Harbour City. Wharf s business began in a wharf and godown in Tsim Sha Tsui in 1886.

Transcription

1 Harbour City Wharf s business began in a wharf and godown in Tsim Sha Tsui in Urbanisation provided the defining opportunity for Wharf. The redevelopment of Harbour City turned Canton Road from a dilapidated street nobody dared to visit after sunset to the most high traffic focal point of TST today. THE WHARF (HOLDINGS) LIMITED Annual Report

2 BUSINESS ASSETS 169,074 9,550 OPERATING PROFIT 7,474 An international retail landmark, Harbour City takes a 7.1% of Hong Kong retail sales and sets new records in sales and retail revenue every year

3 BUSINESS ASSETS As at 31 December 2014 Properties (at valuation) 159, , % Hotel and club* (at valuation) 8,420 8,340 +1% Other assets 954 1,067-11% Total business assets 169, , % * Hotel and Club are stated at cost less depreciation in the financial statements Retail 5,674 4, % Office 2,121 1, % Serviced Apartments % Hotel and Club 1,454 1,372 +6% Total gross revenue 9,550 8, % OPERATING PROFIT 2014 Retail 5,066 4, % Office 1,793 1, % Serviced Apartments % Hotel and Club % Total operating profit 7,474 6, % Harbour City was valued at HK$168 billion at the end of 2014, representing an increase of 15% over and 39% of the Group s business assets. Revenue increased by 13% to HK$9,550 million and operating profit by 14% to HK$7,474 million. Retail In 2014, Hong Kong retail market saw a 0.2 percent year-on-year drop in sales, primarily due to the Mainland s anti-extravagance campaign that dented luxury spending and competition from Europe, Korea and Japan as their currencies continued to weaken relative to Hong Kong Dollar and Renminbi. The Occupy Movement towards the end of the year inflicted further damage. Harbour City again outperformed the market in a challenging retail environment. Total sales grew by 3.4% to set another record of HK$35 billion. Market share improved further to 7.1%, manifesting its productivity and leading position in the marketplace. Revenue to Harbour City from retail increased by 16% to HK$5,674 million. PROPERTY VALUE () 168,120 86, ,490 5,812 6, , ,110 ()9,550 7,508 8,471

4 Management, size and location are the key success factors contributing to the outperformance in a competitive retail landscape. With two million square feet of mall space, Harbour City is among the world s leading shopping destinations. It is the core of the Greater Harbour City cluster with six million square feet spanning vibrant shopping, entertainment, dining and lifestyle in Tsimshatsui s most dynamic retail area. Its presence strengthens the prominence of the region. The coveted Harbour City and its 530-metre contiguous retail frontage along Canton Road is well positioned as a global retail showcase for celebrated brands and has become the most sought-after location for the best-ofclass retailers. Demand from renowned fashion brands for expansion and flagship stores at Harbour City remains intense. New additions (Bvlgari and Valentino) and expansion (Prada) were committed on Canton Road. Other committed expansions included Celine, Jimmy Choo, Moncler and Roger Vivier. New openings or commitments further refined the diverse tenant mix. These included top performers across various trade categories such as fine jeweler Chaumet and Van Cleef & Arpels, as well as Italian fashion brand Armani Collezioni. Michelin star chef s Italian restaurant La Locanda by Giancarlo Perbellini, French fine dining Dalloyau and Wedgewood s Café opened their debut stores in Hong Kong at Harbour City. Jamie s Italian is also set to open its Kowloon debut at Harbour City. Following the opening of Uniqlo s largest flagship store in Kowloon in April, Page One s 37,000-square-foot full concept store and Versace s three-level full concept store were opened in late September and October respectively. Ocean Terminal s ( OT ) value-accretive renovation is progressing to plan. Upon completion of the new escalators and a new atrium at KidX as well as creation of three new shops taken up by Hublot, IWC Schaffhausen and Montblanc in Golden Mile, new retail and F&B attractions on the third floor will be created by mid Designed by Foster & Partners, the extension building plan for OT is approved. New culinary options with breathtaking panoramic views of the Hong Kong harbour and skyline will be offered at the extension building. A series of trade-mix enhancements as well as the renovation and extension of OT will further unleash retail value, add growth impetus and bring surprises and excitement to the customers

5 RETAIL TENANT MIX (by Rental, Area and Sales) % by Rental % by Area % by Sales Fashion Leather Goods - Shoes Bags & Related Trade Department Store, Confectionery Products Jewellery, Beauty and Accessories Restaurant, Fast Food, F&B, Entertainment Children's Wear, Toy & Related Trades Electrical & Audio-visual Equipment Sports Wear Others Total PORTFOLIO INFORMATION Gross Floor Area (sq ft) Revenue () Average Occupancy (%) Year-end Valuation () Retail 2,049,000 5, ,602 Office 4,263,000 2, ,108 Serviced Apartments 670, ,990 Hotel and Club 1,368,000 1, ,420 Office Demand at Harbour City was underpinned by business expansion and corporate upgrades. New lettings were largely supported by small to medium-sized requirements. Solid positive rental reversion increased revenue by 13% to HK$2,121 million. Rental rates for new commitments remained stable while occupancy reached 98% at year-end. Lease renewal retention rate held up at 83% during the year, with favourable rental increments. These included AIA, All Nippon Airways, Mizuho Corporate Bank and West Kowloon Cultural District Authority. Thanks to its favourable location and transportation, premium quality management, comprehensive ancillary features including the mega mall, three Marco Polo hotels, serviced apartments, a fitness centre and a private Pacific Club, Harbour City is a preferred office location for multinationals, as well as Mainland and local enterprises. These advantageous elements place Harbour City in an unrivalled position relative to pure offices. Serviced Apartments Revenue amounted to HK$301 million, with occupancy (excluding 61 apartments closed for renovation) climbing to 87% at year-end. Upon completion of the substantial renovation, the refreshed apartments will be better-positioned to cater to customers unique and sophisticated demands and enable the most discerning customers to enjoy an unmatched, tranquil and more blissful lifestyle