Hongkong Land Holdings (H78) H2 2024 earnings summary

Executive summary

• Strategic vision targets doubling recurring underlying profit and dividend per share by 2035, focusing on ultra-premium integrated commercial properties in Asia's gateway cities, with no new investments in standalone build-to-sell assets.

• Capital recycling is a top priority, with $300 million recycled in 2024 and a target of $4–6 billion by 2027, mainly from China build-to-sell wind-down and a retail asset sale in Thailand; net debt reduced by 5%.

• Leadership strengthened with new hires, including a Chief Investment Officer and Chief Corporate Officer, and a new LTIP aligning management with shareholder returns, launching from 2025.

• Sustainability recognized by inclusion in the Dow Jones Sustainability World Index, ranking in the top 6% globally.

Financial highlights

• Underlying profit was $724 million (excluding China non-cash provisions); reported underlying profit was $410 million, down 12% year-on-year, mainly due to lower Hong Kong Central contributions and Landmark refurbishment.

• Net debt declined 5% to $5.1 billion; net asset value per share fell from $14.49 to $13.57, reflecting Hong Kong office revaluation losses and inventory provisions.

• Full-year dividend per share increased 6% to $0.23 (23.0¢).

• Recurring rental income remained resilient, with gross rental income at $1,372 million in 2024.

• Non-cash inventory provision of $314 million taken on slow-moving China projects.

Outlook and guidance

• Hong Kong office rental reversions expected to remain negative in 2025, but inquiry levels are rising and flight to quality continues.

• Landmark trading to be impacted by ongoing renovations, affecting up to 40% of leasable area; luxury retail demand remains resilient.

• Singapore office portfolio expected to remain stable with low vacancies and limited CBD supply.

• Active monetisation of build-to-sell assets in China and further progress at West Bund, Shanghai.

• Capital recycling and maintaining a strong balance sheet remain top priorities.