REG - Hongkong Land Hldgs Jardine Matheson Hdg - INTERIM MANAGEMENT STATEMENT

Hongkong Land HoldingsAnnouncement

Tue 12:30

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RNS Number : 9447E  Hongkong Land Hldgs Ltd  19 May 2026

Announcement

 

HONGKONG LAND HOLDINGS LIMITED

Interim Management Statement

 

19 May 2026 - Hongkong Land Holdings Limited (together with its subsidiaries,
"Hongkong Land" or the "Group") today issues an Interim Management Statement
for the first quarter of 2026.

 

Strategy Update

The Group continues to build on the strategic clarity outlined in our
Strategic Vision 2035, with a focus that remains firmly on generating
long-term value for our shareholders.

 

Sustained capital recycling efforts in 2026 have resulted in a further US$0.6
billion in net proceeds secured during the period, resulting in cumulative
capital recycled of US$3.6 billion representing 90% of our target to recycle
at least US$4 billion by the end of 2027.

 

In February, the Group established its inaugural private real estate fund -
Singapore Central Private Real Estate Fund ("SCPREF" or the "Fund") with S$8.2
billion (US$6.4 billion) of assets under management ("AUM").  The seed
portfolio includes equity interests in One Raffles Quay, Marina Bay Financial
Centre Towers 1 and 2, One Raffles Link, and Asia Square Tower 1. Hongkong
Land is the General Partner and Manager of the Fund, and retains a majority
stake in SCPREF at inception, as a founding investor along with Qatar
Investment Authority and APG Asset Management.  The establishment of SCPREF
reflects the Group's continued commitment to optimise its capital structure
and enhance the long-term value of its Singapore assets. This was also a
significant step for the Group to build a scalable third-party capital
platform, a key part of the Group's new strategy to position the business for
the future.  The Group is actively assessing growth opportunities for SCPREF,
with a goal of increasing AUM to S$15 billion (US$11.7 billion) within five
years.

 

In March, the Group completed the acquisition of 10.8% interest in Suntec Real
Estate Investment Trust ("Suntec") for a total consideration of S$541 million
(US$422 million), enabling partial redeployment of recently recycled capital
into prime-income producing commercial assets predominantly located in
Singapore, a segment in which the Group has a positive outlook and strong
conviction.  The Group recognises Suntec's potential to unlock value across
its portfolio and improve shareholder returns.

 

As part of the Group's commitment to deliver on the ambitions outlined in its
Strategic Vision 2035, an organisational redesign has been initiated to
implement a portfolio-led operating model with an aim to enhance and deliver
"platform-ready" performance.  The new leadership structure comprise four
portfolio Chief Executives to enhance asset-level accountability and improve
financial performance across Hong Kong Central, SCPREF, Westbund Central, and
the remainder of the Group's Chinese mainland portfolio, whilst a refreshed
Management Committee provides centralised governance and oversight across the
Group. This ongoing transformation is expected to be undertaken in stages
through to the end of 2026.

 

Since the announcement of the first tranche of the share buyback programme in
April 2025, the Group has invested US$372 million in share buybacks and
reduced shares in issuance by 2.7%. Approximately US$278 million of capacity
remains to be invested through mid-2027.

 

Overall Results

Underlying profit in the quarter was 5% higher than the first quarter of 2025,
primarily due to lower net financing charges offsetting reduced contributions
from Singapore following the disposal of Marina Bay Financial Centre Tower 3
("MBFC Tower 3") prior to the formation of SCPREF.

 

Prime Properties Investments

Hong Kong

Profit contribution from the Hong Kong Central portfolio in the first quarter
was broadly in line with the same period last year with higher retail rents
and lower costs broadly offsetting lower office rents.

 

Office rental income was slightly lower due to negative rental reversions on
lease renewals and rent reviews. Demand for prime Grade-A offices in Central
has strengthened in recent months with market rents now growing amidst tight
supply for best-in-class buildings.  Demand has largely been driven by
tenants from the asset management, financial services and technology sectors.
This has resulted in a significant narrowing of negative rental reversions
year-to-date.  On a committed basis, vacancies declined further to 5.5% at 31
March 2026, compared to 6.0% at the end of 2025, while physical vacancy was
stable at 7.0%.

 

The LANDMARK retail portfolio's rental contributions increased slightly
compared with the first quarter of 2025, despite over 30% of lettable space
under renovation as part of the ongoing Tomorrow's CENTRAL transformation.
This performance underscores the resilience of ultra-high-net-worth spending
and LANDMARK's position as Asia's premier luxury retail destination. Tenant
sales and top-tier customer spend were both higher compared with the same
period last year.  Average effective rents were higher than the first quarter
of 2025 as new leases recently commenced for a number of flagship Maison
stores.

 

Singapore

Contributions from the Group's Singapore portfolio were lower during the
quarter compared to prior year, primarily due to the divestment of the Group's
33⅓% stake in MBFC Tower 3 in December 2025 ahead of the establishment of
SCPREF in February 2026. The SCPREF portfolio delivered solid operating
performance during the period, benefitting from a sustained flight-to-quality
trend amongst occupiers and a favorable supply-demand dynamic in the Marina
Bay CBD. Leasing activity was healthy, the portfolio recorded positive rental
reversions during the quarter. Uncommitted vacancy was 4.1% as at 31 March
2026.

 

Chinese mainland

Contributions from the Group's portfolio on the Chinese mainland increased
compared with the first quarter last year, driven by the incremental rental
income from projects newly opened in 2025, including JLC, Chongqing The Ring
Garden City, and Shanghai The Ring Live Galaxy Midtown, as well as positive
rent reversions resulting from trade-mix upgrading at several of our existing
retail malls. Occupancy levels across the portfolio remained healthy.

 

We continue to make good progress on our flagship Westbund Central development
in Shanghai, which has a total gross floor area of 1.7 million sq. m. with
expected completion in phases through 2029. Within Phase 2 of the project, a
new contemporary fashion and lifestyle retail component with a net leasable
area of 27,000 sq. m. was launched in May 2026 with a committed occupancy of
nearly 80%.

 

Outlook

2026 full-year earnings outlook has improved, with underlying profit expected
to be mildly higher than the prior year supported by positive leasing
sentiment in Hong Kong and proactive cost management across the business.

 

Hongkong Land is a major listed property development, investment and
management group. It focuses on developing, owning and managing premium and
ultra-premium mixed-use real estate in Asian gateway cities, featuring Grade A
office, luxury retail, residential and hospitality products. With over US$50
billion in assets under management, Hongkong Land's ultra-premium mixed-use
real estate footprint spans over 1.97 million sq. m. lettable area in
operation and 1.43 million sq. m. lettable area under development, with
flagship mixed-use projects in Hong Kong, Singapore and Shanghai. Its
properties hold industry leading green building certifications and attract the
world's foremost companies and luxury brands. Established in 1889, Hongkong
Land takes a long-term view, investing significantly alongside its capital
partners and concentrating its portfolio where it can create the most value
for tenants, customers and investors. Hongkong Land Holdings Limited has a
primary listing on the London Stock Exchange, with secondary listings in
Singapore and Bermuda. Hongkong Land is a member of the Jardine Matheson
Group.

 

- end -

 

For further information, please contact:

 

 Hongkong Land
 Mark Lam       (852) 2842 8211
 Gary Leung     (852) 2842 0601

 

SEC Newgate

 Will Brocklehurst  (852) 6021 8313

 

This and other Group announcements can be accessed through the Internet at
'www.hkland.com'.

 

 

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