Page 16 - Hang Lung Properties 2012 Annual Report

In Hong Kong, all segments in our investment portfolio performed
satisfactorily. Retail did the best where rental turnover advanced by
11%, while those for offices rose by 7% and for other miscellaneous
buildings 2%. On the surface, total rents received grew only 3%, but
comparing like with like by taking out discontinued properties, rent
actually increased by 9%. With the exception of serviced apartments,
all space is basically fully let.
Putting Mainland and Hong Kong together, we collected 10% more
rent while operating profit advanced by 11%. Mainland now accounts
for 50.5% of total rental turnover and 48.4% of operating rental profits.
The corresponding Hong Kong numbers were thus 49.5% and 51.6%.
In the past year, we saw the departure of two executive directors. We
must always do the right thing as enshrined in the tagline adopted early
last year. I firmly believe that the Company is today a better and stronger
one. The two vacancies were immediately filled by former deputies to
the two positions whom we have groomed for some time. Needless to
say, we will continue to build out our senior management team.
STRATEGIC CONSIDERATIONS
There is a common misunderstanding regarding Mainland China’s
shopping center business which warrants some discussion. It is
often said that competition is extremely keen and the increasingly
crowded market will be troublesome. Even the most sophisticated
institutional investors succumb to this mantra which is fundamentally
flawed. It shows a lack of understanding of the market as well as
industry dynamics.
Consider the fact that perhaps 95% of all shopping centers of
reasonable size are strata-titled. Mainly due to financial weakness,
almost all developers must cut up a mall into “bite-size” shops and
sell them off piecemeal, sometimes before building completion.
࠰ಥ˙ࠦdණྠҳ༟يุଡ଼Υlzٙ הϞي
ุѩ ڌତଣซfਠఙุٙਕ௰މ̈ЍdՉ
ॡږϗɝɪʺϵʱʘɤɓd፬ʮᅽʿՉ˼
يุٙॡږϗɝʱйɪʺϵʱʘɖʿϵʱ
ʘɚf዆᜗ॡږϗɝ ڌࠦɪසɪʺϵʱʘ
ɧdШࡊ ϔৰʊ୞˟ᐄ༶ٙ ي ุ˸ԶΝ
ˢdॡ ږϗɝྼሯɪʺϵʱʘɘfৰ؂ਕ
όభה̮dהϞيุਿ͉ɪΌ௅ॡ̈f
˸lzήձ࠰ಥΥ ࠇdණྠॡ ږϗɝɪʺϵ
ʱʘɤd຾ᐄ๐лɪʺϵʱʘɤɓflzή
ତЦॡ ږϗɝᐼᕘϵʱʘʞɤᓃʞdЦॡ
༣຾ᐄ๐лϵʱʘ̬ɤɞᓃ̬f࠰ಥٙ޴
Ꮠᅰοʱйމϵʱʘ̬ɤɘᓃʞʿϵʱʘ
ʞɤɓᓃʬf
ཀ̘ɓϋdҢࡁϞՇЗੂБ໨ԫᕎᔖf͍
νණྠ̘ϋڋપ̈ٙ˴ᕚ הԊdҢ ࡁ̀඲
˜̥፯λٙc̥ਂ࿁ٙ™f͉ɛ਺ڦdҢ ࡁ
ତί݊ɓ࢕һλһ੶ٙʮ̡f־ഃᕎᔖܝ
ٙᔖਕᎇу͟Չ˸ֻٙਓ˓ટಁdʮ̡ʊ
੃ԃ༈ԬΝԫεϋf຅್dҢࡁਗ਼ᘱᚃ੶
ʷ৷ॴ၍ଣྠඟf
೯࢝ഄଫ
ɛࡁ࿁׵ʕ਷lzήٙᒅيਠఙุਕd౷ཁ
πίഹɓࡈႬ༆d ࠽੻ਠ࿶f࿕੬ٙႭ ج
݊j̹ఙᘩنମ੬ዧडd˚ूኹᏚ̹ٙఙ
ਗ਼һᗭᏐ˹fуԴ௰ዝᇖٙዚ࿴ҳ༟٫͵
ڦ؂׵வࡈᔬႬdˀ݈əɛ ࡁ࿁̹ఙձุ
ޢ༶Ъॹ˶Ⴉᗆf
ԫྼɪdߒɘϓ̒೹Ո஝ᅼٙਠఙேኹϞ
εุࠠᛆf˴ࠅᖟ׵༟ ږʔԑd఻˷ הϞ
೯࢝ਠѩҪਠఙʱװ ϓމ˜ʃۨ™ਠ⧕̈
ਯdϞࣛޟЇίਠఙໝϓ ۃʊ຾வᅵਂf
໨ԫߧڗٰ؇Ռ CHAIRMAN’S LETTER TO SHAREHOLDERS
16 | 㛬ඤήପϞࠢʮ̡ ɚཧɓɚϋϋజ HANG LUNG PROPERTIES LIMITED ANNUAL REPORT 2012