SWIRE PROPERTIES ANNUAL REPORT 2023 In the Chinese Mainland, foot traffic has improved Admiralty, we have completed Six Pacific Place, which has a significantly and retail sales have exceeded pre-pandemic commitment rate of approximately 40%, and we obtained levels for most of our malls since pandemic-related the occupation permit for the tower in February 2024. restrictions were lifted. Our office portfolio has proven to be In the Chinese Mainland, sales figures strongly exceeded resilient despite a weak office market. pre-pandemic levels across most of our malls. In the wake We recorded a small underlying loss from our property of this robust recovery, we expect 2024 to be a year of trading activities in 2023 as a result of sales and marketing market stabilisation, and we continue to hold a positive expenses incurred for several residential trading projects. outlook in the medium to long term. We are encouraged by Our hotel business in Hong Kong and the Chinese Mainland the current trends in consumer spending and domestic recovered strongly following the lifting of travel restrictions travel, and expect to see a further boost in the year ahead. and the reopening of the borders. We are excited to be establishing a presence in two important cities in the Chinese Mainland – Xi’an, the Our Future Prospects ancient capital of China with immense historical and We have been encouraged by the strong recovery of our economic significance; and Sanya, which is emerging as malls in Hong Kong, and we expect that footfall and one of the most popular domestic travel retail destinations tenants’ sales will continue to improve despite economic in the country. We have also significantly expanded our uncertainties and a volatile stock market. With our strong footprint in Shanghai with two new large-scale, mixed-use marketing campaigns and attractive loyalty programme developments in the city’s Pudong New Area. With four initiatives, we anticipate that the sales momentum will projects now in operation and under development across continue in 2024. Shanghai, we are pleased to be launching our premium residential brand in the city while opening up the Chinese The office market in Hong Kong is expected to remain Mainland market for further opportunities. subdued in 2024, on the back of weak demand and We also hold a positive outlook on the long-term prospects increased availability. Increasing competition from Central for the Greater Bay Area, which is experiencing significant and Kowloon East will continue to exert downward pressure development momentum. We are actively exploring new on rents across our portfolio. However we expect our office opportunities in Shenzhen, with plans for a new, ultra- spaces, with their industry-leading ESG certifications and luxury hotel under The House Collective brand, and we excellent amenity provisions, will continue to benefit from have signed a Strategic Framework Cooperation the ‘flight-to-quality’ trend. Agreement with the Futian District Government to explore Assuming improvements in the financial markets, and an new prospects. increase in economic activity, we expect the demand for Looking at residential opportunities, the Hong Kong market Grade-A office space, particularly from financial institutions remains soft amidst economic uncertainties, and we expect and professional services companies, to recover. that market confidence may take some time to recover. We will reach a major milestone this year with the However, we anticipate demand to remain resilient in the completion of the current redevelopment phase of Taikoo medium to long term, due to local demand and limited Place. Our new Taikoo Square will be a unique showcase of supply. We launched our newest project on Hong Kong urban biodiversity, alongside increased connectivity via our Island, LA MONTAGNE with our joint venture partners in new elevated walkways, and outdoor dining amenities to 2023, and 52 units have been sold to date. serve our vibrant office community in Quarry Bay. In 21