CHAIRMAN'S STATEMENT Investing in our Commercial Portfolios The Hong Kong retail market continued to be impacted by Our commitment to our home city is as strong as ever. With the pandemic and associated travel restrictions in 2022. approximately one third of our HK$100 billion set aside to The relaxation in COVID-19 travel curbs is an important reinforce our flagship portfolios in Hong Kong, we hope to step forward, and we remain confident in the long-term support the long-term competitiveness of the city as an position of Hong Kong as a global tourism and financial international financial centre. centre. Whilst it will take time for the market to fully recover, we expect to see some stability in the near term, Following the launch of Two Taikoo Place, we are nearing and our strong fundamentals will ensure that we can take completion of the current phase of our Taikoo Place advantage of the anticipated recovery in 2023. redevelopment. This HK$15 billion project has been We remain committed to reinforcing our core assets. In the instrumental in transforming Taikoo Place into a global context of our retail portfolio, we have made good use of business district, which has become the gold standard for the past two years to undertake renovations, and we will well-connected, holistically planned commercial space, continue to focus on expanding and elevating our tenant with diverse amenities and cutting-edge ESG credentials. mix, introducing innovative retail concepts to our malls, With these strong fundamentals, our office portfolio and launching immersive customer engagement initiatives. remains resilient in a weak office market, and we are in a Our loyalty programmes and newly refurbished VIP lounges prime position to benefit from the prevailing flight-to- have been well-received, and we are also exploring quality trend. crossover opportunities between some of our malls in As part of our masterplan for Taikoo Place, we obtained full Hong Kong and the Chinese Mainland to further enhance ownership of the Zung Fu Industrial Building in March 2022. our customer experience. Subject to Swire Properties having successfully bid in the compulsory sale of the adjacent Wah Ha Factory Building, Trading Portfolio and Venturing we intend to redevelop the two sites for office and into New Markets commercial use, which will grow our presence in the district We have allocated HK$20 billion to residential trading, with an additional 779,000 square feet of gross floor area. with an aim to expand in our core market of Hong Kong, In addition, we submitted a compulsory sale application and explore new markets in the Chinese Mainland and for a site on Tong Chong Street in June 2022. Subject to a South East Asia. Our teams have been making excellent successful bid, the development would form part of our progress in building out our trading pipeline. In Hong Kong long-term expansion plans for Taikoo Place. alone, we have three major projects in development. At Pacific Place, we are also making significant progress in We were delighted to win the bid for 269 Queen’s Road the eastward expansion of the office portfolio. Given the East, which will further strengthen and diversify our greater increasing importance of Admiralty with its enhanced Pacific Place portfolio. In addition, the launch of EIGHT mass transit connectivity, we intend to continue growing STAR STREET in 2022 received keen market attention and our commercial presence, with Grade A office space has enjoyed a strong sales performance to date. characterised by strong sustainability credentials, exceptional connectivity and a sense of community. In the Chinese Mainland, we plan to develop a boutique In December 2022, we announced that our new office luxury project in our upcoming Taikoo Li Xi’an development. tower at 46-56 Queen’s Road East has officially been This is an exciting opportunity for our residential brand, and named “Six Pacific Place”. Our office building 28 Hennessy we are keen to explore the regional market for further Road, which lies adjacent to Six Pacific Place, will be opportunities. renamed as “Five Pacific Place”, strengthening our flagship brand as a premium office address. 22