We are here to manage the Company and not the price of its scripts. We will ride the rising tide of consumerism in China, and expect to become a big beneficiary. So first tier Chinese cities are less dependent on it than second tier cities, and so on. Opening Remarks Mr. Eddie Hak-Kim Ng, SBS JP Secretary for Education, HKSAR. As I have previously written, on the Mainland, luxury brands continue to concentrate in fewer stores and locations. On average we added over 300,000Â square meters per year of world-class commercial properties, which, as I have said before, is larger than one New York Empire State Building. In terms of tenant mix, the two mature Shanghai malls have experienced a phenomenon considerably different from the other centers. Marketing expenses and other costs related to a newer mall are still necessary, and it will take the second lease cycle to gradually improve. This has been true for well over a decade. Overall, exports are steady and, in any event, growing faster than imports. The unpaid portion comprises mainly construction. Ronnie Chan, chairman at Hang Lung Group, discusses what’s happening in Hong Kong, how it’s impacting his business, the economy, how he thinks the … Common sense tells us that retail sales figures are as significant as the rents we received, for growth of the former is a prerequisite and will inevitably lead to that of the latter. In the foreseeable future, operational excellence will be the key. In metropolises like Beijing and Shanghai where physical stores abound, there is less need for it, even though their citizens are on average better educated and so in general more active online. Frankly, unlike residential development for sale in Hong Kong, land price should not be the deciding factor in the success or failure of a commercial property investment project on the Mainland. We deem the Hong Kong property sales market to be less attractive and so we will only buy land when there are exceptional bargains. Once built and sold, it is conceivable that the net after-tax profit therefrom can easily exceed HK$10 billion. I firmly believe in this, and will challenge anyone who questions it. The first of the two towers has a gross floor area of almost 90,000 square meters. It is an enabler whose effects are indeed profound. Was that luck or brilliance of management? We are of the opinion, and many people will agree with us, that Hang Lung has some of the best hardware in the industry. Chairman, Mr. Ronnie C. Chan, continues to pen his Chairman’s Letter to Shareholders to share his analysis of the Company’s business performance and outlook, and his views on macro issues. All Rights Reserved. In any event, at the beginning of the millennium, our Mainland strategy, then limited to one city, together with our Hong Kong maneuvers began to pay off. As I have always maintained, we are here to manage the Company and not share price movements. Second, the ribbon denotes the software which ties the six pillars of hardware together. Next, I want to discuss the important subject of changes in management orientation to meet evolving market conditions. This is always an exciting time of change which should bring improved results. We begin with technology, especially Internet technology, which enables us to provide services heretofore not possible. This is a legacy of decades of sound strategy and hard work. Although many of our malls such as Shanghai Grand Gateway 66, Shenyang Palace 66, and parts of Jinan Parc 66 and Wuxi Center 66, are not tailored to high fashion brand seekers, our reputation for being developers of worldclass luxury malls has been so ingrained that investors might have forgotten our other businesses. Comparing the second half of the year versus the first half, the rate of increase was respectively 20% and 7% for the two malls. In particular, retail sales, especially luxury products like those in our malls, were even harder hit. All Listings Public investments are running strong. History. A lot has already been done but much more is required. It has revolutionized much of our lives and will yet revolutionize our shopping experience. But as we expand, it was difficult to maintain, let alone strengthen it. Rental rates are acceptable. As a result, shopping at our facilities becomes a pleasant experience. Rent collected was about the same as that received a year ago, but retail sales of our tenants have risen â year-on-year Palace 66 moved up 9% and Parc 66, 8%. To put it bluntly: a short man (i.e. By around 2003, our share price began to rise. Mr. C.F. Hang Seng Bank offers a wide array of financial services including online banking, savings, investment, credit cards, loans, mortgages, insurance, and MPF. That was when we struck the Wuhan deal. Your management has been working on many programs in this regard and will gradually introduce them to our shopping centers. A year ago IÂ suggested both exogenous and endogenous factors which are still valid today. We also foresaw that the present government will sooner or later massively sell land to catch up, as higher residential prices have already become a huge social problem. The reason is that Apple basically sells standardized products. By influencing how a person â any customer of ours â relates to another person and to the world around him or her, it can have the effect of warping time and space. Prof. Shing-Tung Yau Chairman, 2012 Hang Lung Mathematics Awards Scientific Committee. In such a favorable environment, we have found a niche (i.e. Unlike the first three quarters of last year, residential sales volume, and in some cases even prices, have of late risen nicely. In a letter to shareholders, chairman Ronnie Chan expressed his confidence and expectations about the Hangzhou project. Read More > Vice Chair’s Notes. Charts. This will help work off some of the excess inventory. They ranked annual reports and selected top performers based on their creativity, cover design, chairman’s letter, writing style, page design, photography and financial presentations. This will be a very aggressive program. I am a firm believer that as long as the Company is strategically sound, operationally healthy and sustainably profitable given acceptable risks, its stock price will sooner or later reflect reality. It is unlikely that I will in my career witness a more lucrative project. After all, the former can always be installed, changed or improved. Teams have been built under them and are performing satisfactorily. It was obvious that our success in Shanghai was not because of buying land on the cheap. Some have expressed concern that e-commerce will reduce the remaining shops to nothing more than an advertisement space where few sales actually take place. Hang Lung had prepared for the deal for four years. Taking into account the outbreak of COVID-19, he specifically writes about the effect of the epidemic on our business in the Addendum. The Board recommends a final dividend of HK59 cents per share which is 1.7% higher than the previous year. In our home market, I expect our rental properties to perform not unlike the year just reviewed. There is a certain truth to that, although some 47% of all rents received and so far 100% of property sales proceeds are still derived from our home market. The 1990âs was a time when then new Managing Director Mr Nelson Yuen and I strived to reorient the business. There is no denying that the Internet has revolutionized our lives. While these policies have negatively affected our business in the short term, we fully support them. Retail sales generated per day were 15% better in the same period. To be sure, we are not bearish about Hong Kong; we are constantly waiting for possible market changes which will lure us back. Results; Underlying Results; Sustainable Turnover and Profit Growth; 2014 Highlights. Between 2008 and 2012, Chinaâs non-online retail expanded 1.8 times in volume while retail online leapt 19 times, albeit from a very low base. Management however is cautious about the short-term outlook especially for Shenyang ForumÂ 66 and the offices in Shanghai Plaza 66. Hopefully Southeast Asia, Latin America, the Middle East and Africa will take up some slack. Let me turn now to our investment property business. Center 66 stood at 16%. It can also help us generate sales. Hang Lung Properties Appoints Adriel Wenbwo Chan As Vice Chair Of Boards Of HLG & HLP. I refer readers to my letter to Hang Lung Group shareholders for further discussions. We believe that their growth prospects are inferior to ours. In the interim, we will finish building our management team, especially on the leasing side. They are the most critical because once determined, they cannot be changed. Interest rates of late have been lowered. 37 Shouson Hill Road, The Peak, on Hong Kong Island on May 30, 2020. CHAIRMAN'S LETTER TO SHAREHOLDERS. With the latest land acquisition in Wuhan, we will have a total of almost 42 million square feet of world-class commercial space on the Mainland not counting the two Shanghai complexes. This may be unheard of anywhere in the real estate industry. The 79-day Occupy Central protests in Hong Kong has hurt tenant sales. The fact was that many Hong Kong companies invested north of the border well before we did â as early as 1979 or 1980 â while we only started to research the market in 1991 and made our first land acquisition in December 1992. On behalf of all my fellow directors, I thank them for their long years of loyal service. TheÂ same effort will be given as before except they would now hear from me more fully on the same substance economic and market analysis as well as company strategy everyÂ sixÂ months instead of every twelve. At this speed, it will take 12-13 years to build out the 32 million square feet still under construction. In the ensuing two decades, we underperformed because of over-conservatism which led to strategic mistakes and missed opportunities. This indicates that there is much hidden value. Since late 2010, our investment portfolio has grown from 13 million square feet to around 23 million square feet, and total rents received have risen from HK$4.8 billion to HK$6.6 billion. We took advantage of market opportunities and parted with 261 units at The HarbourSide and 151 at The Long Beach together with 93 car parks. Founded in 1960, the Group has been expanding into mainland China since 1992. However, it is hard to determine what the optimal level is. This is quite unlike many of our competitors. In Hong Kong, we bought land at the bottom of the market and turned these projects into some of the most profitable the city has ever seen. As I said earlier, the present downturn for luxury goods may take some time to recover, or to find its ânew normalâ. It looked solid if not a little heavy and old-fashioned. Between 2009 and 2012, it grew at approximately 70% annually and is projected to rise by 32% per year up to 2015. We saw rental growth in all but one mall. Within the Company, we have some very promising young staff in their 30âs. That said, we are well aware of the frustration that some shareholders, especially those with a short-term horizon, may feel. As we all know, it takes one to two leasing cycles for a property to mature. Suffice to say that with that facility being the first outside of Shanghai on the Mainland, shareholders rightfully question if our huge success in Shanghai can be duplicated elsewhere. Speech at the presentation ceremony of the hang lung. We will primarily lease them out, but will also consider selling if the price is right. Unlike low unit cost products, the price for deluxe housing can be very elastic. Mr. C.F. If we exclude Shenyang Forum 66 and Wuxi Center 66, rent advanced by 5%. From the perspective of management, we are not that worried about our share price. At the same time many developers are also eager to unload their inventory. The latest round of the anti-corruption and anti-opulence drive had added frost. Consequently occupancy remained at 88% for both properties. It is 95% full and the number is rising. In the third quarter of this year we will open Tianjin Riverside 66, a large freestanding mall of 1.6 million square feet plus 800 car parking spaces. While lower price point products are easily sold through the Internet, sales of luxury goods are affected for the time being due to government policy. First, China has fallen out of favor for many institutional investors. Management is keenly aware of this, and we are doing our best to build a team of operational excellence. 2018. Chairman's speech on "ugc dinner cum presentation ceremony of. It is common knowledge in the industry that our sites, while being best located, cost the least among our peers. I am also gratified to observe that the new management teams that we have put in place are performing. During that period, we have committed to invest some HK$92 billion in new projects on the Mainland (i.e.Â everything outside of Shanghai), of which approximately 54% has been expensed. They ranked annual reports and selected top performers based on their creativity, cover design, chairman's letter, writing style, page design, photography and financial presentations. those outside of Shanghai) have yet to improve. In my opinion, there are no hard and fast rules to handle these issues. It is located in the busiest shopping district and is sizable, measuring 8.26 hectares. These awards reaffirm the Group's success in maintaining quality communications with all its stakeholders. The process will be slow since Europe, traditionally the other major and in fact the biggest importer of Chinese manufactured goods, is not growing. If approved by shareholders, total dividend per share for the year ended December 31, 2014 will be HK76 cents, an increase of 1.3% over the previous year. Events. Now let me turn to a more general review of the market condition for our Mainland rental business. Before retirement last year, Dr Andrew Chan was global vice chair of the world-renowned London-headquartered multi-disciplinary engineering firm, Arup. Opportunity finally came in the form of the Asian Financial Crisis in 1997-2002, and we capitalized on it well. Our management team was stretched to theÂ limit. Conceptually speaking, occupancy cost should be higher in better malls like ours. Net profit attributable to shareholders was not the highest because of low revaluation gains. While our rental business performed barely acceptably, property sales in Hong Kong was strong. By 2013, Shenyang Palace 66 has been open for three years and Jinan Parc 66 two. Overall rents received advanced by 9%, 6% in Hong Kong and 11% on the Mainland. Then there is a market perception that of all the Hong Kong real estate counters, Hang Lung is the purest Mainland play. 2016. Offices at Plaza 66 collected 7% more rent. Eighteen years prior, Mr Nelson Yuen had informed me personally that he would retire in 2010 and had reminded me of it in 2008.