SWIREPROPERTIES(01972)2022-04-01 08:31Commercial Real Estate Development - Swire Properties reported a significant focus on commercial real estate development, with major projects in Hong Kong and mainland China, including six large commercial developments in Guangzhou, Chengdu, and Shanghai[3]. - The company signed a cooperation framework agreement with the Beijing Chaoyang District Government to transform a former bus maintenance site into a cultural and commercial landmark[7]. - The company opened the West District of Taikoo Li Sanlitun in Beijing in December 2021, enhancing its retail presence in the region[8]. - The company has a land reserve in Miami, USA, and is actively seeking opportunities in the Southeast Asian real estate market[3]. - The company plans to invest over HKD 100 billion in Hong Kong, mainland China, and Southeast Asia over the next decade, including a new project in Xi'an with an investment of approximately RMB 7 billion[26]. - The company aims to double the total floor area of its property portfolio in mainland China over the next decade, focusing on first-tier and new first-tier cities[28]. - The company is actively seeking investment opportunities in residential projects across Hong Kong, mainland China, and Southeast Asia[28]. - The company has ongoing residential projects in Hong Kong, Indonesia, and Vietnam, contributing to a diversified property portfolio[67]. Sustainability and Environmental Initiatives - The company achieved a 25% reduction target in absolute greenhouse gas emissions by 2025 and a 46% reduction by 2030, as part of its 1.5°C science-based carbon reduction goals[11]. - Swire Properties was recognized as a "Global Industry Leader" and "Global Developer Industry Leader" in the GRESB Sustainability Yearbook, ranking among the top seven globally and first in Asia[11]. - The company utilized all proceeds from green bonds for environmental projects, demonstrating commitment to green finance[15]. - The company aims for at least 50% of its financing to come from green bonds and loans by 2025[15]. - The company has set ambitious science-based carbon reduction targets, aiming to limit global warming to within 1.5°C, becoming the first property developer in Hong Kong and mainland China to have such targets approved[30]. - The company has signed the "Environmental Performance Charter" with 14 tenants, representing about 10% of all office tenants in Hong Kong[13]. - The company has launched a pilot program for "Smart Waste Reduction," applying innovative technology to improve waste separation rates among participating tenants[13]. - The usage of renewable energy in the company's properties in mainland China has increased to approximately 40%[34]. - The company has demonstrated a commitment to sustainability by using renewable energy at the Guangzhou Taikoo Hui since 2021[181]. Financial Performance - The company reported a basic profit attributable to shareholders of HKD 9.541 billion for 2021[15]. - Revenue for the year increased by 19% to HKD 15,891 million from HKD 13,308 million[16]. - Basic earnings attributable to shareholders decreased by 25% to HKD 9,541 million from HKD 12,679 million[16]. - Reported earnings increased by 74% to HKD 7,121 million from HKD 4,096 million[16]. - Net cash inflow from operations decreased by 7% to HKD 7,028 million from HKD 7,550 million[16]. - Net debt increased by 56% to HKD 10,334 million from HKD 6,605 million[16]. - The capital to net debt ratio rose by 1.2 percentage points to 3.5% from 2.3%[16]. - Total equity, including non-controlling interests, increased by 1% to HKD 294,158 million from HKD 290,680 million[16]. - The first interim dividend increased by 3% to HKD 0.31 from HKD 0.30[16]. - The second interim dividend increased by 5% to HKD 0.64 from HKD 0.61[16]. - The company's attributable profit for property investment in 2021 was HKD 8,663 million, a decrease of 7.4% from HKD 9,352 million in 2020[17]. - The fair value change of investment properties in 2021 was a loss of HKD 1,836 million, compared to a gain of HKD 4,096 million in 2020[17]. - The total assets for the company in 2021 amounted to HKD 304,492 million, a slight increase from HKD 297,285 million in 2020[17]. - The return on equity for 2021 was 3.3%, a decrease from 4.4% in 2020[17]. - The company’s total equity attributable to shareholders in 2021 was HKD 292,155 million, up from HKD 288,736 million in 2020[17]. - The interest coverage ratio for 2021 was 20.79, an increase from 14.41 in 2020, indicating improved ability to meet interest obligations[17]. Retail and Office Performance - The retail market in Hong Kong showed partial recovery in 2021, but has not yet returned to pre-pandemic levels, impacted by renewed social distancing measures[28]. - The office property portfolio in Hong Kong recorded stable returns with a high occupancy rate, supported by the redevelopment of Taikoo Place[28]. - The company achieved strong growth in retail sales in its malls, particularly in the second half of 2021, as local retail sales improved due to government support measures[33]. - The occupancy rate of the office property portfolio in Hong Kong was 97% as of December 31, 2021, reflecting a stable demand despite market challenges[78]. - The rental income from the company's mainland China malls significantly increased in 2021, driven by high foot traffic and strong retail sales, particularly in luxury goods[33]. - The rental income from the group's Hong Kong office properties for 2021 was HKD 6.12 billion, with a valuation of HKD 181.468 billion as of December 31, 2021[75]. - The rental income from the Hong Kong office property portfolio decreased by 5% compared to 2020, primarily due to the absence of rental income from a sold office building[78]. - The rental income for the retail portfolio decreased by 10% compared to 2020, partially due to the amortization of rent relief provided in 2020[88]. - The total rental income from the group's investment properties in mainland China increased by 24% to HKD 3.56 billion, reflecting a rise in retail sales and RMB appreciation[105]. - The rental income attributable to the group's retail properties in mainland China grew by 29% to HKD 4.39 billion, with a 17% increase after excluding rental support amortization and RMB appreciation effects[106]. Hotel Performance - The hotel business losses narrowed in 2021, with performance in mainland China and the United States being relatively better compared to Hong Kong, which was affected by ongoing travel restrictions[33]. - The average room revenue and occupancy rates for the hotels in Hong Kong were adversely affected by pandemic-related travel restrictions[160][161]. - The hotel "The Opposite House" in Beijing achieved a recovery in occupancy rates and average room revenue in 2021, ranking first in "Top Five Best Hotels in China" by Travel + Leisure[162]. - The hotel "The Temple House" in Chengdu received multiple awards, including being ranked third in Destination Deluxe's "Urban Hotel of the Year"[164]. - The hotel "The Middle House" in Shanghai experienced a strong recovery in average room revenue and occupancy rates in 2021, benefiting from robust domestic demand[165]. - The Miami East Hotel was sold to a third party in October 2021 but continues to be managed by the company, with strong recovery in occupancy rates and average room revenue[166]. - The company managed hotels reported an EBITDA of HKD 220 million in 2021, with performance in mainland China and the U.S. being better than in Hong Kong due to ongoing travel restrictions[159]. Future Outlook and Strategic Initiatives - The company plans to maintain a strong balance sheet and a prudent approach to capital management, focusing on targeted project investments and financing[40]. - The company aims to expand selectively into Southeast Asian markets while continuing to focus on Hong Kong and mainland China[39]. - In mainland China, the company will adopt a cautious approach to land acquisition, focusing on projects obtained through early discussions with local governments[38]. - The company has established a "New Ventures" department to introduce innovative technologies aligned with its business goals[34]. - The company plans to develop the "House Series" and "East Series" hotel brands as key elements of its integrated development projects[173].