Our Future Prospects also help to boost retail sales. We continue to offer shopping incentives in our retail malls to maintain In Hong Kong, demand for office space is expected to positive momentum. Nevertheless, a full recovery of the be weak in the second half of 2022, reflecting increased retail market depends on full reopening of the border vacancy rates and new supply. However, the flight-to- with the Chinese Mainland. quality is expected to continue. Assuming a gradual reopening of the international border and the border Despite the resurgence of COVID-19 in some of the cities with the Chinese Mainland and improvements in the in which we operate in the Chinese Mainland, we expect financial markets, the demand for Grade-A office space, demand for retail space to be stable and to recover particularly from financial institutions and professional steadily over the second half of this year. We also expect services companies, should increase. strong demand for space from retailers of luxury brands in Guangzhou and Chengdu, and stable demand for Taikoo Place is ever evolving, and with projects like Two space in Shanghai from retailers of luxury fashion, Taikoo Place, we are developing new office buildings of cosmetics and lifestyle brands, and from operators of high specifications which represent the future of work. food and beverage outlets. In Beijing, retail sales and The pre-leasing of Two Taikoo Place is making steady demand for retail space are expected to recover steadily progress, with a commitment rate approaching 50%. As in the second half of 2022. our first anchor tenant, Julius Baer, a Swiss private bank, will lease 92,000 square feet of office space. Additional In Beijing, Shanghai and Guangzhou, office demand and strategic tenants have been secured, including one of the market sentiment are expected to recover in the second biggest office lease transactions on Hong Kong Island in half of 2022 assuming COVID-19 restrictions continue recent years, with an anchor tenant for over 150,000 to be relaxed. However, the continued new supply of square feet of office space. office space in Shanghai and Guangzhou, particularly in emerging decentralised submarkets, is exerting We are also continuing the eastward expansion of our downward pressure on rents. Pacific Place portfolio in Hong Kong. We are making good progress on our new office tower opposite Three Pacific With our new investments, we have accelerated the pace Place, which will add approximately 218,000 square feet of our growth in the Chinese Mainland. We secured our of additional office space to our portfolio. first major investment in Xi’an earlier this year, a Taikoo Li concept which will be retail-led and specially designed for In June, we were delighted to win a land tender for a the Small Wild Goose Pagoda historical and cultural zone. residential site at 269 Queen’s Road East in Wan Chai. The Greater Bay Area holds enormous development This is a prime location with excellent potential for a new potential, and we are exploring opportunities to bring our premium residential product in the district. Taikoo Li and Taikoo Hui brands to Shenzhen. On the retail side, we anticipate that overall traffic and The outlook for our hotels remains challenging, with retail sales will continue to improve in our Hong Kong recovery dependent on the full reopening of the border malls, assuming the progressive relaxation of social with the Chinese Mainland combined with the relaxation distancing measures continues. The second phase of the of travel restrictions. However, we have embarked on an HKSAR Government’s consumption voucher scheme will active expansion strategy for our hotel management 13