00:00Good morning and very nice to see you.
00:01Good morning.
00:03Really favourable market conditions in the first half.
00:07What were the highlights for you?
00:09What was up to par?
00:10What perhaps was on the softer side?
00:12Then we can talk, I guess, about the outlook after.
00:14Yeah, I think the momentum of the market started last quarter last year.
00:19So actually we catch up at the right time the availability of sales
00:25of some of our urban redevelopment projects.
00:29We really sell very well.
00:31And as you know that Henderson is some sort of a specialist
00:36in urban redevelopment.
00:38So for the first half we do the sales.
00:41Most of them happen in the redevelopment areas like Hong Kong
00:46and some in Kowloon City which are sitting in really good school zones.
00:52So I think it's a mix of momentum of the whole market
00:56and also the location of our sites are quite good.
01:01So it makes, of course, last year's come from a low base.
01:09There's a lot of talk about what we're seeing when it comes to the mainland, right?
01:14This crackdown on offshore wealth that people are concerned
01:17that this might extend to the property market and property income.
01:20We have seen a little bit of a slowdown when it comes to Hong Kong home sales
01:23with some of the tightening capital alpha from the mainland.
01:27Does that change your sales strategy at all in the second half?
01:30There's a slowdown, obviously, in the last four to six weeks.
01:36I don't think we'll try to catch up with this short-term wave
01:42because we do not know actually what happened and how long it will last
01:47and it really hits the property market or not
01:51because this tax regime is still up to interpretation
01:57if fixed assets is included or not.
02:01We do not know.
02:02So far, the mid-high market is slowing down.
02:08But if you see you read newspaper more than me,
02:12luxuriance, the high end is still going quite reasonably well.
02:17For the last few weeks, it seems to be less affected by this new tax regime.
02:22There's a few uncertainties in the market at all.
02:24You don't know interest rates, which way it's going.
02:28So there's a few uncertainties, not just the tax regime
02:34that will affect sentiment for the short term.
02:37But for us, our plan is for six months and we have a few pili.
02:44In general, the location is still a good urban redevelopment
02:50in reasonably good school zoning.
02:52So we are confident we will go ahead with the current plan.
02:57Okay.
02:58What are you seeing recently on how quickly you're able to get your new inventory out
03:02in terms of the take-up?
03:04Have you noticed any softening in the overall prices?
03:08Talk to us about the next six months is what I want to get to.
03:10You see, actually, it's a mixed bag.
03:14You see, we have not launched anything after this few external factor volatilities.
03:23But some developers still uphold price.
03:27Some developers seem to offer, want to unload some inventories.
03:33So I think different developers have different views at the moment.
03:36It's still a mixed bag.
03:39Tell us a little bit more about, I guess, farmland.
03:42I think there's a part of the earnings where you achieve 66% of your underland profit growth
03:47in the first half because of the Hong Kong government,
03:50where they basically, there was compensation on taking over some of your farmland
03:54for, of course, the development of the northern metropolis.
03:57How do you think you can actually further monetize, of course,
04:01from what looks to be a pretty sizable farmland reserve that you have right now?
04:06We still own 38 million square feet.
04:11So it really, it really depends on how the government plan the Lough Mott metropolitan.
04:21Those assumptions are, they got, we, we, we got is close to the university town.
04:30And also, recently, we also have paid a land premium in a JV to convert a piece of land,
04:39which is also close to the university town.
04:42So, after all, the government is the drive.
04:45And also, we, we have to follow.
04:49The reason, the reason, the development is quite, it's start to be clarified and quite encouraging.
04:54You see, the, the, the pilot area, we also tend a bit in the, in the, in the pilot area,
05:01which will be a combination of residential, commercial, and logistic.
05:06And also, you see, the government has a piece of land in, in, in, in Sarlang, which is a data
05:14center.
05:15So, Lough Mott metropolitan is starting to, to have some formations.
05:19So, so for us, of course, if they have to assume some land for public interest, we just follow suit.
05:26But we are choosing, as Joanne mentioned, we, we, we try to choose some of our lands,
05:32which is close to the imminent developments.
05:35Well, I guess the land banking in the past did help.
05:38Yeah.
05:39Yes, yes.
05:39It's a good, it's a good problem to have.
05:41It's a good thing to have, yeah.
05:42Let's put it that way.
05:42I want to talk about offices and commercial.
05:45Where do you think we are in the recovery?
05:48Central is doing well.
05:49As you know, the, the Henderson is now 95% leased out.
05:56And we have a little problem for the Central Yacht because...
06:02A little problem.
06:03We have very little problem.
06:05A very little problem.
06:05Okay, okay.
06:06Yeah, because one single company has, has this 75% of the...
06:14We heard, yes.
06:15So actually we, there's only around 70,000 square feet to land out for the phase one.
06:23So the phase one will be delivered by the end of this year and to be open, hopefully around mid
06:30-year.
06:32So the central, the central is doing quite well.
06:35As you see, the occupancy is high and there's a little bit of upside adjustment for rental as a whole,
06:43not just us.
06:45But overall, the other areas are still challenging.
06:50It's not...
06:52The central is the central.
06:53The high end is the high end.
06:55But we see little, little progress in other areas.
06:59But of course, student hostel helps some of the outside areas like East Kowloon or the far west Kowloon.
07:10It's helped by the student hostel favor at the moment.
07:14Can I ask you about that?
07:15How quickly is this student boom boosting the profile of the real estate?
07:22I mean, lots has been written and talked about when it comes to the influx of students.
07:27Is that something that you want to leverage on?
07:28Like, how are you looking at this?
07:29We do have one experiment in Taipo last year.
07:35I think it's quite satisfactory.
07:37But conversion into from commercial or from industrial to student hostel is still quite costly.
07:47So it really worries.
07:50We do not have a lot of buildings available for changing into student hostels anyway.
07:59And the residential revise, so we do not really look at that.
08:05But I think it helped the banks to sell some of the restructure assets.
08:13I think it's good, actually, as a whole, because these restructure assets can be released.
08:20I want to get your take on the mainland as well.
08:22It looks like rental, when it comes to the commercial side, is seeing still low occupancy.
08:29Rents are also a bit down.
08:31I think you were down some 10% in the first half.
08:33Do you see signs of when this sort of sector actually returns to growth again?
08:40Just as a CFO, I do not really supervise day to day.
08:45But look at the numbers, I doubt there will be an immediate revival in rentals.
08:51That's how AI wave to cut the demand for office space.
08:59And looking at the numbers, I would be doubtful if there will be a short-term revival.
09:07Because of AI, you think?
09:09I think AI as a whole, well, the mainland's property market is still quite oversupply at the moment.
09:18And of course, AI and the job market do not help.
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