɍඖϽܢ˳ Єʼ̈́ɾܪɮི߮cя̳Σ౨൬Ϸe ԞϬࠗಋਆ⭕dᄘΥᅢdϾΩʥɮพþ αʑɎࠌcכνɃټพɾᐢैذᄘΥᅢ אνɃτХټЎԞϬɐࣵԭ࠯ඖ͌ɾै ሻϊൡఝe ௿ྡྷؗeಳ̟ܮඑ྆ܰα۹ɾพᐜʦ̯ ȹȾȾȾαʥɀכඑ̯྆כϤc஫ͫͅ ཌྷཌྷཌྷαࣂᄗ෶ᑪɃ᎚ሔϾΩɠΔcΐ ᎚൙ΔϽeכThe HarbourSide ϊ̯එ྆ଊ୮ พೕࢄʥሻਕذ ลᙴ ̯එ྆̒ඖ᎚ሔϾΩඖ͌ଊ̳ܪɮc൬ גα۹c㞫ඊΔଐࠍྦྷʑ ۹я˿৉΋͌ᅟɾໃιˀ౨e̯එ྆ܧࡄ༦˾ɾলכ ʶc˞໮೩௰Ͻɾሔॖ˞ʥ̯එ྆ڌኝeඑ྆ɰ τܥ஫ʥᏪਆ᏷ྊ੓ԞɾஈΛ c๫ܪ૭ɣສพτࠉʔ̇ ݯҰ࠯ඖֺ͌၀ʶ೪ིɾ৉ࡨஉܢ˳ѧιࠇୂcԯɻ Ίݯ㞫ඊΔଐτ ໮೩ඖ͌ࢄ඀ሻਕི߮ࣂcੀ˿ઘ঴ᆅמ˂ɀཌྷཌྷȹαɊɀכ ֺτΔଐඖ͌я͚ͅ ईɾ̟௿ʦᎶe܃ࠉʔ̇eඑ྆ʌ 㞫ඊΔଐ߲ஐc˥එ྆੡˞ഁ͂༅฻ʥ ዀ௿ᚁ༏Ⱦ᎘ॎכॶɈe 7KH+DUERXU6LGH Ͻجᘏړᆢ ଊɾদሃʥʗ׹ 25ٲԜೕࢄɾɠΔ᎝ௐ ဳଉᄙྦྷඑ྆˿ Development Land Bank Management Discussion and Analysis of the Group’s Performance ɀཌྷཌྷɀαʒ˂ɍɊˀat 30 June 2002כ 11% 89% ■ ϾΩ Residential ■ ਆ⭕ Commercial OVERVIEW Hong Kong declined during the year. However income from our two projects in Hang Lung Properties has faced many Shanghai has helped offset this decline. challenges over the past financial year - both internally and within the marketplace in Our results this year reflect market reality. which it operates. As part of our corporate However, the Company is in a sound position, restructuring, Amoy Properties Limited in part due to the prudent acquisition of changed its name in December 2001 to quality residential sites in 1999 and 2000. Hang Lung Properties Limited. All future real estate projects will now be undertaken by PROPERTY Hang Lung Properties in a move which DEVELOPMENT rationalizes our Group-wide resources and AND SALES ensures our competitiveness. We have four prime residential developments Like all property companies in Hong Kong, under construction. All are on programme to we have been operating in a difficult economic meet their targeted completion dates and we ጙജഷϹ environment. Turnover for the financial year remain confident that the quality of units we Hing Wah Street West fell 5.5% to HK$2,383.2 million mainly due to are producing, together with the facilities that decreased sales of apartments at Garden have been carefully integrated within each Terrace (2002: 27 units; 2001: 36 units) during complex, will ensure strong market interest the year. As a result, net profit attributable to once we begin our sale campaigns for each ordinary shareholders decreased 12.8% to of these projects. HK$1,207.0 million and we have proposed a final dividend of 29 cents per ordinary share, The HarbourSide, Airport Railway Kowloon which is the same as last year. Total ordinary Station consists of three blocks of 70-storey dividend for the year is 40 cents per ordinary residential towers constructed above a 5- share, same as last year. storey car park podium. This development will offer 1,122 residential units with gross We are pleased to report that our construction floor areas ranging from 96 sq m to 272 sq m, programme, with four significant new and will be completed in the third quarter of residential developments (three on 2003. Our marketing and sales programme West Kowloon Reclamation and one in Ho will commence in the last quarter of 2002 Man Tin), is progressing on schedule. or first quarter of 2003. Rental revenue in the commercial, office, The Hing Wah Street West development, residential and industrial / office sectors in situated on the West Kowloon Reclamation, 26 㞫ඊΔଐτࠉʔ̇ Hang Lung Properties Limited ஦༦㞫ඊΈඖ͌຤ଉؿະ೪ະɈc ϭഁכඑ྆ؿ7KH+DUERXU6LGHඖ͌ጘ Hang Lung’s project managers move the Group’s The HarbourSide development towards completion ଊɾদሃʥʗ׹ 27ٲဳଉᄙྦྷඑ྆ Management Discussion and Analysis of the Group’s Performance ɐၰc˳ܢɍᄝᅢঢ়ȼɊᄙɾϾΩɣ෨c is on schedule for completion in the fourth Ɏஉʄᄙ৤ӹ௿e໮ඖ͌˿ొԜȹɝȹϛ quarter of 2003. We have an 85% ɀɊɀ࠯ϾΩ௰ϽcҰ࠯௰Ͻɾࠍዶʍ˝ shareholding in this development which ɀ consists of five residential towers built overכȾɊʒ̡ʿϝϭɀϛȼɊɀ̡ʿϝc ɀཌྷཌྷ a 3-storey carparking / retail podium andכཌྷཌྷɍα଱ɍտໃιe̯එ྆ੀ ɀα଱̒տֶɀཌྷཌྷɍα଱ȹտࢄ඀໮ඖ one level basement and includes clubhouse ͌ɾ̟௿ઐᄤʥሻਕི߮e and recreational facilities. This development is one of the Government’s two pilot mixed- ϹȾ᎘ිࣵਂcଊ̳ housing schemes. The residential towersכጙജഷϹ ඖ͌Ͻ ɀཌྷཌྷɍα଱̒ contain 1,616 residential units with grossכɮc˿શΣ౨ܪ൬Ϸ տໃιe̯එ྆ܛτ໮ඖ͌ϛʗɾɄɊ floor area ranging from 46 sq m to 119 sq m. ʄᚬऩe໮ඖ͌˳ܢೕࢄʄᄝϾΩɣ As part of the mixed housing scheme ෨cɎஉɍᄙ৤ӹ௿þਆ⭕ʥȹᄙΔ requirement, about 30% of the residential e໮ඖ͌Ƚ area will be returned to the Government forܪผֺʥ੖ᅥஉܢ˳࢒cԎ ૥΋βָ۰ི߮ࠖԭඖɾȹcԯϾ sale as subsidised housing. We will market֚ܧ Ωɣ෨˳ܢȹɝʒϛȹɊʒ࠯ϾΩ௰ the remainder as private flats for sale at full ϽcҰ࠯௰Ͻɾࠍዶʍ˝̒Ɋʒ̡ʿϝ market value during the first half of 2003. ϭȹϛȹɊȾ̡ʿϝe޸ϛʗɾɍɊɾ ๑૥΋βָ۰ི߮ɾ஫ͫ Our other development on West KowloonܘϾΩࠍዶੀ Аݯ༅Хָ۰ˮਕe቗ Reclamation is at Hoi Fai Road where eight֚ܧஃցc͚Α ძАݯӝɁ blocks of 43-storey residential towers are̟ܘɎɾ௰Ͻ̯ͅඑ྆ѧͲ ɀ being built on a prime sea view site. Theכ۰ˮਕcτᗐɾ̟௿ઐᄤི߮ੀָ ཌྷཌྷɍαɐ˸α۹൬Ϸe development includes a three-storey car park, office and retail podium and 4,000 sq m ϹȾ᎘ිࣵਂɾඖ͌ detached clubhouse with recreationalכඑ྆̊ȹඖϽ̯ พe໮ඖ facilities. The 1,823 units, which range inذࣵሣ༞ɾ᎚ሔࣵౡכȽ࢔ໃ ͌ଊ̳ೕࢄɄᄝᅢঢ়̒ɊɍᄙɾϾΩɣ size from 62 sq m to 132 sq m, are expected ෨cԎ˳ܢೕࢄɍᄙᄘΥᅢdਆ௿ʥ৤ to be completed in the second quarter of ӹ௿c˞ʥࠍዶ༠̒ɝ̡ʿϝɾዟ͓ผ 2004. We have not yet set a launch date for .eϾΩ௰ϽੀݯȹɝɄϛ this projectܪֺ՗੖ᅥஉ ɀɊɍ࠯cҰ࠯௰Ͻɾࠍዶʍ˝ʒɊɀ ̡ʿϝϭȹϛɍɊɀ̡ʿϝeད౨໮ඖ Foundations were laid for our development ɀཌྷཌྷ̒α଱ɀտໃιe̯එ྆ at Hau Man Street in Ho Man Tin duringכ˿͌ ֆ̰ໃྡྷ໮ඖ͌ઐˮ̟௿ɾࣂංe the year and superstructure work is now in progress. This 24-storey residential tower will provide 188 units ranging in size from ̯כЄʼ̈́ѣ̵ഷ ɾඖ͌ɰכඑ྆Ͻ̯ 28 㞫ඊΔଐτࠉʔ̇ Hang Lung Properties Limited α۹ʑc̯ܧࡄ༦˾ɾলכؗcرዾɮೡ͛ ౝ༧ۺα۹ʑѧιΔਥɮೡcϤɐၰ νɃɎൡϛʗɾټೕࢄȹᄝᅢঢ়ɀɊ̒ එ྆ԞϬࠗಋɾैܢ˳ɰࢄ඀e໮ඖ͌ ᄙɾϾΩɣ෨cੀొԜȹϛɄɊɄ࠯ϾΩ ɀcݯಋྫྷɊȼყཌྷȹϛ̒Ɋຒʏe੹ ɐࣵɾԭ࠯ඖ͌㞫ඊᄤ௿ʥכ௰ϽcҰ࠯௰Ͻɾࠍዶʍ˝ʄɊʄ̡ʿϝ ̯එ྆Ͻ ɀཌྷ ಋමᄤ௿cʗПొԜಋྫྷɀყཌྷȹϛຒכ˿ϭȹϛȹɊ̡ʿϝeད౨໮ඖ͌ νɃcτټ໮ඖ͌ɾஃᅡ༖ ʏʥಋྫྷʒɝຒʏɾӪΡैכཌྷɍαʒ˂ໃιeͅ ሻ̯එ྆໮ඖพ৻ֺՇԷɾᄧᚊeאԯໃιࣂઐˮ̟௿e Хכɩc̯එ྆τ˿ॶ νɃ༖֡αᄈ˱ϛʗɾټΐϊኬ᛽ै พୂ΋ɾኬ᛽ذพै༉ Ʉe̯එ྆ɾࠗಋै༉ذ ϛʗɾȾɊȹɾଉ෱ˋ̡cכˮଅ୮ै νɃԞϬਆ⭕dᄘΥᅢd ԯɻᄘΥᅢʥႚΩˈਆ⭕Εैˮଅʿࠍټඑ྆ɾै̯ ༞ɾ ֻՇ༖ɣᎦɈe̟כพeਥذϾΩʥɮพþᄘΥᅢ ଊ Group Performanceٲඑ྆ 2002 2001 ᛰ৽ Change ϛຒʏ ϛຒʏ ϛຒʏ ϛʗଅ $Million $Million $Million % Ꮺพᔾ Turnover พै༉ Property Leasingذ ࠗಋ Hong Kong 1,701.4 1,741.5 -40.1 -2 ɻਝɣ஺ Mainland China* 201.0 19.3 +181.7 +941 พ Disposal of Investment Properties 480.8 762.4 -281.6 -37ذˮਕҙ༅ 2,383.2 2,523.2 -140.0 -6 С Profit before Taxationึک৖ೢ พै༉ Property Leasingذ ࠗಋ Hong Kong 1,358.6 1,480.2 -121.6 -8 ɻਝɣ஺ Mainland China 169.6 30.0 +139.6 +465 พ Disposal of Investment Properties 130.7 320.2 -189.5 -59ذˮਕҙ༅ 1,658.9 1,830.4 -171.5 -9 СࢠνɃ Interest Income 93.0 225.2 -132.2 -59 Ϸܧ൒͂ Administrative Expenses (88.6) (86.3) +2.3 +3 ল৻൒͂ Finance Costs (256.9) (266.2) -9.3 -3 1,406.4 1,703.1 -296.7 -17 ౝ஝ٖٖ׭ᎶЌक़С Net Profit attributable to Ordinary Shareholders 1,207.0 1,383.7 -176.7 -13 ಋමᄤ௿ϛʗɾ̒Ɋȼɾᚬऩכඑ྆ܢ˳ɺ Excluding the Group’s attributable interest (47%) in The Grand Gateway ଊɾদሃʥʗ׹ 29ٲС ဳଉᄙྦྷඑ྆ึکᏪพᔾʥ৖ೢ Turnover and profit before taxation Management Discussion and Analysis of the Group’s Performance ࿀ϭʒ˂ɍɊˀ˅α۹for the year ended 30 June ϛຒʏ $Million) 4,000 3,000 2,000 1,000 С Pofit before taxationึک৖ೢ ■ ■ Ꮺพᔾ Turnover 0 1998 1999 2000 2001 2002 55 sq m to 110 sq m and is expected to be and encouraged a greater commitment to completed by June 2003. We will probably marketing investments in brand extensions by put this project on the market upon its well established consumer labels. completion due to its smaller size. As a result, rents are stabilising in prime PROPERTY LEASING shopping locations where rental space remains tight. However further market Our rental revenue is generated from consolidation is expected at secondary commercial, office, residential and industrial/ locations where rents will continue to be office sectors. In line with general market driven down. As most of our shopping malls conditions, that revenue over the past are in primary locations, they have performed financial year in Hong Kong decreased by satisfactorily throughout the year. Ί֙ఢ Fashion Island 2% to HK$1,701.4 million. Our two Shanghai projects, Plaza 66 and The Grand At Fashion Island/Fashion Walk in Causeway Gateway, however, helped offset the Bay rental income recorded a decrease of downturn by generating for us sound levels 1% and the occupancy level stood at 99%. of income at HK$201 million and HK$60 We are gradually revamping the mix of retail million respectively. Total rental income outlets here and expect to achieve higher therefore increased by 8% over last year. rental rates on renewals. Occupancy rates in our Hong Kong portfolio stood at a satisfactory level of 91% with The Peak Galleria recorded a 5% decrease offices and high-end residential sectors in rental income but average occupancy suffering more than retail. reached 90% by the end of the financial year ɬ௅ᄤ௿ after we adjusted the tenant mix to cater for The Peak Galleria HONG KONG a change in the countries of origin of tourists. The development continues to be a popular Commercial and Retail Sector destination for both overseas and local In our commercial and retail sector, weakened visitors and is attracting a number of new consumer confidence continues to affect retail and service operators.