Experience is central ™
Annual Report
2024
is a major listed property investment, management
and development group. Founded in 1889, it is a market leader in the development of
experience-led city centres that unlock value for generations by combining innovation,
placemaking, exceptional hospitality and sustainability.
The Group focuses on developing, owning and managing ultra-premium mixed-use real
estate in Asia’s gateway cities, featuring Grade A office, luxury retail, residential and
hospitality products. Its mixed-use real estate footprint spans more than 830,000 sq. m.,
with flagship projects in Hong Kong, Singapore and Shanghai. Its properties hold
industry-leading green building certifications and attract the world’s foremost
companies and luxury brands.
The Group’s Hong Kong Central portfolio represents some 450,000 sq. m. of prime
property. LANDMARK, the luxury shopping destination of the Hong Kong Central
portfolio, is undergoing a three-year, US$1 billion expansion and upgrade, which
aims to reinforce the portfolio as a world-class destination for luxury, retail, lifestyle
and business. The Group has a further 165,000 sq. m. of prestigious office space in
Singapore, mainly held through joint ventures, and five retail centres on the Chinese
mainland, including a luxury retail centre at Wangfujing in Beijing.
In Shanghai, the Group owns a 43% interest in a 1.1 million sq. m. mixed-use project
in West Bund. Due to complete in 2028, it will comprise of Grade A offices, luxury and
retail space, high-end waterfront residential apartments, hotels and convention and
cultural facilities. Alongside LANDMARK, it forms part of the Group’s CENTRAL Series
of globally-recognised destinations for luxury and lifestyle experiences.
Hongkong Land Holdings Limited is incorporated in Bermuda and has a primary
listing in the equity shares (transition) category of the London Stock Exchange, with
secondary listings in Bermuda and Singapore. Hongkong Land is a member of the
Jardine Matheson group.
Corporate Overview
Inside Front
Corporate Information
2
Highlights
3
Experience is central™
4
Introducing a New Strategy to Focus on
Our Core Strengths
6
Becoming the Leader in Experience-Led City Centres
8
How We will Create Long-Term Value
12
Financial Review
14
Sustainability
20
Directors’ Profiles
22
Financial Statements
24
Independent Auditor’s Report
78
Five Year Summary
84
Responsibility Statements
85
Corporate Governance
86
Shareholder Information
115
Offices
116
Report of the Valuers
118
Major Property Portfolio
119
Contents
Corporate Information
Directors
John Witt Chairman
(appointed as Chairman on 28 October 2024)
Michael Smith Chief Executive
Robert Wong Chief Executive
(stepped down on 31 March 2024)
Craig Beattie Chief Financial Officer
Stuart Grant
Lily Jencks
Ben Keswick
(stepped down as Chairman and Director on 28 October 2024)
Adam Keswick
Lincoln K.K. Leong
Ming Mei
(joined the Board on 10 October 2024)
Anthony Nightingale
(stepped down on 31 January 2024)
Christina Ong
(stepped down on 28 October 2024)
Y.K. Pang
(stepped down on 31 March 2024)
Company
Secretary
Jonathan Lloyd
Registered Office
Jardine House, 33-35 Reid Street, Hamilton, Bermuda
Executive
Management
Michael Smith Chief Executive
Craig Beattie Executive Director and Chief Financial Officer
Kenneth Foo Executive Director and Chief Property Management Officer
Kong Kei Yeuk Executive Director and Chief Commercial Officer
Michelle Ling Executive Director and Chief Investment Officer
(joined on 6 January 2025)
John Simpkins Executive Director and General Counsel
Jacqueline Tan Executive Director and Chief Corporate Officer
Raymond Wong Executive Director and Chief Development Officer
Yolice Wu Executive Director and Chief People & Culture Officer
Hongkong Land
2
• Strategic Vision to 2035 launched
• Underlying profit down 44% to US$410 million (down 12% to US$724 million
excluding provisions)
• Prime portfolios continued to be underpinned by market-leading occupancy levels
• Build-to-sell contributions from the Chinese mainland excluding provisions up over 40%
from the prior year
• Capital recycling initiatives progressing
• Group financial position remains strong; net debt reducted by US$0.3 billion
• Final dividend at US¢17.00 per share, up 6%
Results
2024
2023
Change
US$m
US$m
%
Underlying profit attributable to shareholders*
410
734
(44)
Underlying profit excl. Chinese mainland non-cash provisions #
724
824
(12)
Loss attributable to shareholders
(1,385)
(582)
138
Shareholders’ funds
29,940
31,965
(6)
Net debt
5,088
5,371
(5)
US¢
US¢
%
Underlying earnings per share*
18.56
33.15
(44)
Underlying earnings per share excl. Chinese mainland non-cash provisions #
32.81
37.22
(12)
Loss per share
(62.76)
(26.29)
139
Dividends per share
23.00
22.00
5
US$
US$
%
Net asset value per share
13.57
14.49
(6)
* The Group uses ‘underlying profit attributable to shareholders’ in its internal financial reporting to distinguish between ongoing business
performance and non-trading items, as more fully described in Note 30 to the financial statements. Management considers this to be a key
measure which provides additional information to enhance understanding of the Group’s underlying business performance.
# Excludes net provisions for the Chinese mainland build-to-sell segment
A final dividend of US¢17.00 per share will be payable on 14 May 2025, subject to approval at the Annual General Meeting to be
held on 2 May 2025, to shareholders on the register of members at the close of business on 21 March 2025.
Highlights
Annual Report 2024
3
Hong Kong
Our Portfolio in 2024
Hongkong Land develops,
manages and invests in real
estate that defines the core of
Asia’s cities.
Our mission is to create experience-led city centres
that unlock value for generations, because we view
city centres as the ultimate sources of connection,
inspiration and innovation.
Our Ambition
In 2024 we affirmed a new strategic direction, to
become the leader in Asia’s gateway cities focused
on ultra-premium integrated commercial properties.
Achieving this ambition means focusing on four
long-standing strengths within our business and
matching this to the potential which exists within
key Asian markets.
Innovation –
We were the first to champion the reclamation of
new land and bold thinking remains at the forefront as
we grow our ambition in line with our new strategy.
Hospitality –
We are deepening strong relationships and
partnerships, with attention to detail on the needs
of today and tomorrow’s customer.
Defining City-centres –
From Singapore to Shanghai, we invest in central
locations and with our new strategy will expand our
horizons in the future.
Excellence –
Since 1889, we have been known for our visionary
leadership. We invest in places to ensure they remain
magnets for people and business.
Our Chairman (page 6) and Chief Executive (page 8)
share more about our new strategy, and read how we
will create value on page 12.
Experience
is central ™
830,000+m²
Prime Mixed-Use Properties
US$1.3 billion+
Annual Gross Rental Income
135+
Years of Excellence
Hongkong Land
4
Hongkong Land
4
Singapore
Shanghai
The Anchors to
Our Portfolio
Our flagship properties
in Hong Kong, Singapore
and Shanghai are the base
from which we grow across
the region.
Hong Kong
The Central Portfolio consists of 12 interconnected prime commercial buildings, providing
over 4 million sq. ft of Grade A office and luxury retail space. ‘Tomorrow’s CENTRAL’, a more
than US$1 billion retail transformation in partnership with our luxury tenants, will continue
to reinforce Central as a world-class destination.
Singapore
Our portfolio includes Marina Bay Financial Centre, one of Asia’s most ambitious mixed-use
developments, pivotal in creating an expansive financial district for the Lion City.
Shanghai
At 1.1 million sq. m., Westbund Central is the largest commercial project underway in Asia.
Its high-quality retail and office offering is gaining strong momentum, with global and
leading local companies and brands moving to secure space in the development ahead
of its completion.
Our Values
How we operate is fundamental to how we build better places, deliver on our strategy, and achieve long-term success.
Always Forward
We innovate to maintain our
competitive edge and earn the
confidence of our investors and
customers, who trust us to keep
them ahead of the curve.
Think in Generations
Dedication to quality is the
cornerstone of our success. We act
as stewards of craftsmanship with
a vision for the long-term.
Be a Bridge
Lasting relationships create lasting
business. We are trusted partners
fostering meaningful connections
between colleagues and customers.
Annual Report 2024
5
Annual Report 2024
5
Chairman’s Overview
It is my pleasure to be writing to you for the first time as
Chairman of Hongkong Land.
2024 was a transformational year for Hongkong Land.
Following the appointment of Michael Smith as Chief
Executive in April, the Group embarked on an in-depth
review of its business strategy, with the goal of setting clear
long-term growth objectives and targets to deliver enhanced
shareholder value. This process concluded in October with
the announcement of a new strategic direction, underpinned
by a range of enhancements to our governance, including the
composition and operation of our Board and Committees.
A New Strategic Direction for
Hongkong Land
As a result of the strategic review, the Group’s clear ambition
is to become the leader in Asia’s gateway cities focused on
ultra-premium integrated commercial properties. The new
strategy reinforces Hongkong Land’s core capabilities,
generate growth in long-term recurring income and deliver
superior returns to shareholders.
Our priority is now to simplify the business, with a primary
focus on ultra-premium mixed-use commercial properties in
Asia’s gateway cities. As a result, we will no longer invest in
the build-to-sell segment, but will instead actively recycle
capital out from this segment into new integrated commercial
property opportunities.
Anchoring the portfolio will be the Group’s existing flagship
prime mixed-use projects in Hong Kong, Singapore and
Shanghai, which provide a resilient base of significant
recurring earnings to support future investments in Asia’s
gateway cities.
This strategy will, in time, enable us to focus on a smaller
number of ultra-premium projects consistent with Hongkong
Land’s brand name and reputation. In order to deliver
enhanced shareholder value, the Board agreed clear long-term
growth objectives and targets with management, supported
by near-term performance metrics.
This new strategy is not expected to be reliant on group
net debt or funding from shareholders, preserving our
investment grade credit-rating. The speed at which we can
implement our plans will rely on our capital recycling and
management capabilities.
Given the size and diversity of the Group’s existing real
estate portfolio, the new strategy is expected to take a
number of years, with progress to be measured across
three implementation phases. Phase one primarily focuses
on the recycling of capital and establishment of deal sourcing
and fundraising capabilities. Further phases involve the
deployment of capital into long-term prime properties
investment opportunities, accompanied by active capital
recycling and third-party capital initiatives.
Strengthening Our
Corporate Governance
The Board and its Committees, and senior management,
together play a key role in delivering against our priorities.
The effective delivery of our strategy depends on high quality
debate around the boardroom table, with strong contributions
from all Directors.
This year marked a new beginning for Hongkong Land.
Michael successfully led the Group’s strategic review.
On 28 October, I became the Chair of the Board and the
Remuneration and Nominations Committees. As management
continues to focus on growing shareholder value and returns,
the Board aims to provide both challenge and support, with
effective discussion and decision-making.
Introducing a
New Strategy to
Focus on Our
Core Strengths
Hongkong Land
6
We especially value the opportunity to leverage the industry
expertise and experience of the Company’s Non-Executive
Directors. In October, we were delighted to welcome Ming Mei
as an Independent Non-Executive Director and as a member
of the Remuneration and Nomination Committees.
In 2024, we focused on reshaping our governance framework
and how it operates, in a way that supports the implementation
of the Group’s new strategy. We established an Investment
Committee of the Board at the end of October, to support
management on material strategic decisions relating to capital
expenditures, partnerships and transactions.
We have also updated the Committees’ terms of reference
and enhanced their operation, to enable them to play an
important role in supporting the Board through their more
in-depth focus on relevant matters, leveraging the skillsets
and experience of the members of each Committee.
Finally, I want to express our gratitude to our former Chief
Executive Robert Wong, for his over 38 years’ outstanding
service to the Group. Also to my predecessor Ben Keswick,
for his significant contribution over many years as Chairman
and Director. Further thanks and acknowledgements must be
made to Anthony Nightingale, Y.K. Pang and Christina Ong,
who all stepped down from the Board in 2024; and Graham
Baker and Adam Keswick, who stepped down from the
Remuneration and Nominations Committees respectively.
We will continue to benefit from Adam’s expertise as a
Non-Executive Director.
Embedding Sustainability into
Everything We Do
Our continued commitment and strong performance on
sustainability initiatives was recognised in a number of ESG
ratings. The Group was awarded a top Global Real Estate
Sustainability Benchmark (GRESB) score of 100 for the
Development Benchmark (Diversified), the highest score
globally. In addition, the Group was named Global Listed
Sector Leader (Diversified Sector) under both GRESB’s
Standing Investment and Development benchmarks.
Additionally, for the first time, we were included as a
constituent of the Dow Jones Sustainability World Index,
placing us among the top 6% of global performers. The Group
also qualified as a constituent of the Dow Jones Sustainability
Asia Pacific Index for the third consecutive year.
There was good progress in 2024 against the Group’s 2030
decarbonisation targets, which were validated by the Science
Based Targets initiative in 2022. Absolute Scope 1 and 2
carbon emissions reduced by 33% against a 2019 baseline.
Increasing procurement of renewable energy and
implementation of further energy efficiency initiatives
in the coming years will be critical to achieving our 2030
target, as the Group’s pipeline of commercial properties
are progressively completed.
From increasing green building certification and sustainable
financing, to reducing commercial waste, and enhancing
collaboration between tenants and our teams, we have taken
a holistic approach to continually enhancing the sustainability
of the business.
Finally, I am delighted we continue to make strong advances
in our corporate citizenship ambitions. In 2024, Hongkong
Land HOME FUND hit a milestone of supporting half a
million people across Asia. We take great pride in making
a meaningful contribution, through time, expertise and
investment, to our local communities.
Sustainable development remains at the top of our agenda.
Going forward, we continue to set ambitious targets across
the business and collaborate closely with our stakeholders to
deliver on them.
Focusing on the 10 Years Ahead
Looking ahead, the Group is focused on undertaking the initial
phase of work to position the business to deliver on its new
strategy, which primarily include the recycling of capital, the
establishment of deal sourcing and fundraising capabilities,
and delivering our pipeline of integrated commercial projects
across the Chinese mainland and the wider region.
While there are macroeconomic challenges ahead, we are
optimistic on the long-term potential for ultra-premium
integrated commercial assets in selected Asia’s gateway
cities and will continue to actively seek new investment
opportunities in these markets.
On behalf of the Board, I would like to express my appreciation
to our shareholders, our valued partners and to the wider
community for your continued support. Most of all, thanks
must go to our colleagues, who are the key to our success,
for their exceptional work throughout the past year.
John Witt
Chairman
Annual Report 2024
7
Introducing a New Strategy to
Realise Our Ambition
In October, I announced that we will strategically focus our
growth in ultra-premium integrated commercial assets in
Asia’s gateway cities. This includes continuing to invest in our
existing gateway cities’ portfolios, whilst also seeking out new
opportunities in other regional gateway cities.
To fund this growth, we will recycle up to US$10 billion over
the next 10 years, primarily from three main sources – winding
down existing inventory from the build-to-sell segment
across the entire Group, divestment of non-core commercial
assets, and recycling mature prime property assets into REITS
and other third-party capital vehicles. While the target of
US$10 billion will adjust from year-to-year depending on
market conditions, a greater share is expected to be realised
in the short to medium term, with an initial estimated target of
US$4 to 6 billion by 2027.
The exit from the build-to-sell segment is a strategic pivot
for our business, with no new standalone investments to be
made in this segment. The capital currently invested in this
segment will, in time, produce superior shareholder returns
as we redeploy capital to prime commercial assets that will
produce growth in resilient recurring income.
We have a long track record of being a steward of
shareholders’ capital. In time, we will look to bring in
third-party capital in a more disciplined and systematic way,
to support our growth ambitions and to improve returns
on our equity. Finally, we will evolve our capital allocation
framework with more discipline and an absolute focus on
creating shareholder value.
Becoming
the Leader in
Experience-Led
City Centres
Chief Executive’s Review
It has been an incredible first year as Chief Executive of
Hongkong Land. I am proud to lead a business built on a
legacy of innovation and exceptional hospitality – ever since
we reclaimed land to build Hong Kong’s iconic Central district
over 135 years ago.
Today, Hongkong Land has unique, world-class assets and
developments in Asia’s greatest cities – from Singapore to
Shanghai, with a coveted portfolio of over 2,500 premium
tenants, including the world’s leading corporations and most
prestigious luxury brands. The Hongkong Land brand travels
across geographies in this region and beyond, with blue chip
tenants, investment partners and high-net worth customers
who know us and trust us.
For us, Experience is central. More than a tagline, this sums
us up as a business. We harness our heritage and real-estate
expertise to realise our vision for city centres that connect
and inspire for generations to come. The targets we have set,
plans we have agreed and changes we are making to our
business model will enable us to do this for another century.
When we take our fundamental strengths together, mapped
against a comprehensive assessment of where the growth
opportunities are across Asia, it has crystallised into the core
elements of the new strategy we will pursue. In short, our
ambition is to become the leader in Asia’s gateway cities
focused on ultra-premium, integrated commercial properties.
Hongkong Land
8
Starting a New Chapter for
Hongkong Land
The roll-out of the new strategy has already commenced,
with the initial phase focused on the recycling of capital as
well as the establishment of deal sourcing and fundraising
capabilities. In January 2025, we welcomed Michelle Ling to
the newly created role of Chief Investment Officer. Michelle’s
focus will be on formulating and implementing investment
and capital management strategies, while also facilitating
the Group’s growth through strategic transactions. With over
20 years of experience in the real estate sector, encompassing
both private and public domains, Michelle brings a wealth of
expertise to our organisation and we are excited to have her
on board.
Our people will sit at the centre of making this new future
for Hongkong Land a reality. Guided by redefined values
that empower our colleagues, and with talent development
programmes in progress, we are matching our commitment
to excellence in everything we do, with action that grows
a best-in-class team. At the end of last year, we removed
the barriers that existed between teams based on their
geographies, to deepen a culture of collaboration
and innovation.
Additionally, a new share-based Long-Term Incentive Plan
(LTIP) has been introduced for senior leadership effective
from 1 January 2025, to align senior management’s interests
with those of shareholders. The plan will principally reward
senior leadership based on Total Shareholder Returns (TSR)
over a three to five year period, measured both in absolute
terms and with reference to a basket of real estate peers’
TSR performance.
In capturing what makes Hongkong Land unique within our
business strategy, and the way our people work, the Board
and I have agreed there also needs to be greater visibility to
the wider world. At the end of 2024, we introduced a new
visual and corporate identity for Hongkong Land – one which
captures our strengths, our premium position and our
aspiration for the future. And in February 2025, we began
the roll-out of Experience is central to embed our new
branding across our portfolio.
Making Major Investments in
Our Portfolio
Our portfolios in Hong Kong, Shanghai and Singapore are
the anchors to our new strategy. Investments announced
in 2024 epitomise the strategic focus on ultra-premium
integrated commercial properties, that will deliver value
over the long-term.
In June 2024, the Group started work on the Tomorrow’s
CENTRAL transformation to reinforce Central Hong Kong as a
world class destination for luxury retail, lifestyle and business.
This project involves a US$1 billion strategic investment, of
which US$400 million will be met by the Group.
An Overview of Our Operations
Despite an uncertain macro-economic backdrop,
Hongkong Land delivered a resilient performance for
the year. Contributions from the Prime Properties Investment
segment were lower, although our commercial portfolios
across the region outperformed their respective markets.
The contribution from the build-to-sell segment decreased
due to the non-cash provisions recognised in the Chinese
mainland business, however excluding this charge, earnings
were 29% higher than the prior year.
Profits from Prime Properties Investments in 2024 were
5% lower than the prior year, primarily a result of lower
contributions from the Group’s Hong Kong Central Portfolio,
partially offset by better performances in the office portfolio
in Singapore. The value of the Group’s Investment Properties
portfolio at 31 December 2024 declined by 5%, mainly due to
lower market rents for the Hong Kong office portfolio.
Annual Report 2024
9
Becoming the Leader in Experience-Led City Centres
Hong Kong
The Group’s Central office portfolio remains the pre-eminent,
best-in-class office space in the market. Physical vacancy was
7.3% at year end, broadly unchanged from the end of 2023.
On a committed basis, vacancy was 7.1%, significantly lower
than the wider Grade A Central market vacancy level of 11.6%,
indicating our offices continue to be in high demand despite
subdued broader market fundamentals. The Group’s average
portfolio office rent in 2024 was HK$101 per sq. ft, down from
last year’s average of HK$106 per sq. ft. Grade A Central office
rents fell by as much as 13% in 2024. The weighted average
lease expiry of the office portfolio at the end of 2024 stood at
3.7 years. The Group’s Central office portfolio’s outperformance
of key benchmarks in the Central Grade A office market is
indicative of a market further bifurcating between the most
premium space and the rest. Our new strategy to focus on
ultra-premium office spaces indicates our portfolio is well
positioned to take advantage of supportive market conditions
when they occur.
Contributions from the Group’s luxury retail portfolio in Hong
Kong were lower in 2024 compared to 2023, due to planned
tenant movements as part of the Tomorrow’s CENTRAL
transformation. However, the ultra-high net worth segment
remained resilient, as customers with cumulative spending
of over HK$200,000 per annum increased by 1% compared
to 2023, despite a generally weak luxury retail market in
2024. This is an indication that Hong Kong continues to be
unrivalled as one of the world’s most attractive and diverse
cities that attracts ultra-high net worth individuals, and
LANDMARK is the destination of choice for them to spend.
Average retail rent in 2024 increased to HK$210 per sq. ft
from HK$203 per sq. ft due to positive rental reversions.
Vacancy on both a physical and committed basis remained
low at 3.0%, despite tenant relocations as a result of the
works in progress.
Upon completion of the Tomorrow’s CENTRAL transformation
over a three-year period, LANDMARK will house 10 world-class
multi-storey Maison destinations. A 20,000 sq. ft flagship
Sotheby’s retail space opened in 2024 with two more exciting
Maisons expected to open in 2025. The Maisons will meet our
luxury tenants’ demand for additional luxury retail space to
house their integrated and experiential offerings, to cater to
LANDMARK’s deep pool of loyal and discerning clients. This
will also further expand the Group’s regional market share
and leadership in the luxury goods segment.
The value of the Group’s Investment Properties portfolio
in Hong Kong at 31 December 2024, based on independent
valuations, declined by 5% to US$22.8 billion (excluding
impact of accounting reclassification for areas occupied by
the Group), as a result of a decline in market rent for HK office.
Singapore
The Group’s Singapore office portfolio delivered another year
of strong operational performance. Physical vacancy at the
Group’s office portfolio was 1.6% at the end of 2024, while on
a committed basis vacancy was 1.0%, compared to 0.9% at
the end of 2023. Average rent increased to S$11.1 per sq. ft
in 2024, up from S$10.9 per sq. ft in the previous year. The
weighted average lease expiry of the office portfolio at the
2024 year-end stood at 3.3 years (2023: 3.1 years). The
valuation of the Investment Properties portfolio in Singapore
was stable year over year.
Chinese mainland & Macau
Performances were mixed during the year, with contributions
in ONE CENTRAL Macau reducing due to the impact of
planned mall renovations, as well as a weaker operating
environment. Conversely, contributions from the Group’s
luxury retail mall in Beijing, WF CENTRAL, increased
compared to the prior year, driven by tenant mix
optimisations despite a challenging market landscape.
The first component of West Bund, the Group’s mega-
development in Shanghai, was completed in 2024 with
resounding success, as 80 luxury residential units were
handed over to buyers in 2024. These ultra-premium
residential units were sold at prices amongst the highest in
the Shanghai primary residential market, which is evidence
that the Group’s products continue to be highly sought-after.
Completion of the other components is expected to occur in
phases from 2025 to 2027.
Development of luxury retail projects in Suzhou and
Chongqing progressed well, with openings scheduled in 2027.
Four Mandarin Oriental hotels are under construction in
mixed-use projects, bringing the number of hotels in
operation and under development to eight.
A Review of Our
Build-To-Sell Segment
Although earnings from the Group’s build-to-sell business
were lower in 2024 compared to 2023, this was as a result
of US$314 million net non-cash provisions in the Chinese
mainland build-to-sell segment recognised during the year.
Excluding the provision, contributions from the build-to-sell
segment increased by 29% compared to 2023.
As the Group had moderated its pace of land banking for the
build-to-sell segment since 2022 and will no longer deploy
capital into new opportunities, contributions is expected to
decline over the next several years as capital is recycled.
Hongkong Land
10
The Group remains in a robust financial position with a
pipeline of ultra-premium properties under development.
Capital recycling initiatives will be prioritised in line with our
new strategy.
Looking Forward
Over the past several years, we have witnessed a growing
divergence between the performances of the highest quality
commercial spaces and the rest. Our properties across
the region are highly sought after and enjoyed sustained
outperformance relative to their respective markets. Our
strategic focus on ultra-premium commercial properties will
further solidify our position to deliver sustainable growth over
the long-term.
We will continue to curate a portfolio in Hong Kong and across
the region that continues to set new standards in place creation.
We will progress the evolution of our business operations
in line with our strategy and Sustainability Framework 2030.
Our mission is clear: we create experience-led city centres,
ones that unlock value for generations to come.
Thanks to the hard work, decision-making and thinking that we
undertook in 2024, we began 2025 with a strong start – a new
leadership focus, a new business strategy, a new corporate
mission and identity all in place. Now all our attention is firmly
fixed on delivering growth and value.
Michael Smith
Chief Executive
Chinese mainland
As at 31 December 2024, the Group’s net investment in
the build-to-sell segment on the Chinese mainland was
US$5.8 billion, compared to US$6.6 billion at the end
of 2023.
The Group’s attributable interest in revenue recognised in 2024,
including its share of revenue in joint ventures and associates,
was US$2,204 million, compared to US$1,621 million in 2023,
primarily due to more completions and an active programme
to accelerate sales of existing inventory. The Group’s share
of total contracted sales in 2024 was US$1,343 million,
lower than the US$1,530 million achieved in the prior year.
At 31 December 2024, the Group’s attributable interest in
sold but not yet recognised contracted sales amounted to
US$1,112 million, compared to US$2,031 million at the end
of 2023.
Singapore
The Group’s premium residential developments in Singapore
continued to draw strong interest in the market. In November,
the Group launched sales for one project – Nava Grove –
in which 64% was pre-sold at the end of 2024. The Group’s
attributable interest in contracted sales was US$460 million
in 2024, compared to US$587 million in the prior year,
primarily due to limited inventory available for sale. The
Group’s attributable interest in revenue recognised in 2024
was US$351 million, compared to US$443 million in the prior
year. At 31 December 2024, the Group’s attributable interest
in sold but not yet recognised contracted sales amounted
to US$829 million, compared to US$736 million at the end
of 2023.
2025 Outlook
Macro-economic challenges and geopolitical uncertainties
are likely to persist in 2025, resulting in challenging
market conditions.
Results in 2024 were impacted by inventory provisions
from the Chinese mainland build-to-sell business. For 2025,
contributions from the Central Portfolio will be impacted by
negative office rental reversions and the ongoing Tomorrow’s
CENTRAL transformation which will see up to 40% of
LANDMARK’s leasable floor area under renovation. Lower
margins and substantially lower contributions from the
build-to-sell segment are also expected, as the Group
continues to wind-down residential inventory amidst
uncertain market conditions. Overall, we expect 2025
underlying profits to partially recover from the prior year,
although at levels well below that of 2023.
Annual Report 2024
11
How We will Create
Long-Term Value
Our strategy, which began in 2024 and will be
executed over the next few years, will see us
simplify our business to focus on Investment
Properties in Asia’s gateway cities.
The strategy sets us up for another century of
success, delivering enhanced shareholder value
in the years ahead. It creates lasting value for
our cities’ communities, through our place
innovation and enduring commitment to
exceptional experiences. Its core tenets:
New Strategic Investment
We continue to invest in ultra-premium integrated investment properties to create
enduring leading destinations
A Simplified Portfolio
With a focus on our core capabilities, there is no longer any new investments in
build-to-sell assets
Growing from Our Portfolio Anchors
Central, Hong Kong, Marina Bay, Singapore and West Bund, Shanghai are the
flagships which fuel our future growth
Hongkong Land
12
Hongkong Land
12
Hongkong Land
Portfolio
Portfolio of ultra-premium
integrated commercial
properties in Asia’s
gateway cities
Our 2035
Targets
Double Underlying Profit before
Interest and Tax
in a geographically diversified manner, with no single city accounting for more than 40%
Double Dividends per Share
from US¢22 per share to US¢44 per share
Grow Assets under Management
to US$100 billion
with meaningful participation from third-party capital
Actively Recycle Capital
of up to US$10 billion
The Role of
Our People
As part of the new strategy, we reinvigorated the way we work – with a renewed focus on
innovation and collaboration. Our teams are now organised by function and specialism,
allowing best practice to be shared across borders as we grow in Asia’s cities. From the start
of 2025, our senior management are incentivised by a new Long-Term Incentive Plan as we
execute our strategy.
Evolving Our
Business Model
Implementing our strategy
revolves around four areas
of focus
Capital Management
Focus on returns on capital, with excess
capital returned to shareholders
Ultra-
Premium
Gateway
Assets
Develop/acquire
premium commercial
properties in Asia’s
gateway cities,
utilising our own
development
capabilities
Portfolio
Recycling
Exit non-core
businesses and
sell-down mature
assets into HKL-
managed REITs
Third-party Capital
Leverage third-party capital to recycle assets and fund growth
Annual Report 2024
13
Financial Review
Results
Underlying Business Performance
2024
2023
US$m
US$m
Prime Properties Investment
930
984
Build-to-sell
126
273
Corporate costs
(91)
(94)
Underlying operating profit
965
1,163
Net financing charges
(270)
(269)
Tax
(282)
(157)
Non-controlling interests
(3)
(3)
Underlying profit attributable
to shareholders
410
734
Non-trading items
(1,795)
(1,316)
Loss attributable to shareholders
(1,385)
(582)
US¢
US¢
Underlying earnings per share
18.56
33.15
Underlying business performance is summarised in the
above table, including the Group’s operating profit from its
associates and joint ventures. Given the significance of the
contribution from the Group’s joint ventures, this provides a
clearer summary of the Group’s performance during the year.
The Group’s operating profit from the Prime Properties
Investment segment was US$930 million, 5% lower than
the previous year, primarily due to lower contributions from
the Hong Kong Central office and retail portfolio, partially
offset by higher contributions from the office portfolio in
Singapore as well as the retail portfolio on the Chinese
mainland. The two largest operating profit contributors within
Prime Properties Investment are the Hong Kong Central
portfolio (77%) and Singapore (15%).
In Hong Kong, operating profit was US$713 million, 7% lower
than 2023. Office average net rent was down 5% compared
to 2023 due to negative rental reversions, at HK$101 psf
per month. On the retail front, lower contributions from
LANDMARK were mainly due to planned tenant movements
as the construction works progress as part of the Tomorrow’s
CENTRAL transformation. Average net retail rents were up 3%
year-on-year.
In Singapore, there was a 5% increase in operating profit
in 2024, primarily due to positive rent reversions driving an
increase in average net rent. The portfolio continued to benefit
from very low vacancy levels.
Overall contributions from the luxury retail portfolio on the
Chinese mainland & Macau was broadly in line with the prior
year. Contributions from WF CENTRAL in Beijing were higher
driven by tenant mix optimisations, while contributions
from ONE CENTRAL Macau were reduced due to planned
mall renovations.
Operating profits from the build-to-sell business decreased
by 54% from the previous year to US$126 million, mainly
due to a US$351 million pre-tax non-cash provision
recognised on certain assets on the Chinese mainland where
the realisable sales price had fallen below the development
cost (net of tax: US$314 million). Excluding provisions,
contributions from the build-to-sell segment were 29% higher
compared to 2023, primarily due to completions of large
projects in Chongqing, Shanghai and Hangzhou. Outside of
the Chinese mainland, total contributions from South Asia
reduced slightly compared to 2023.
As the Group will no longer deploy capital into new build-to-sell
opportunities as part of its strategic pivot, net investment
in the segment is expected to decline as capital is recycled.
As at 31 December 2024, the Group’s net investment in the
segment amounted to US$7.8 billion, 75% of which relates to
assets on the Chinese mainland.
Net financing charges of US$270 million were comparable
to the prior year as the decline in consolidated net debt was
offset by an increase in the drawdown of joint venture level
debt for build-to-sell projects in Singapore.
The Group’s tax charge increased to US$282 million, with
an effective tax rate of 41%, higher than the prior year due to
the impact of the non-cash provisions in the Chinese mainland
build-to-sell business (which are generally not tax-deductible)
and a larger share of profits coming from the Chinese
mainland where tax rates are higher than in Hong Kong.
Excluding the impact of provisions, the effective tax rate in
2024 was 31%. The effective tax rate in 2023 had benefited
from the release of a historical tax provision.
Hongkong Land
14
Non-Trading Items
In 2024, the Group had net non-cash, non-trading losses of
US$1,795 million compared to US$1,316 million of losses in
2023. These arose principally on revaluations of the Group’s
investment properties by independent valuers (including its
share of joint ventures) at 31 December each year.
The 2024 net revaluation loss is principally attributable to the
Hong Kong office portfolio, due to lower open market rents for
office buildings. This was partially offset by a valuation gain
for the Hong Kong retail portfolio driven by expected rental
uplifts resulting from the Tomorrow’s CENTRAL investment.
During the year, Hong Kong office floors occupied by the
Group for its own use were reclassified from investment
properties to fixed assets, with these spaces to be depreciated
over the remaining life of the building and US$383 million
reversal of cumulative gains on these reclassified properties.
Excluding the impact of reclassification to fixed assets, the
Central portfolio decreased in value by 5% in 2024, with
a 31 December 2024 valuation of US$22.8 billion. The
valuation of the remainder of the Investment Properties
portfolio was stable.
Cash Flows
The Group’s consolidated cash flows are summarised as follows:
2024
2023
US$m
US$m
Operating activities
Operating profit, excluding non-trading items
584
794
Net interest
(181)
(205)
Tax paid
(147)
(287)
Expenditure on build-to-sell projects
(297)
(466)
Sales proceeds from build-to-sell
509
990
Dividends received from joint ventures
97
135
Others
106
(259)
671
702
Investing activities
Major renovations capex
(78)
(85)
Repayments from associates and joint ventures
259
1,018
Investments in associates and joint ventures
(17)
(401)
Advances to associates and joint ventures
(111)
(378)
Disposal of subsidiaries and joint ventures
29
7
82
161
Financing activities
Dividends paid by the Company
(478)
(486)
Net repayment of borrowings
(366)
(448)
Shares repurchase
–
(83)
Repayments to associates and joint ventures
(27)
(57)
Advances from associates and joint ventures
96)
165
Others
(3)
(4)
(778)
(913)
Net decrease in cash and cash equivalents
(26)
(50)
Cash and cash equivalents at 1 January
1,112
1,172
Effect of exchange rate changes
(19)
(10)
Cash and cash equivalents at 31 December
1,067
1,112
Annual Report 2024
15
Financial Review
The Group’s build-to-sell business comprises a mixture
of subsidiary projects (recorded within operating activities)
and joint-venture projects (recorded within investing and
financing activities).
The net cash inflows from operating activities for the year
were US$671 million, compared with a net cash inflows
of US$702 million in the prior year. Operating profits were
US$210 million lower in 2024 principally due to lower profits
from wholly owned build-to-sell projects. Tax paid during the
year reduced significantly compared to the prior year, with
higher Chinese mainland project related taxes in 2023. Sales
proceeds from build-to-sell projects, net of expenditure,
reduced by US$312 million year-on-year due to a lower
volume of both sales and unsold inventory. Net inflows
in others relates primarily to net working capital changes.
Net cash inflows from investing activities were US$82 million
in 2024, compared to net cash inflows of US$161 million
in the prior year. Capital expenditure of US$78 million for
major renovations principally relates to the Group’s Central
portfolio in Hong Kong. Repayments in the Group’s joint
venture projects totalled US$259 million, compared to
US$1,018 million in the prior year, with 2023 benefiting from
the external refinancing and repayment of a shareholder loan
made to one of the Group’s Singapore office assets. There
was a reduced level of new investments to associates and
joint ventures during the year.
Under financing activities, the Company paid dividends of
US$478 million, being the 2023 final dividend of US¢16.00
per share and the 2024 interim dividend of US¢6.00 per share,
unchanged compared to the prior year. The Group also had
a net repayment of borrowings of US$366 million during
the year.
Cash and cash equivalents were US$45 million lower at the
end of 2024. Taken together with a decrease in borrowings,
the Group’s net debt at 31 December 2024 decreased to
US$5,088 million, from US$5,371 million at the beginning
of the year.
Year-end debt summary*
2024
2023
US$m
US$m
US$ notes*
2,092
2,493
HK$ notes
1,419
1,371
HK$ bank loans
612
685
S$ notes
218
225
CNY notes#
182
187
CNY bank loans#
301
–
RMB bank loans
987
1,271
THB bank loans
354
335
Gross debt
6,165
6,567
Cash
1,077
1,196
Net debt
5,088
5,371
* Before currency swaps of US$ debt to HK$
# Chinese Yuan (Offshore)
Hongkong Land
16
Capital Management
The Group actively reviews and manages its capital structure
to ensure optimal shareholder returns through a combination
of profitability, cash flows, investing activities, dividends and
balance sheet strength. In 2024, the Group announced a new
strategy with a refreshed capital allocation framework. Up to
US$10 billion of existing capital is to be recycled over the next
10-years, with up to 20% of these proceeds to be reinvested
in the buy-back and cancellation of its own shares. The Group
also aims to double dividends per share by 2035 and invest
in new ultra-premium integrated mixed-use properties in
Asia’s key gateway cities. The Group’s capital management
policies are set out on page 74.
Capital Commitments
Outstanding capital commitments as of 31 December 2024
was US$1,156 million (2023: US$814 million), including
the Group’s contributions to associates and joint venture
companies of US$716 million (2023: US$745 million).
The largest commitments relate to the Group’s 49%
share of a joint-venture mixed-use project in Bangkok and
renovations relating to the Group’s Tomorrow’s CENTRAL
project in Hong Kong.
Share Buy-back
Shares acquired in 2024 and 2023 were nil and US$83 million
respectively.
Dividends
The Board is recommending a final dividend of US¢17.00 per
share for 2024, providing a total annual dividend of US¢23.00
per share, up 5% from the prior year. The final dividend will
be payable on 14 May 2025, subject to approval at the Annual
General Meeting to be held on 2 May 2025, to shareholders
on the register of members at the close of business on
21 March 2025. No scrip alternative is being offered in
respect of the dividend.
Treasury Policy
The Group manages its treasury activities within established
risk management objectives and policies using a variety
of techniques and instruments. The main objectives are to
manage foreign exchange, interest rate and liquidity risks
and to provide a degree of certainty in respect of costs.
The investment of the Group’s cash balances is managed
so as to minimise risk while seeking to enhance yield.
Appropriate credit guidelines are in place to manage
counterparty credit risk.
When economically sensible to do so, borrowings are taken
in local currencies to hedge foreign currency exposures on
investments. A portion of borrowings is denominated in fixed
rates. Adequate committed facilities headroom is maintained
to facilitate the Group’s capacity to pursue new investment
opportunities and to provide some protection against market
uncertainties. Overall, the Group’s funding arrangements
are designed to strike an appropriate balance between equity
and debt from banks and capital markets, both short and long
term, to give flexibility to develop the business.
The Group’s Treasury operations are managed as cost centres
and are not permitted to undertake speculative transactions
unrelated to underlying financial exposures.
Annual Report 2024
17
Financial Review
Funding
The Group is well financed with strong liquidity. Net debt
at the end of the year decreased to US$5.1 billion from
US$5.4 billion in 2023. Net gearing was 17%, unchanged from
the end of 2023. Weighted average borrowing costs were
3.6%, compared to 3.9% in the prior year. Interest cover,
calculated as the underlying operating profits, including the
Group’s share of associates and joint ventures’ operating
profits, divided by net financing charges including the Group’s
share of associates and joint ventures’ net financing charges,
was 3.6 times, compared to 4.3 times in 2023.
Net debt as a percentage of equity
17%
13%
15%
17%
17%
2020
2021
2022
2023
2024
Net debt
Equity
Both Moody’s and Standard & Poor’s have maintained
their credit ratings of Hongkong Land Holdings Limited
at A3 and A respectively.
At 31 December 2024, the average tenor of the Group’s debt
was 6.3 years, unchanged from the end of 2023. On average,
approximately 68% of the Group’s borrowings were either
fixed rate borrowings or covered by interest rate hedges with
major credit worthy financial institutions and the remaining
32% were at floating rates. The majority of the Group’s debt
is denominated in Hong Kong dollars, of which 85% was at
fixed rate.
In December 2024, the Group completed a HK$12 billion
(US$1.5 billion) committed bank facilities refinancing with
an average tenor of 4.5 years.
Debt profile at 31 December 2024
* After currency swaps from US$ debt to HK$ debt
Interest
rate
Currency*
Maturity
52% >5 years
28% 2-5 years
7% 1-2 years
13% <1 year
68% Fixed
32% Floating
67% HK$
24% RMB & CNY
3% S$
6% THB
At 31 December 2024, the Group had total committed lines
of approximately US$8.1 billion with a diversified range of
maturity dates. Of these lines, 52% were sourced from banks
with the remaining 48% from the capital markets. At the end
of 2024, the Group had drawn US$6.2 billion of these lines
leaving US$1.9 billion of committed, but unused, facilities.
Adding the Group’s year end cash balances, the Group had
overall liquidity at 31 December 2024 of US$3.0 billion, down
from US$4.0 billion at the end of 2023. This liquidity provides
significant headroom to the Group.
Committed facility maturity
at 31 December 2024 (US$m)
2029
& beyond
2025
2026
2027
2028
4,222
961
1,055
981
911
Hongkong Land
18
Gross Assets
The Group’s gross assets, including its share of joint ventures,
(excluding cash balances) is analysed below, by activity and
by location.
Gross assets by activity
Gross assets by location
83% Prime Properties Investment
17% Build-to-sell
65% Hong Kong
22% Chinese mainland and Macau
13% Southeast Asia
Principal Risks and Uncertainties
A review of the principal risks and uncertainties facing the
Group is set out on pages 109 to 114.
Accounting Policies
The Directors continue to review the appropriateness of
accounting policies adopted by the Group, including the
latest developments in IFRS Accounting Standards. In 2024,
there are no amendments which are effective and relevant
to the Group that have a significant impact to the financial
statements upon adoption.
Craig Beattie
Chief Financial Officer
7 March 2025
Annual Report 2024
19
Sustainability
Overview
Since its founding in 1889, Hongkong Land’s business has
been built on the principles of excellence, integrity and
partnership. As the global calls for climate action and
improvement of environmental, social and governance (ESG)
performance become increasingly urgent, Hongkong Land
recognises that the real estate and construction sectors have
significant roles to play in a global transition to a low carbon
economy and is committed to continue engaging and
collaborating with our stakeholders to advance sustainability
agendas in the communities it serves.
The Group’s continued growth and progress on delivering
positive outcomes for our business and stakeholders is
underpinned by its Sustainability Framework 2030 which
highlight key focus areas that are linked to measurable
targets. Putting this framework into practice requires the
Group to strive for continuous improvement and further
integration of ESG considerations into our operations across
the region. The framework can be found on the Group’s
website at www.hkland.com/en/sustainability.
ESG Disclosure
The Group’s climate-related financial disclosure is consistent
with the requirements of the London Stock Exchange Listing
Rules and all 11 Task Force on Climate-related Financial
Disclosures (TCFD) recommendations and recommended
disclosures. The disclosures in its Sustainability Report –
Framework 2030 & Climate Action are made available
on the same date as its Annual Report 2024. The Group’s
environmental and social-related performance data for
the financial year ended 31 December 2024 is presented
in its Sustainability Performance Report 2024. The reports
are available at www.hkland.com/en/sustainability/
sustainability-reports.
To facilitate the holistic evaluation of its climate-related
activities, the Group publishes its TCFD disclosures separately
from its Annual Report but alongside other information
relevant to climate action including sustainability governance,
decarbonisation targets and pathway, as well as results of
climate risk assessments and mitigation measures.
Highlights in 2024
ESG Ratings
Over the past year, the Group was recognised by top ESG
ratings organisations, especially on in-depth assessments
which require active participation by companies.
The Group’s latest ESG ratings as at 31 December 2024 are
listed below.
• Global Real Estate Sustainability Benchmarks (GRESB) –
the Group is proud to be named Global Sector Leader
(Diversified Sector) for the Development benchmark – the
highest score globally. We are the Global Listed Sector
Leader (Diversified – Office/Retail) for the Standing
Investment Benchmark.
• Dow Jones Sustainability Indices (DJSI) – the Group is a
constituent of the Dow Jones Sustainability World Index
for the first time, ranking among the top 6% of global
performers in the sector. We are also a constituent of
the Dow Jones Sustainability Asia Pacific Index and was
included in the S&P Global Sustainability Yearbook for
the third consecutive year.
• Sustainalytics – the Group has been recognised as a
Regional ESG Top-rated Performer.
Decarbonisation
As part of Hongkong Land’s commitment to accelerate its
contributions on climate action, the Group announced in
February 2022 its pledge to setting Science-Based Targets
that are aligned with the 1.5°C pathway. We are leading
the net zero transition by setting ambitious emission
reduction targets. The targets, which were validated by the
Science-Based Target initiative in June 2022, has resulted in
the Group committing to a 46.2% reduction of Scope 1 and 2
greenhouse gas (GHG) emissions by 2030 from 2019 levels
and a 22% reduction in carbon intensity for Scope 3 emissions
over the same period.
Hongkong Land
20
To reduce Scope 1 and 2 GHG emissions, the Group continues
to reinvest in and upgrade its operating portfolios across the
region by prioritising fixed asset replacements, as well as the
deployment or enhancement of artificial intelligence solutions
to drive energy efficiency. We became the first developer to
attain Triple-Platinum certification, including BEAM Plus, LEED
and WELL, for its entire Hong Kong commercial portfolio
which is a testament to our ongoing efforts to upgrade and
retrofit across portfolios.
To address Scope 3 emissions from tenants, the Group
continues to engage with tenants via its Tenant Sustainability
Partnership Programme at its Central Portfolio to foster closer
collaboration, focusing in particular on providing support
to them in achieving green fit-outs and operations. In the
programme’s first year, tenants occupying 23% of the Central
Portfolio’s total office lettable area participated, partnering
with us to make their offices more sustainable, co-organising
events and taking part in social initiatives that benefitted
the community.
During the year, Hongkong Land continues to increase
granularity of its bespoke embodied carbon assessment tools
and further engagement along construction supply chains.
These tools adopt a supplier-based approach in estimating
emissions based on the types of building materials and
relevant amounts procured for a specific project. Key
enhancements include updating emission factor databases
and developing the Environmental Product Declarations
database across regions.
Green Buildings
Hongkong Land has a long history of reinvesting in existing
assets and undertaking a robust green building certification
programme. At the end of 2024, 96% of our leasing portfolio
by floor area, including those held in joint ventures, achieved
green building certification. All of our buildings in Hong Kong
and Singapore, comprising over half of our leasing portfolio,
retained the highest possible ratings of BEAM Plus
Platinum, Green Mark Platinum, and/or LEED Platinum
certifications respectively.
Tomorrow’s CENTRAL, as a large-scale transformation project
of LANDMARK, conducted a comprehensive pre-furbishment
audit to minimise construction waste. We set a waste
diversion rate of 75% by weight and identified opportunities
for reclaiming, reusing and recycling materials. We set targets
for sustainable procurement and the extensive use of low
carbon materials, for example adoption of 100% green
concrete, rebar and timber from sustainable sources.
Corporate Social Responsibility
The Hongkong Land HOME FUND, which was established to
focus on creating initiatives benefiting younger generations
and our aspiration to foster a more inclusive society,
celebrated its fourth anniversary in 2024. The fund has
now invested over HK$110 million in community projects,
with over 500,000 people across the region.
Key milestones achieved during the past year include
increasing the number of NGO partnerships by over
100 across the region and the continued growth of the
HERE2HELP volunteering team which contributed over
22,000 hours to serve more than 121,000 people.
During the year, the Group also received a number of
prestigious awards in recognition of its efforts in making
positive impact on the community. We are proud to
receive the Outstanding Corporate Award and Top 10
Volunteer Hours Award (100-999 employees) in Hong Kong
Volunteer Award.
Annual Report 2024
21
John Witt* Chairman
John Witt rejoined the Board in June 2020, having previously
served as the Chief Financial Officer between 2010 and 2016.
He has been Chairman since October 2024. He has been with
the Jardine Matheson group since 1993, holding a number of
senior positions. He became chief financial officer of Mandarin
Oriental in 2000. From 2016 to 2020, he was group finance
director of Jardine Matheson. He was also managing director
of Mandarin Oriental and chairman of Astra’s executive
committee until July 2024.
John is chairman of DFI Retail, Jardine Cycle & Carriage,
Jardine Matheson Limited and group managing director of
Jardine Matheson. He is also a commissioner of Astra.
John is a Chartered Accountant and has an MBA from INSEAD.
Michael Smith* Chief Executive
Michael Smith joined Hongkong Land as Chief Executive
in April 2024. Michael has extensive experience in
international real estate and finance with a proven track
record in investment and capital allocation. Prior to joining
Hongkong Land, Michael served as Regional CEO of Europe
and USA for Mapletree Investments. Under Michael’s
leadership, the Europe and USA business grew to over
a third of the group’s US$55 billion of assets under
management. Michael’s 30-year career includes senior
positions in the investment banking sector where he was
a partner at Goldman Sachs, leading the bank’s Southeast
Asia investment banking, as well as Asia Pacific (ex-Japan)
real estate business. As one of the pioneers of Asia’s REIT
industry, Michael played an instrumental role in numerous
REIT listings including the Link REIT in HK, all four Mapletree
REITs in Singapore and advised numerous other REITs and
real estate companies across Asia Pacific.
Craig Beattie* Chief Financial Officer
Craig Beattie joined the Board as Chief Financial Officer
in 2021. He has previously held a number of senior finance
positions in the Jardine Matheson group since joining
from EY in the UK in 2006, including the chief financial
officer of Mandarin Oriental from 2018 to 2021 and group
treasurer of Jardine Matheson from 2016 to 2018. He is
a Chartered Accountant.
Stuart Grant
Stuart Grant joined the Board in March 2023. He is a member
of the Audit Committee of the Company. He is the CEO
of ARC Group, a co-founder of CoreLife Investors and an
adviser to Brookfield’s Real Estate Group, and has more
than 25 years of real estate experience. Stuart started his
real estate investment career at Blackstone in London in 2000
and held a variety of senior executive positions, including
as a senior managing director and a member of the global
investment committee. He played a key role in building
Blackstone’s real estate business in the Asia Pacific region.
Stuart returned to the United Kingdom in 2018 as a managing
director of Stanhope Plc, one of London’s leading property
developers. Stuart holds a Master of Real Estate Finance and
Investment from the New York University and a Bachelor of
Science Degree from the University of St Andrews.
* Executive Director
Directors’ Profiles
Hongkong Land
22
Lily Jencks
Lily Jencks joined the Board in July 2022. She is an
architectural and landscape designer, with a master’s degree
from the University of Pennsylvania. She ran the design
company JencksSquared and architectural and landscape
practice Lily Jencks Studio. She is currently the founder and
director of the Jencks Foundation.
Adam Keswick
Adam Keswick joined the Board in 2012. Having joined
Jardine Matheson in 2001, he was appointed to the
Jardine Matheson board in 2007 and was deputy
managing director from 2012 to 2016, and became
chairman of Matheson & Co. in 2016. Adam is a director
of Mandarin Oriental. He is also a director of Ferrari NV
and Yabuli China Entrepreneurs Forum.
Lincoln K.K. Leong
Lincoln K.K. Leong joined the Board in March 2022.
He is the chairman of the Audit Committee of the Company.
Lincoln is an independent non-executive director of Standard
Chartered PLC, Standard Chartered Bank (Hong Kong) Limited
and China Resources Land Limited. He was previously
the chief executive officer of MTR Corporation Limited,
a non-executive director of Jardine Strategic Holdings
Limited and Mandarin Oriental International Limited,
and an independent non-executive director of Link Asset
Management Limited, as manager of Link Real Estate
Investment Trust, and SUNeVision Holdings Ltd. Lincoln
is a Chartered Accountant and has extensive experience in
the accountancy and investment banking industries.
Ming Mei
Ming Mei joined the Board in October 2024. He is the
co-founder and CEO of GLP, a leading global business builder,
owner, developer and operator of logistics real estate, data
centres, renewable energy and related technologies. Under
his leadership and vision, GLP revolutionised the modern
logistics industry by taking an innovative and entrepreneurial
approach to growth and value creation and has since
expanded into adjacent sectors and new markets. Ming also
co-founded Eastern Bell Venture Capital and is an investor and
board member of Value Retail China, a company specialising
in the development and operation of luxury outlet shopping
villages. Ming graduated from the Kellogg School of
Management at Northwestern University and the School
of Business and Management at the Hong Kong University
of Science and Technology with a Master of Business
Administration. He holds a Bachelor of Science in Finance
from Indiana University School of Business.
Annual Report 2024
23
Consolidated Profit and Loss Account
for the year ended 31 December 2024
2024
2023
Underlying
business
performance
Non-
trading
items
Total
Underlying
business
performance
Non-
trading
items
Total
Note
US$m
US$m
US$m
US$m
US$m
US$m
Revenue
3
2,002.1
–
2,002.1
1,844.3
–
1,844.3
Net operating costs
4
(1,417.9)
(8.3)
(1,426.2)
(1,050.0)
16.6
(1,033.4)
Change in fair value of investment properties
9
–
(1,887.6)
(1,887.6)
–
(1,323.5)
(1,323.5)
Operating (loss)/profit
584.2
(1,895.9)
(1,311.7)
794.3
(1,306.9)
(512.6)
Net financing charges
5
– financing charges
(245.0)
–
(245.0)
(265.9)
–
(265.9)
– financing income
78.8
–
78.8
81.5
–
81.5
(166.2)
–
(166.2)
(184.4)
–
(184.4)
Share of results of associates and joint ventures
6
– before change in fair value of
investment properties
115.0
–
115.0
234.7
–
234.7
– change in fair value of investment properties
9
–
139.2
139.2
–
18.0
18.0
115.0
139.2
254.2
234.7
18.0
252.7
(Loss)/profit before tax
533.0
(1,756.7)
(1,223.7)
844.6
(1,288.9)
(444.3)
Tax
7
(120.7)
(31.4)
(152.1)
(107.2)
(25.6)
(132.8)
(Loss)/profit after tax
412.3
(1,788.1)
(1,375.8)
737.4
(1,314.5)
(577.1)
Attributable to:
Shareholders of the Company
409.6
(1,794.5)
(1,384.9)
734.2
(1,316.5)
(582.3)
Non-controlling interests
2.7
6.4
9.1
3.2
2.0
5.2
412.3
(1,788.1)
(1,375.8)
737.4
(1,314.5)
(577.1)
US¢
US¢
US¢
US¢
(Loss)/earnings per share
8
– basic
18.56
(62.76)
33.15
(26.29)
– diluted
18.55
(62.76)
33.15
(26.29)
Hongkong Land
24
Consolidated Statement of
Comprehensive Income
for the year ended 31 December 2024
2024
2023
Note
US$m
US$m
Loss for the year
(1,375.8)
(577.1)
Other comprehensive income/(expense)
Items that will not be reclassified to profit or loss:
Remeasurements of defined benefit plans
0.3
0.7
Tax on items that will not be reclassified
7
–
(0.1)
0.3
0.6
Items that may be reclassified subsequently to profit or loss:
Net exchange translation differences
– net gain/(loss) arising during the year
75.2
(82.2)
– transfer to profit and loss
3.2
0.6
78.4
(81.6)
Cash flow hedges
– net gain/(loss) arising during the year
12.2
(53.1)
– transfer to profit and loss
(3.2)
(2.2)
9.0
(55.3)
Tax relating to items that may be reclassified
7
(1.5)
9.1
Share of other comprehensive expense of associates
and joint ventures
12
(246.3)
(59.1)
(160.4)
(186.9)
Other comprehensive expense for the year, net of tax
(160.1)
(186.3)
Total comprehensive expense for the year
(1,535.9)
(763.4)
Attributable to:
Shareholders of the Company
(1,542.4)
(767.4)
Non-controlling interests
6.5
4.0
(1,535.9)
(763.4)
Annual Report 2024
25
Consolidated Balance Sheet
at 31 December 2024
2024
2023
Note
US$m
US$m
Net operating assets
Fixed assets
10
203.2
99.7
Right-of-use assets
10
104.4
12.1
Investment properties
11
24,759.9
26,687.2
Associates and joint ventures
12
10,046.2
10,585.2
Non-current debtors
13
11.5
14.2
Deferred tax assets
14
53.5
113.3
Pension assets
0.9
1.0
Non-current assets
35,179.6
37,512.7
Properties for sale
15
2,359.7
2,926.1
Current debtors
13
349.0
374.1
Current tax assets
36.4
60.4
Bank balances
16
1,073.4
1,195.6
Assets classified as held for sale
17
54.3
–
Current assets
3,872.8
4,556.2
Current creditors
18
(1,642.4)
(2,155.1)
Current borrowings
19
(823.7)
(781.6)
Current tax liabilities
(110.4)
(189.8)
Current liabilities
(2,576.5)
(3,126.5)
Net current assets
1,296.3
1,429.7
Long-term borrowings
19
(5,341.6)
(5,785.3)
Deferred tax liabilities
14
(249.9)
(249.1)
Pension liabilities
–
(0.1)
Non-current creditors
18
(915.9)
(920.6)
29,968.5
31,987.3
Total equity
Share capital
20
220.7
220.7
Revenue and other reserves
29,719.4
31,744.7
Shareholders’ funds
29,940.1
31,965.4
Non-controlling interests
28.4
21.9
29,968.5
31,987.3
Approved by the Board of Directors
Michael Smith
Craig Beattie
Directors
7 March 2025
Hongkong Land
26
Consolidated Statement of Changes in Equity
for the year ended 31 December 2024
Share
capital
Capital
reserves
Revenue
reserves
Hedging
reserves
Exchange
reserves
Attributable to
shareholders
of the
Company
Attributable
to non-
controlling
interests
Total
equity
Note
US$m
US$m
US$m
US$m
US$m
US$m
US$m
US$m
2024
At 1 January
220.7
–
32,299.5
(57.7)
(497.1)
31,965.4
21.9
31,987.3
Total comprehensive expense
–
–
(1,384.6)
(0.1)
(157.7)
(1,542.4)
6.5
(1,535.9)
Dividends paid by
the Company
22
–
–
(485.5)
–
–
(485.5)
–
(485.5)
Share-based incentives
21
–
1.4
–
–
–
1.4
–
1.4
Unclaimed dividends forfeited
–
–
1.2
–
–
1.2
–
1.2
At 31 December
220.7
1.4
30,430.6
(57.8)
(654.8)
29,940.1
28.4
29,968.5
2023
At 1 January
222.7
–
33,449.8
(3.0)
(366.1)
33,303.4
23.7
33,327.1
Total comprehensive expense
–
–
(581.7)
(54.7)
(131.0)
(767.4)
4.0
(763.4)
Dividends paid by
the Company
22
–
–
(488.7)
–
–
(488.7)
–
(488.7)
Dividends paid to
non-controlling
shareholders
–
–
–
–
–
–
(0.6)
(0.6)
Unclaimed dividends forfeited
–
–
1.3
–
–
1.3
–
1.3
Repurchase of shares
(2.0)
–
(81.2)
–
–
(83.2)
–
(83.2)
Disposal of subsidiaries
–
–
–
–
–
–
(5.2)
(5.2)
At 31 December
220.7
–
32,299.5
(57.7)
(497.1)
31,965.4
21.9
31,987.3
Annual Report 2024
27
Consolidated Cash Flow Statement
for the year ended 31 December 2024
2024
2023
Note
US$m
US$m
Operating activities
Operating loss
(1,311.7)
(512.6)
Depreciation
4
12.7
16.5
Change in fair value of investment properties
11
1,887.6
1,323.5
Gain on acquisition of subsidiaries
4
–
(31.6)
Net gain on disposal of subsidiaries and joint ventures
4
(9.6)
(15.9)
Loss on disposal of an investment property
4
10.3
–
Exchange reserve loss realised on distribution
4
7.6
–
Loss on measurement of the disposal group
4
13.5
–
Decrease in properties for sale
752.1
187.5
Decrease in debtors
86.7
83.0
(Decrease)/increase in creditors
(547.9)
8.2
Interest received
65.3
46.4
Interest and other financing charges paid
(245.8)
(251.2)
Tax paid
(147.3)
(287.3)
Dividends from associates and joint ventures
97.1
135.1
Cash flows from operating activities
670.6
701.6
Investing activities
Major renovations expenditure
(78.5)
(85.3)
Repayments from associates and joint ventures
23 (a)
259.2
1,018.3
Investments in associates and joint ventures
23 (a)
(16.9)
(401.4)
Advances to associates and joint ventures
23 (a)
(111.5)
(377.8)
Disposal of subsidiaries
–
29.3
Disposal of joint ventures
–
8.5
Acquisition of subsidiaries
13.8
(30.9)
Disposal of an investment property
15.5
–
Cash flows from investing activities
81.6
160.7
Financing activities
Drawdown of borrowings
19
2,371.0
2,121.9
Repayment of borrowings
19
(2,737.3)
(2,569.5)
Repayments to associates and joint ventures
23 (a)
(26.6)
(56.5)
Advances from associates and joint ventures
23 (a)
95.5
165.0
Principal elements of lease payments
(2.7)
(3.4)
Repurchase of shares
–
(83.2)
Dividends paid by the Company
(478.2)
(486.2)
Dividends paid to non-controlling shareholders
–
(0.6)
Cash flows from financing activities
(778.3)
(912.5)
Net cash outflow
(26.1)
(50.2)
Cash and cash equivalents at 1 January
1,112.2
1,171.5
Effect of exchange rate changes
(18.9)
(9.1)
Cash and cash equivalents at 31 December
23 (b)
1,067.2
1,112.2
Hongkong Land
28
General Information
Hongkong Land Holdings Limited (the Company) is incorporated in Bermuda and has a primary listing in the equity share (transition) category
of the London Stock Exchange, with secondary listings in Bermuda and Singapore. The address of the registered office is given on pages 116
to 117. The principal activities of the Company and its subsidiaries, and the nature of the Group’s operation are set out on pages 60 to 63 and
Note 29 of the financial statements.
1
Basis of Preparation
The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS Accounting Standards),
including International Accounting Standards (IAS) and Interpretations as issued by the International Accounting Standards Board (IASB).
The financial statements have been prepared on a going concern basis and under the historical cost convention except as disclosed in
the accounting policies.
Details of the Group’s material accounting policies are included in Note 30.
There are no amendments which are effective in 2024 and relevant to the Group’s operations that have a significant impact on the Group’s
results, financial position and accounting policies.
The Group has not early adopted any standard, interpretation or amendment that has been issued but not yet effective (refer Note 31).
The principal operating subsidiaries, associates and joint ventures have different functional currencies in line with the economic
environments of the locations in which they operate. The functional currency of the Company is United States dollars. The consolidated
financial statements are presented in United States dollars.
The Group’s reportable segments are set out in Note 2 and are described on pages 30 to 32.
Notes to the Financial Statements
Annual Report 2024
29
Notes to the Financial Statements
2
Segmental Information
Operating segments are identified on the basis of internal reports about components of the Group that are regularly reviewed by the
executive directors of the Company for the purpose of resource allocation and performance assessment. The Group comprises two
operating segments which have been renamed as ‘Prime Properties Investment’ and ‘Build-to-sell’ (formerly Investment Properties and
Development Properties) to align with the new strategic direction. No operating segments have been aggregated to form the reportable
segments. Set out below is an analysis of the Group’s underlying profit and total equity by reportable segment.
Prime
Properties
Investment
Build-to-sell
Corporate
Total
US$m
US$m
US$m
US$m
2024
Revenue
1,026.0
976.1
–
2,002.1
Net operating costs
(247.7)
(1,078.7)
(91.5)
(1,417.9)
Share of operating profit of associates and joint ventures
152.1
228.4
–
380.5
Underlying operating profit
930.4
125.8
(91.5)
964.7
Net financing charges
– subsidiaries
(166.2)
– share of associates and joint ventures
(104.1)
(270.3)
Tax
– subsidiaries
(120.7)
– share of associates and joint ventures
(161.5)
(282.2)
Non-controlling interests
– subsidiaries
(2.7)
– share of associates and joint ventures
0.1
(2.6)
Underlying profit attributable to shareholders
409.6
Non-trading items
– change in fair value of investment properties, net of tax
(1,786.2)
– others
(8.3)
Loss attributable to shareholders
(1,384.9)
Hongkong Land
30
2
Segmental Information continued
Prime
Properties
Investment
Build-to-sell
Corporate
Total
US$m
US$m
US$m
US$m
2023
Revenue
1,082.5
761.8
–
1,844.3
Net operating costs
(248.8)
(707.5)
(93.7)
(1,050.0)
Share of operating profit of associates and joint ventures
150.4
218.2
–
368.6
Underlying operating profit
984.1
272.5
(93.7)
1,162.9
Net financing charges
– subsidiaries
(184.4)
– share of associates and joint ventures
(84.1)
(268.5)
Tax
– subsidiaries
(107.2)
– share of associates and joint ventures
(49.8)
(157.0)
Non-controlling interests
– subsidiaries
(3.2)
Underlying profit attributable to shareholders
734.2
Non-trading items
– change in fair value of investment properties, net of tax
(1,333.1)
– others
16.6
Loss attributable to shareholders
(582.3)
Revenue
Underlying
operating profit
Underlying profit
attributable to
shareholders
2024
2023
2024
2023
2024
2023
US$m
US$m
US$m
US$m
US$m
US$m
By geographical location
Hong Kong and Macau
898.8
960.1
739.9
788.1
739.9
788.1
Chinese mainland
1,032.1
806.6
73.4
206.8
67.4
201.1
Southeast Asia and others
71.2
77.6
242.9
261.7
243.1
260.8
Corporate, net financing charges and tax
–
–
(91.5)
(93.7)
(640.8)
(515.8)
2,002.1
1,844.3
964.7
1,162.9
409.6
734.2
Annual Report 2024
31
Notes to the Financial Statements
2
Segmental Information continued
Segment assets
Segment
liabilities
Unallocated
assets and
liabilities
Total
assets and
liabilities
Investment
Properties
Properties
for sale
Others
US$m
US$m
US$m
US$m
US$m
US$m
By business
2024
Prime Properties Investment
30,779.3
–
563.8
(670.4)
–
30,672.7
Build-to-sell
–
8,775.0
666.6
(2,058.0)
–
7,383.6
Unallocated assets and liabilities
–
–
–
–
(8,087.8)
(8,087.8)
30,779.3
8,775.0
1,230.4
(2,728.4)
(8,087.8)
29,968.5
2023
Prime Properties Investment
32,566.6
–
470.4
(707.1)
–
32,329.9
Build-to-sell
–
9,940.9
587.6
(2,877.4)
–
7,651.1
Unallocated assets and liabilities
–
–
–
–
(7,993.7)
(7,993.7)
32,566.6
9,940.9
1,058.0
(3,584.5)
(7,993.7)
31,987.3
By geographical location
2024
Hong Kong and Macau
23,591.5
221.9
280.5
(436.9)
–
23,657.0
Chinese mainland
2,536.7
6,630.7
513.9
(1,887.4)
–
7,793.9
Southeast Asia and others
4,651.1
1,922.4
436.0
(404.1)
–
6,605.4
Unallocated assets and liabilities
–
–
–
–
(8,087.8)
(8,087.8)
30,779.3
8,775.0
1,230.4
(2,728.4)
(8,087.8)
29,968.5
2023
Hong Kong and Macau
25,520.3
210.1
159.8
(463.6)
–
25,426.6
Chinese mainland
2,382.5
8,138.6
495.3
(2,721.4)
–
8,295.0
Southeast Asia and others
4,663.8
1,592.2
402.9
(399.5)
–
6,259.4
Unallocated assets and liabilities
–
–
–
–
(7,993.7)
(7,993.7)
32,566.6
9,940.9
1,058.0
(3,584.5)
(7,993.7)
31,987.3
Properties for sale include contract assets and cost to fulfil contracts. Unallocated assets and liabilities include tax assets and liabilities, bank
balances and borrowings.
Hongkong Land
32
3
Revenue
2024
2023
US$m
US$m
Rental income
887.6
934.7
Service income and others
– recognised at a point in time
35.3
33.7
– recognised over time
177.4
175.5
212.7
209.2
Sales of properties
– recognised at a point in time
881.0
671.7
– recognised over time
20.8
28.7
901.8
700.4
2,002.1
1,844.3
Total variable rents included in rental income amounted to US$36.2 million (2023: US$41.0 million).
The maturity analysis of lease payments, showing the undiscounted lease payments to be received over the remainder of the contractual
lease term after the balance sheet date including the estimated impact on lease payments from contractual rent reviews are as follows:
2024
2023
US$m
US$m
Within one year
715.2
768.0
Between one and two years
569.8
584.8
Between two and three years
429.8
440.3
Between three and four years
259.7
315.4
Between four and five years
186.4
176.5
Beyond five years
308.3
321.4
2,469.2
2,606.4
Generally the Group’s operating leases are for terms of three years or more.
Annual Report 2024
33
Notes to the Financial Statements
3
Revenue continued
Contract balances
Contract assets primarily relate to the Group’s rights to consideration for work completed but not billed, and are transferred to receivables
when the rights become unconditional which usually occurs when the customers are billed.
Costs to fulfil contracts includes costs recognised to fulfil future performance obligations on existing contracts that have not yet been
satisfied. Costs to obtain contracts include costs such as sale commissions and stamp duty paid, as a result of obtaining contracts.
The Group has capitalised these costs which are recognised in the profit and loss when the related revenue is recognised.
Contract liabilities primarily relate to the advance consideration received from customers relating to properties for sale.
Contract assets and contract liabilities relating to properties for sale are further analysed as follows:
2024
2023
US$m
US$m
Contract assets (see Note 13)
10.7
10.4
Contract liabilities (see Note 18)
(126.1)
(550.2)
At 31 December 2024, costs to fulfil contracts and costs to obtain contracts amounted to US$4.7 million (2023: US$4.4 million) and
US$1.9 million (2023: US$14.6 million), and US$16.4 million (2023: US$22.4 million) and US$13.1 million (2023: US$0.8 million) have
been recognised in profit and loss during the year respectively.
Revenue recognised in relation to contract liabilities
Revenue recognised in the current year relating to carried forward contract liabilities:
2024
2023
US$m
US$m
Properties for sale
540.0
384.0
Revenue expected to be recognised on unsatisfied contracts with customers
The timing of revenue to be recognised on unsatisfied performance obligations relating to properties for sale at 31 December 2024:
2024
2023
US$m
US$m
Within one year
218.7
701.4
Between one and two years
5.2
60.0
223.9
761.4
Hongkong Land
34
4
Net Operating Costs
2024
2023
US$m
US$m
Cost of sales
(1,265.4)
(913.6)
Other income
70.0
54.3
Administrative expenses
(209.0)
(221.6)
Gain on acquisition of subsidiaries
–
31.6
Net gain on disposal of subsidiaries and joint ventures
9.6
15.9
Loss on disposal of an investment property
(10.3)
–
Loss on measurement of the disposal group
(13.5)
–
Exchange reserve loss realised on distribution
(7.6)
–
(1,426.2)
(1,033.4)
The following charges are included in net operating costs:
Cost of properties for sale recognised as expense
(991.4)
(657.0)
Operating expenses arising from investment properties
(213.3)
(212.7)
Depreciation of fixed assets
(10.1)
(13.1)
Depreciation of right-of-use assets
(2.6)
(3.4)
Employee benefit expense
– salaries and benefits in kind
(216.9)
(221.2)
– defined contribution pension plans
(4.4)
(5.5)
– defined benefit pension plans
(1.3)
(1.2)
(222.6)
(227.9)
Auditors’ remuneration
– audit
(2.9)
(2.7)
– non-audit services
(0.4)
(0.5)
(3.3)
(3.2)
The number of employees at 31 December 2024 was 3,063 (2023: 2,991).
Cost of sales included a US$146.9 million provision for Chinese mainland properties for sale (2023: US$29.5 million) arising from the
deterioration in market conditions that resulted in projected sales prices being lower than development costs. A corresponding deferred tax
credit of US$10.8 million (2023: US$5.0 million) was recognised.
Annual Report 2024
35
Notes to the Financial Statements
5
Net Financing Charges
2024
2023
US$m
US$m
Interest expense
– bank loans and overdrafts
(93.6)
(109.9)
– other borrowings
(139.1)
(145.7)
Total interest expense
(232.7)
(255.6)
Interest capitalised
6.7
12.3
(226.0)
(243.3)
Commitment and other fees and exchange differences
(19.0)
(22.6)
Financing charges
(245.0)
(265.9)
Financing income
78.8
81.5
(166.2)
(184.4)
Financing charges and financing income are stated after taking into account hedging gains or losses.
6
Share of Results of Associates and Joint Ventures
2024
2023
US$m
US$m
By business
Prime Properties Investment
84.3
82.5
Build-to-sell
30.7
152.2
Underlying business performance
115.0
234.7
Non-trading items:
Change in fair value of investment properties
139.2
18.0
254.2
252.7
Results are shown after tax and non-controlling interests in the associates and joint ventures.
The Group’s share of revenue of associates and joint ventures was US$1,907.9 million (2023: US$1,747.7 million). The build-to-sell business
included a US$178.2 million net provision after including a deferred tax credit (2023: US$65.7 million). This arose due to the deterioration in
market conditions that resulted in projected sales prices being lower than development costs. In 2023, the net profit also included a net gain
of US$50.4 million arising from acquisitions.
Hongkong Land
36
7
Tax
Tax charged to profit and loss is analysed as follows:
2024
2023
US$m
US$m
Current tax
(93.4)
(155.1)
Deferred tax
– changes in fair value of investment properties
(25.8)
(15.2)
– other temporary differences
(32.9)
37.5
(58.7)
22.3
(152.1)
(132.8)
Reconciliation between tax expense and tax at applicable tax rate:
Tax at applicable tax rate
220.9
102.4
Change in fair value of investment properties not deductible
in determining taxable profit
(317.2)
(236.8)
Income not subject to tax
18.6
24.4
Expenses not deductible in determining taxable profit
(22.4)
(25.1)
Withholding tax
(9.2)
(0.8)
Land appreciation tax in Chinese mainland
(5.7)
3.1
Tax losses arising in the year not recognised
(11.7)
(3.8)
Over provision in prior years
10.1
3.6
Temporary differences not recognised
(19.6)
0.8
Deferred tax assets written off
(17.0)
(1.8)
Others
1.1
1.2
(152.1)
(132.8)
Tax relating to components of other comprehensive income is analysed as follows:
Remeasurements of defined benefit plans
–
(0.1)
Cash flow hedges
(1.5)
9.1
(1.5)
9.0
The applicable tax rate for the year of 14.9% (2023: 14.7%) represents the weighted average of the rates of taxation prevailing in the
territories in which the Group operates.
Share of tax charge of associates and joint ventures of US$168.4 million (2023: US$51.7 million) is included in share of results of associates
and joint ventures.
The Group is within the scope of the OECD Pillar Two model rules, and has applied the exception to recognising and disclosing information
about deferred tax assets and liabilities relating to Pillar Two income taxes from 1 January 2023.
Pillar Two legislation has been enacted or substantially enacted in certain jurisdictions in which the Group operates. The legislation has
become effective for the Group’s financial year ended 31 December 2024. The Group is in scope of the enacted or substantively enacted
legislation and has performed an assessment of the Group’s potential exposure to Pillar Two income taxes.
The assessment of the potential exposure to Pillar Two income taxes is based on the latest financial information for the year ended
31 December 2024 of the constituent entities in the Group. Based on the assessment, the effective tax rates in most of the jurisdictions
in which the Group operates are above 15%. However, there are a limited number of jurisdictions where the effective tax rate is slightly
below or close to 15%. The income tax expense related to Pillar Two income taxes in the relevant jurisdiction is assessed to be immaterial.
Annual Report 2024
37
Notes to the Financial Statements
8
Earnings per Share
Basic earnings per share are calculated on loss attributable to shareholders of US$1,384.9 million (2023: US$582.3 million) and on the
weighted average number of 2,206.6 million (2023: 2,215.1 million) shares in issue during the year.
The dilutive potential ordinary shares were not included in the calculation of diluted earnings per share as their inclusion would be
antidilutive. Accordingly, diluted earnings per share were the same as basic earnings per share (2023: same).
Additional basic and diluted earnings per share are calculated based on underlying profit attributable to shareholders. A reconciliation of
earnings is set out below:
2024
2023
Basic
earnings
per share
Diluted
earnings
per share
Basic
earnings
per share
Diluted
earnings
per share
US$m
US¢
US¢
US$m
US¢
US¢
Underlying profit attributable
to shareholders
409.6
18.56
18.55
734.2
33.15
33.15
Non-trading items (see Note 9)
(1,794.5)
(1,316.5)
Loss attributable to shareholders
(1,384.9)
(62.76)
(62.76)
(582.3)
(26.29)
(26.29)
9
Non-trading Items
An analysis of non-trading items after interest, tax and non-controlling interests is set out below:
2024
2023
US$m
US$m
Change in fair value of investment properties
(1,887.6)
(1,323.5)
Tax on change in fair value of investment properties
(31.4)
(25.6)
Gain on disposal of subsidiaries
–
16.6
Loss on disposal of an investment property
(10.3)
–
Gain on disposal of a joint venture
9.6
–
Exchange reserve loss realised on distribution
(7.6)
–
Share of results of associates and joint ventures
– change in fair value of investment properties
146.1
19.9
– tax on change in fair value of investment properties
(6.9)
(1.9)
139.2
18.0
Non-controlling interests
(6.4)
(2.0)
(1,794.5)
(1,316.5)
Hongkong Land
38
10 Fixed Assets and Right-of-use Assets
Fixed Assets
Right-of-use Assets
Leasehold
properties
Furniture,
equipment
and others
Total
Leasehold
properties
Furniture,
equipment
and others
Total
US$m
US$m
US$m
US$m
US$m
US$m
2024
Cost
95.0
69.7
164.7
6.5
12.6
19.1
Depreciation
(16.3)
(48.7)
(65.0)
(1.0)
(6.0)
(7.0)
Net book value at 1 January
78.7
21.0
99.7
5.5
6.6
12.1
Exchange differences
(1.8)
(0.3)
(2.1)
(0.2)
(0.3)
(0.5)
Additions
–
4.4
4.4
–
1.4
1.4
Disposals
–
(0.1)
(0.1)
–
(0.5)
(0.5)
Transfer from fixed assets to
right-of-use assets
(0.3)
–
(0.3)
0.3
–
0.3
Transfer from investment properties
(see Note 11)
111.7
–
111.7
94.2
–
94.2
Depreciation
(2.7)
(7.4)
(10.1)
(0.2)
(2.4)
(2.6)
Net book value at 31 December
185.6
17.6
203.2
99.6
4.8
104.4
Cost
361.7
73.1
434.8
108.7
12.9
121.6
Depreciation
(176.1)
(55.5)
(231.6)
(9.1)
(8.1)
(17.2)
185.6
17.6
203.2
99.6
4.8
104.4
2023
Cost
95.8
73.2
169.0
6.6
18.2
24.8
Depreciation
(13.9)
(43.3)
(57.2)
(0.7)
(11.1)
(11.8)
Net book value at 1 January
81.9
29.9
111.8
5.9
7.1
13.0
Exchange differences
(1.5)
(0.1)
(1.6)
(0.1)
(0.1)
(0.2)
Additions
1.0
2.2
3.2
–
5.8
5.8
Disposals
–
(0.6)
(0.6)
–
(3.1)
(3.1)
Depreciation
(2.7)
(10.4)
(13.1)
(0.3)
(3.1)
(3.4)
Net book value at 31 December
78.7
21.0
99.7
5.5
6.6
12.1
Cost
95.0
69.7
164.7
6.5
12.6
19.1
Depreciation
(16.3)
(48.7)
(65.0)
(1.0)
(6.0)
(7.0)
78.7
21.0
99.7
5.5
6.6
12.1
During the year, space occupied in the Group’s Hong Kong Central portfolio for own or alternative use (including corporate offices and
Landmark Mandarin Oriental Hotel) were reclassified to fixed assets and right-of-use assets (see Note 11) which comprised cost of
US$269.0 million and US$102.2 million and accumulated depreciation of US$157.3 million and US$8.0 million respectively.
Annual Report 2024
39
Notes to the Financial Statements
11 Investment Properties
Completed
commercial
properties
(Note a)
Under
development
commercial
properties
(Note a)
Completed
residential
properties
(Note b)
Total
US$m
US$m
US$m
US$m
2024
At 1 January
26,388.1
44.4
254.7
26,687.2
Exchange differences
110.9
–
2.3
113.2
Additions
76.9
–
0.2
77.1
Disposal
–
–
(12.7)
(12.7)
Transfer to fixed assets (see Note 10)
(111.7)
–
–
(111.7)
Transfer to right-of-use assets (see Note 10)
(94.2)
–
–
(94.2)
(Decrease)/increase in fair value
(1,891.3)
4.0
(0.3)
(1,887.6)
Classified as held for sale (see Note 17)
(11.4)
–
–
(11.4)
At 31 December
24,467.3
48.4
244.2
24,759.9
Freehold properties
114.8
Leasehold properties
24,645.1
24,759.9
2023
At 1 January
27,760.4
43.4
250.3
28,054.1
Exchange differences
(68.7)
–
(1.0)
(69.7)
Additions
49.6
–
–
49.6
Disposal of subsidiaries
(23.3)
–
–
(23.3)
(Decrease)/increase in fair value
(1,329.9)
1.0
5.4
(1,323.5)
At 31 December
26,388.1
44.4
254.7
26,687.2
Freehold properties
138.5
Leasehold properties
26,548.7
26,687.2
The own use portions of offices and hotel in Hong Kong were reclassified to fixed assets and right-of-use assets (see Note 10) and
recognised at historical cost less accumulated depreciation.
Decrease in fair value for 2024 includes a US$383.2 million reversal of cumulative gains on these reclassified properties.
The Group measures its investment properties at fair value. The fair values of the Group’s investment properties at 31 December 2024
and 2023 have been determined on the basis of valuations carried out by independent valuers who hold a recognised relevant professional
qualification and have recent experience in the locations and segments of the investment properties valued. The Group engaged Jones
Lang LaSalle to value its investment properties in Hong Kong, Chinese mainland, Singapore and Cambodia which are either freehold or
held under leases with unexpired lease terms of more than 25 years. The valuations, which conform to the International Valuation Standards
issued by the International Valuation Standards Council and the HKIS Valuation Standards issued by the Hong Kong Institute of Surveyors,
were arrived at by reference to the net income, allowing for reversionary potential, of each property. The Report of the Valuers is set out
on page 118. The valuations are comprehensively reviewed by the Group.
At 31 December 2024, investment properties of US$996.0 million (2023: US$951.8 million) were pledged as security for borrowings
(see Note 19).
Hongkong Land
40
11 Investment Properties continued
a)
Fair value measurements of commercial properties using significant unobservable inputs (level 3)
Fair values of completed commercial properties in Hong Kong, Chinese mainland and Singapore are generally derived using the income
capitalisation method. This valuation method is based on the capitalisation of the net income and reversionary income potential by
adopting appropriate capitalisation rates, which are derived from analysis of sale transactions and valuers’ interpretation of prevailing
investor requirements or expectations. The prevailing market rents adopted in the valuation have reference to valuers’ views of recent
lettings, within the subject properties and other comparable properties.
Fair values of completed commercial properties in Cambodia are generally derived using the discounted cash flow method. The net
present value of the income stream is estimated by applying an appropriate discount rate which reflects the risk profile.
Fair values of under development commercial properties are generally derived using the residual method. This valuation method
is essentially a means of valuing the land by reference to its development potential by deducting development costs together with
developer’s profit and risk from the estimated capital value of the proposed development assuming completion as at the date of
valuation.
The Group’s policy is to recognise transfers between fair value measurements as of the date of the event or change in circumstances
that caused the transfer. There were no transfer between level 1, 2 and 3 for recurring fair value measurements during the year.
Information about fair value measurements using significant unobservable inputs at 31 December:
Range of significant unobservable inputs
Location of properties
Fair value
Valuation method
Prevailing market
rent per month
Capitalisation/
discount rate
US$m
US$
%
2024
Hong Kong
– office
18,714.0
Income capitalisation
12.8 per square foot
2.90 to 3.50
– retail
4,109.5
Income capitalisation
28.8 per square foot
4.25 to 5.00
Total
22,823.5
Chinese mainland
996.0
Income capitalisation
105.1 per square metre
3.50
Singapore
581.4
Income capitalisation
7.5 per square foot
3.35 to 4.80
Cambodia
66.4
Discounted cash flow
21.0 to 30.0 per square metre
12.50 to 13.50
Total
24,467.3
2023
Hong Kong
– office
20,910.3
Income capitalisation
14.0 per square foot
2.90 to 3.50
– retail
3,847.0
Income capitalisation
22.3 per square foot
4.50 to 5.00
Total
24,757.3
Chinese mainland
951.8
Income capitalisation
104.4 per square metre
3.75
Singapore
596.8
Income capitalisation
7.7 per square foot
3.35 to 4.80
Vietnam and Cambodia
82.2
Discounted cash flow
21.0 to 30.0 per square metre
12.50 to 13.50
Total
26,388.1
Prevailing market rents are estimated based on independent valuers’ view of recent lettings, within the subject properties and other
comparable properties. The higher the rents, the higher the fair value.
Capitalisation and discount rates are estimated by independent valuers based on the risk profile of the properties being valued.
The lower the rates, the higher the fair value.
Annual Report 2024
41
Notes to the Financial Statements
11 Investment Properties continued
a)
Fair value measurements of commercial properties using significant unobservable inputs (level 3) continued
An increase/decrease to prevailing market rent will increase/decrease valuations, while an increase/decrease to capitalisation/discount
rate will decrease/increase valuations. Sensitivity analyses have been performed to assess the impact on the valuations of changes in
the two significant unobservable inputs for prevailing market rents and capitalisation rates on the completed commercial properties
in Hong Kong, which contributed 92% (2023: 93%) of the total investment properties balance at 31 December 2024. The impact of any
reasonably possible change in the assumptions for other investment properties would not be material. The Group believes this captures
the range of variations in these key valuation assumptions. The results are shown in the table below:
Increase/(decrease) in valuation
Change in
assumption
Increase in
assumption
Decrease in
assumption
%
US$m
US$m
2024
Prevailing market rent per month
5.0
1,034.7
(1,061.9)
Capitalisation rate
0.1
(661.2)
703.4
2023
Prevailing market rent per month
5.0
1,158.7
(1,149.7)
Capitalisation rate
0.1
(709.8)
755.4
b)
Fair value measurements of residential properties using no significant unobservable inputs (level 2)
Fair values of completed residential properties are generally derived using the direct comparison method. This valuation method is
based on comparing the property to be valued directly with other comparable properties, which have recently transacted. However,
given the heterogeneous nature of real estate properties, appropriate adjustments are usually required to allow for any qualitative
differences that may affect the price likely to be achieved by the property under consideration.
12 Associates and Joint Ventures
2024
2023
US$m
US$m
Unlisted associates
– share of attributable net assets
455.7
454.1
– amounts due from associates
398.3
407.1
854.0
861.2
Unlisted joint ventures
– share of attributable net assets
7,675.2
7,861.4
– amounts due from joint ventures
1,517.0
1,862.6
9,192.2
9,724.0
10,046.2
10,585.2
By business
Prime Properties Investment
4,677.7
4,610.0
Build-to-sell
5,368.5
5,975.2
10,046.2
10,585.2
To align with market practice, amounts due to associates and joint ventures of US$1,301.0 million for 2023 (2022: US$1,288.6 million), which
were previously reported net against Associates and Joint Ventures based on how these balances were intended to be settled, are now
reclassified and presented within Creditors (see Note 18). The previously reported balances of Current and Non-current creditors for 2023
increased by US$449.2 million (2022: US$501.7 million) and US$851.8 million (2022: US$786.9 million) respectively. The related cash flows in
2023, previously classified under investing activities as repayments from/advances to associates and joint ventures of US$165.0 million and
US$56.5 million respectively, are now represented under financing activities.
Amounts due from associates are interest free, unsecured and have no fixed terms of repayment.
Amounts due from joint ventures bear interests at rates up to 7% per annum and are repayable within one to six years.
Hongkong Land
42
12 Associates and Joint Ventures continued
Movements of associates and joint ventures during the year:
Associates
Joint ventures
2024
2023
2024
2023
US$m
US$m
US$m
US$m
At 1 January
861.2
754.2
9,724.0
10,150.4
Exchange differences
(0.2)
(0.2)
(32.1)
19.3
Share of results after tax and non-controlling interests
11.4
16.2
242.8
236.5
Share of other comprehensive expense after tax
and non-controlling interests
(31.3)
(6.7)
(215.0)
(52.4)
Dividends received and receivable
(1.0)
(1.1)
(99.6)
(129.1)
Investments in and advances to/(repayments from)
associates and joint ventures
13.9
98.8
(93.3)
(367.5)
Classified as held for sale
–
–
(39.6)
–
Disposal
–
–
(9.1)
(15.8)
Transfer to subsidiaries
–
–
(285.9)
(117.4)
At 31 December
854.0
861.2
9,192.2
9,724.0
The material joint ventures of the Group are listed below. These joint ventures have share capital consisting solely of ordinary shares, which
are held directly by the Group. The Group has no material associates.
Nature of investments in material joint ventures in 2024 and 2023:
Name of entity
Nature of business
Country of
incorporation/
principal place
of business
% of
ownership
interest
2024
2023
Shanghai Yibin Property Co. Ltd.
Property investment
Shanghai
43
43
Properties Sub F, Ltd
Property investment
Macau
49
49
BFC Development LLP
Property investment
Singapore
33
33
Central Boulevard Development Pte Ltd
Property investment
Singapore
33
33
One Raffles Quay Pte Ltd
Property investment
Singapore
33
33
Annual Report 2024
43
Notes to the Financial Statements
12 Associates and Joint Ventures continued
Summarised financial information for material joint ventures
Summarised balance sheet at 31 December:
Shanghai
Yibin
Property
Co. Ltd.
Properties
Sub F, Ltd
BFC
Development
LLP
Central
Boulevard
Development
Pte Ltd
One Raffles
Quay
Pte Ltd
US$m
US$m
US$m
US$m
US$m
2024
Non-current assets*
3,606.5
1,133.7
3,977.0
3,098.9
2,910.4
Current assets
Cash and cash equivalents
80.5
133.8
28.2
24.7
16.7
Other current assets
1,370.1
44.2
3.2
3.1
0.2
Total current assets
1,450.6
178.0
31.4
27.8
16.9
Non-current liabilities
Financial liabilities (excluding trade payables)
(614.1)
–
(1,263.0)
(1,189.6)
(783.8)
Other non-current liabilities (including trade payables)
(43.2)
(124.4)
–
(21.6)
(211.8)
Total non-current liabilities
(657.3)
(124.4)
(1,263.0)
(1,211.2)
(995.6)
Current liabilities
Financial liabilities (excluding trade payables)
–
–
(0.6)
(8.9)
(2.1)
Other current liabilities (including trade payables)
(206.7)
(43.3)
(79.5)
(46.3)
(50.3)
Total current liabilities
(206.7)
(43.3)
(80.1)
(55.2)
(52.4)
Net assets
4,193.1
1,144.0
2,665.3
1,860.3
1,879.3
2023
Non-current assets*
3,410.5
1,136.8
3,883.3
2,990.2
2,986.9
Current assets
Cash and cash equivalents
65.7
97.9
29.4
29.1
12.1
Other current assets
1,304.7
43.4
3.6
2.8
1.8
Total current assets
1,370.4
141.3
33.0
31.9
13.9
Non-current liabilities
Financial liabilities (excluding trade payables)
(325.4)
–
(1,302.3)
(1,223.0)
(801.9)
Other non-current liabilities (including trade payables)
(30.8)
(125.5)
–
(21.2)
(218.0)
Total non-current liabilities
(356.2)
(125.5)
(1,302.3)
(1,244.2)
(1,019.9)
Current liabilities
Financial liabilities (excluding trade payables)
–
–
(0.7)
(7.9)
(2.2)
Other current liabilities (including trade payables)
(147.9)
(40.9)
(77.3)
(46.0)
(48.5)
Total current liabilities
(147.9)
(40.9)
(78.0)
(53.9)
(50.7)
Net assets
4,276.8
1,111.7
2,536.0
1,724.0
1,930.2
* Predominantly consist of Investment Properties.
Hongkong Land
44
12 Associates and Joint Ventures continued
Summarised financial information for material joint ventures continued
Summarised statement of comprehensive income for the year ended 31 December:
Shanghai
Yibin
Property
Co. Ltd.
Properties
Sub F, Ltd
BFC
Development
LLP
Central
Boulevard
Development
Pte Ltd
One Raffles
Quay
Pte Ltd
US$m
US$m
US$m
US$m
US$m
2024
Revenue
0.1
82.7
182.6
134.5
134.1
Depreciation and amortisation
–
(3.2)
–
–
–
Interest income
0.7
3.0
–
–
–
Interest expense
–
(0.2)
(52.5)
(45.7)
(28.4)
Profit/(loss) from underlying business performance
(2.6)
44.2
87.1
55.4
73.2
Tax
0.6
(5.2)
(14.4)
(9.5)
(12.5)
Profit/(loss) after tax from underlying
business performance
(2.0)
39.0
72.7
45.9
60.7
Profit/(loss) after tax from non-trading items
38.3
(13.9)
205.4
203.8
13.2
Profit after tax
36.3
25.1
278.1
249.7
73.9
Other comprehensive income/(expense)
(120.0)
7.3
(73.6)
(67.8)
(64.5)
Total comprehensive income/(expense)
(83.7)
32.4
204.5
181.9
9.4
Group’s share of dividends received and receivable
from joint ventures
–
–
25.1
15.2
20.1
2023
Revenue
–
81.3
171.4
132.5
130.8
Depreciation and amortisation
–
(3.5)
–
–
–
Interest income
0.7
1.4
–
–
–
Interest expense
–
(0.2)
(53.8)
(43.8)
(28.6)
Profit/(loss) from underlying business performance
(3.0)
31.3
73.9
56.7
70.0
Tax
0.5
(3.7)
(11.7)
(9.6)
(11.9)
Profit/(loss) after tax from underlying
business performance
(2.5)
27.6
62.2
47.1
58.1
Profit/(loss) after tax from non-trading items
9.1
(7.3)
54.4
22.1
(0.2)
Profit after tax
6.6
20.3
116.6
69.2
57.9
Other comprehensive income/(expense)
(84.8)
(2.5)
38.2
25.7
29.6
Total comprehensive income/(expense)
(78.2)
17.8
154.8
94.9
87.5
Group’s share of dividends received and receivable
from joint ventures
–
–
20.7
15.8
19.4
The information contained in the summarised balance sheets and statements of comprehensive income reflect the amounts presented in the
financial statements of the joint ventures adjusted for differences in accounting policies between the Group and the joint ventures, and fair
value of the joint ventures at the time of acquisition.
Annual Report 2024
45
Notes to the Financial Statements
12 Associates and Joint Ventures continued
Reconciliation of summarised financial information
Reconciliation of the summarised financial information presented to the carrying amount of the Group’s interest in the material joint
ventures for the year ended 31 December:
Shanghai
Yibin
Property
Co. Ltd.
Properties
Sub F, Ltd
BFC
Development
LLP
Central
Boulevard
Development
Pte Ltd
One Raffles
Quay
Pte Ltd
US$m
US$m
US$m
US$m
US$m
2024
Net assets
4,193.1
1,144.0
2,665.3
1,860.3
1,879.3
Interest in joint ventures (%)
43
49
33
33
33
Group’s share of net assets in joint ventures
1,803.0
560.5
888.4
620.1
626.5
Amounts due from joint ventures
–
–
–
–
40.5
Carrying value
1,803.0
560.5
888.4
620.1
667.0
2023
Net assets
4,276.8
1,111.7
2,536.0
1,724.0
1,930.2
Interest in joint ventures (%)
43
49
33
33
33
Group’s share of net assets in joint ventures
1,839.0
544.7
845.3
574.7
643.4
Amounts due from joint ventures
–
–
–
–
38.9
Carrying value
1,839.0
544.7
845.3
574.7
682.3
The Group has interests in a number of individually immaterial joint ventures. The following table analyses, in aggregate, the share of profit
and other comprehensive income and carrying amount of these joint ventures.
2024
2023
US$m
US$m
Share of profit
14.5
142.8
Share of other comprehensive income
(98.5)
(45.8)
Share of total comprehensive (expense)/income
(84.0)
97.0
Carrying amount of interests in these joint ventures
4,653.2
5,238.0
At 31 December 2024, the Group’s commitments to provide funding to its joint ventures, if called, amounted to US$715.6 million
(2023: US$744.5 million).
There were no contingent liabilities relating to the Group’s interests in the joint ventures at 31 December 2024 and 2023.
Hongkong Land
46
13 Debtors
2024
2023
US$m
US$m
Trade debtors
28.3
31.2
Contract assets (see Note 3)
10.7
10.4
Other debtors
– third parties
258.7
266.1
– associates and joint ventures
62.8
80.6
360.5
388.3
Non-current
– other debtors
11.5
14.2
Current
– trade debtors
28.3
31.2
– contract assets
10.7
10.4
– other debtors
310.0
332.5
349.0
374.1
360.5
388.3
By geographical area of operation
Hong Kong and Macau
117.6
123.7
Chinese mainland
165.6
160.1
Southeast Asia and others
77.3
104.5
360.5
388.3
The fair value of trade debtors, contract assets and other debtors approximates to their carrying amounts, as the impact of discounting
is not significant. Derivative financial instruments are stated at fair value. The higher the discount rates, the lower the fair value.
Significant financial difficulties of a debtor, probability that a debtor will enter bankruptcy or financial reorganisation, and default or
delinquency in payment are considered indicators that the debt is impaired and an allowance for impairment is made based on the
estimated irrecoverable amount determined by reference to past default experience.
The Group applied the simplified approach to measure expected credit loss, that is a lifetime expected loss allowance for trade debtors and
contract assets. To measure the expected credit losses, trade receivables and contract assets have been grouped based on shared credit
risk characteristics and the days past due. Changes in certain macroeconomic information, such as GDP and inflation rate, are relevant
for determining expected credit loss rates. The contract assets relate to unbilled work in progress and have substantially the same risk
characteristics as the trade debtors for the same types of contracts. The Group has therefore concluded that the expected loss rates for
trade debtors are a reasonable approximation of the loss rates for the contract assets.
The expected loss rates are based on the historical payment profiles of sales and the corresponding historical credit losses. The historical
loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors and industry trends affecting the ability
of the customers to settle the receivables.
Annual Report 2024
47
Notes to the Financial Statements
13 Debtors continued
The loss allowance as at 31 December:
Below
30 days
Between 31
and 60 days
Between 61
and 120 days
More than
120 days
Total
US$m
US$m
US$m
US$m
US$m
2024
Expected loss rate (%)
–
–
4
3
1
Gross carrying amount – trade debtors
18.6
3.2
2.9
3.9
28.6
Gross carrying amount – contract assets
10.7
–
–
–
10.7
Loss allowance
(0.1)
–
(0.1)
(0.1)
(0.3)
2023
Expected loss rate (%)
–
–
5
3
1
Gross carrying amount – trade debtors
22.9
2.9
2.1
3.6
31.5
Gross carrying amount – contract assets
10.4
–
–
–
10.4
Loss allowance
(0.1)
–
(0.1)
(0.1)
(0.3)
Trade debtors, contract assets and other debtors are written off when there is no reasonable expectation of recovery. Indicators that there is
no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the Group.
Other debtors are further analysed as follows:
2024
2023
US$m
US$m
Costs to fulfil contracts (see Note 3)
4.7
4.4
Costs to obtain contracts (see Note 3)
1.9
14.6
Prepayments
107.1
109.8
Derivative financial instruments
0.2
4.0
Amounts due from associates and joint ventures
62.8
80.6
Others
144.8
133.3
321.5
346.7
Hongkong Land
48
14 Deferred Tax Assets and Liabilities
Tax losses
Accelerated
capital
allowances
Revaluation
surpluses of
investment
properties
Other
temporary
differences
Total
US$m
US$m
US$m
US$m
US$m
2024
At 1 January
54.6
(135.5)
(44.9)
(10.0)
(135.8)
Exchange differences
(1.4)
0.7
0.8
(0.5)
(0.4)
Credited/(charged) to profit and loss
15.7
(26.8)
(25.8)
(21.8)
(58.7)
Charged to other comprehensive income
–
–
–
(1.5)
(1.5)
At 31 December
68.9
(161.6)
(69.9)
(33.8)
(196.4)
Deferred tax assets
53.5
Deferred tax liabilities
(249.9)
(196.4)
2023
At 1 January
42.2
(81.3)
(30.2)
(89.6)
(158.9)
Exchange differences
(0.8)
0.2
0.5
0.9
0.8
Credited/(charged) to profit and loss
13.2
(58.3)
(15.2)
82.6
22.3
Credited to other comprehensive income
–
–
–
9.0
9.0
Acquisition of subsidiaries
–
–
–
(12.9)
(12.9)
Disposal of subsidiaries
–
3.9
–
–
3.9
At 31 December
54.6
(135.5)
(44.9)
(10.0)
(135.8)
Deferred tax assets
113.3
Deferred tax liabilities
(249.1)
(135.8)
Deferred tax balances predominantly comprise non-current items. Deferred tax assets and liabilities are netted when the taxes relate to the
same taxation authority and where offsetting is allowed.
Deferred tax assets of US$24.8 million (2023: US$15.8 million) arising from unused tax losses of US$112.4 million (2023: US$72.9 million)
have not been recognised in the financial statements. Included in the unused tax losses, US$23.2 million (2023: US$23.1 million) have no
expiry date and the balance will expire at various dates up to and including 2029.
Annual Report 2024
49
Notes to the Financial Statements
15 Properties for Sale
2024
2023
US$m
US$m
Properties under development
728.9
1,464.2
Completed properties
1,888.0
1,543.6
2,616.9
3,007.8
Provision
(257.2)
(81.7)
2,359.7
2,926.1
At 31 December 2024, properties under development which were not scheduled for completion within the next 12 months amounted to
US$513.5 million (2023: US$406.7 million). Properties for sale of US$871.6 million (2023: US$848.5 million) were pledged as security for
borrowings (see Note 19).
16 Bank Balances
2024
2023
US$m
US$m
Deposits with banks and financial institutions
1,014.6
1,051.2
Restricted cash
9.5
82.2
Bank balances
49.3
62.2
1,073.4
1,195.6
By currency
Chinese renminbi
454.6
497.6
Hong Kong dollar
58.0
78.8
Malaysian ringgit
22.8
22.0
Singapore dollar
69.7
209.7
United States dollar
463.7
385.5
Others
4.6
2.0
1,073.4
1,195.6
The weighted average interest rate on deposits with banks and financial institutions is 4.0% (2023: 4.8%) per annum.
Restricted cash represents property sale proceeds placed with banks in accordance with the requirements of property development on the
Chinese mainland and are restricted for use until certain conditions are fulfilled.
Hongkong Land
50
17 Assets Classified as Held for Sale
The major classes of assets classified as held for sale are set out below:
2024
2023
US$m
US$m
Investment properties
11.4
–
Joint ventures
26.1
–
Current assets*
16.8
–
Total assets
54.3
–
* Included bank balances of US$3.5 million (see Note 23(b)).
At 31 December 2024, assets classified as held for sale principally related to certain interests in Cambodia and Thailand with net assets of
US$14.9 million and US$39.4 million respectively.
18 Creditors
2024
2023
US$m
US$m
Trade creditors
566.3
661.0
Other creditors
183.8
217.6
Tenants’ deposits
257.5
258.7
Derivative financial instruments
65.8
62.0
Rent received in advance
19.3
17.1
Contract liabilities – properties for sale (see Note 3)
126.1
550.2
Lease liabilities
5.0
6.6
Amounts due to associates and joint ventures
1,334.5
1,302.5
2.558.3
3,075.7
Non-current
915.9
920.6
Current
1,642.4
2,155.1
2.558.3
3,075.7
By geographical area of operation
Hong Kong and Macau
583.2
603.5
Chinese mainland
1,930.7
2,422.0
Southeast Asia and others
44.4
50.2
2,558.3
3,075.7
Derivative financial instruments are stated at fair value. Other creditors are stated at amortised cost. The fair value of these creditors
approximates their carrying amounts. Amounts due to associates and joint ventures represent distributions of surplus cash in the form
of advances which are interest free, unsecured and repayable based on contractual terms (see Note 12).
Annual Report 2024
51
Notes to the Financial Statements
19 Borrowings
2024
2023
Carrying
amount
Fair value
Carrying
amount
Fair value
US$m
US$m
US$m
US$m
Current
Bank overdrafts
0.2
0.2
1.2
1.2
Bank loans
6.4
6.4
74.2
74.2
Current portion of long-term borrowings
– bank loans
177.2
177.2
306.5
306.5
– notes
639.9
636.0
399.7
400.9
823.7
819.8
781.6
782.8
Long-term
Bank loans
2,069.7
2,069.7
1,909.7
1,909.7
Notes
3,271.9
3,046.1
3,875.6
3,634.0
5,341.6
5,115.8
5,785.3
5,543.7
6,165.3
5,935.6
6,566.9
6,326.5
Secured
921.0
942.6
Unsecured
5,244.3
5,624.3
6,165.3
6,566.9
Hongkong Land
52
19 Borrowings continued
The fair values are based on market prices or are estimated using the expected future payments discounted at market interest rates ranging
from 2.6% to 5.2% (2023: 2.8% to 6.0%) per annum. This is in line with the definition of ‘observable current market transactions’ under the
fair value measurement hierarchy. The fair value of current borrowings approximates their carrying amounts, as the impact of discounting is
not significant.
Secured borrowings at 31 December 2024 and 2023 were certain subsidiaries’ bank borrowings which were secured against their investment
properties and properties for sale.
The movements in borrowings are as follow:
Bank
overdrafts
Long-term
borrowings
Short-term
borrowings
Total
US$m
US$m
US$m
US$m
2024
At 1 January
1.2
5,785.3
780.4
6,566.9
Exchange differences
–
(21.5)
(14.1)
(35.6)
Transfer
–
(974.4)
974.4
–
Change in fair value
–
1.1
0.2
1.3
Change in bank overdrafts
(1.0)
–
–
(1.0)
Drawdown of borrowings
–
2,355.8
15.2
2,371.0
Repayment of borrowings
–
(1,804.7)
(932.6)
(2,737.3)
At 31 December
0.2
5,341.6
823.5
6,165.3
2023
At 1 January
1.9
6,571.4
417.2
6,990.5
Exchange differences
–
(8.6)
2.1
(6.5)
Transfer
–
(585.7)
585.7
–
Subsidiaries acquired
–
–
25.9
25.9
Change in fair value
–
5.2
0.1
5.3
Change in bank overdrafts
(0.7)
–
–
(0.7)
Drawdown of borrowings
–
1,775.5
346.4
2,121.9
Repayment of borrowings
–
(1,972.5)
(597.0)
(2,569.5)
At 31 December
1.2
5,785.3
780.4
6,566.9
Annual Report 2024
53
Notes to the Financial Statements
19 Borrowings continued
The borrowings after currency swaps at 31 December are further summarised as follows:
Fixed rate borrowings
Weighted
average
interest rates
Weighted
average period
outstanding
Floating
rate
borrowings
Total
%
Years
US$m
US$m
US$m
By currency
2024
Hong Kong dollar
3.8
5.6
3,511.9
612.0
4,123.9
Singapore dollar
3.8
14.4
218.2
–
218.2
Chinese renminbi
3.1
2.1
483.2
986.5
1,469.7
Thai baht
3.3
–
–
353.5
353.5
4,213.3
1,952.0
6,165.3
2023
Hong Kong dollar
4.2
6.2
3,664.1
885.2
4,549.3
Singapore dollar
3.8
15.4
224.7
–
224.7
Chinese renminbi
3.5
3.0
186.8
1,271.2
1,458.0
Thai baht
3.6
–
–
334.9
334.9
4,075.6
2,491.3
6,566.9
The weighted average interest rates and period of fixed rate borrowings are stated after taking into account hedging transactions.
The exposure of the Group’s borrowings to interest rate changes and the contractual repricing dates at 31 December after taking into account
hedging transactions are as follows:
2024
2023
US$m
US$m
Floating rate borrowings
1,952.0
2,491.3
Fixed rate borrowings
– within one year
639.9
200.0
– between one and two years
220.6
641.3
– between two and three years
488.8
225.3
– between three and four years
183.7
185.9
– between four and five years
122.0
182.4
– beyond five years
2,558.3
2,640.7
4,213.3
4,075.6
6,165.3
6,566.9
Hongkong Land
54
19 Borrowings continued
Details of notes outstanding at 31 December are as follows:
2024
2023
Current
Non-current
Current
Non-current
Maturity
US$m
US$m
US$m
US$m
Medium term notes
US$400m 10-year notes at 4.625%*
2024
–
–
399.7
–
HK$300m 15-year notes at 4.10%
2025
38.6
–
–
38.4
US$600m 15-year notes at 4.50%*
2025
601.3
–
–
602.9
HK$302m 15-year notes at 3.75%
2026
–
38.8
–
38.5
CNY330m 3-year notes at 3.50% #
2026
–
45.1
–
46.4
CNY1,000m 3-year notes at 3.50% #
2026
–
136.6
–
140.4
HK$785m 15-year notes at 4.00%
2027
–
100.7
–
99.9
HK$473m 15-year notes at 4.04%
2027
–
60.9
–
60.5
HK$200m 15-year notes at 3.95%
2027
–
25.7
–
25.6
HK$300m 15-year notes at 3.15%
2028
–
38.5
–
38.1
HK$325m 15-year notes at 4.22%
2028
–
41.7
–
41.4
HK$450m 10-year notes at 3.83%
2028
–
57.9
–
57.5
HK$355m 10-year notes at 3.75%
2028
–
45.6
–
45.3
HK$400m 15-year notes at 4.40%
2029
–
51.2
–
50.8
HK$550m 10-year notes at 2.93%
2029
–
70.8
–
70.3
US$600m 10-year notes at 2.875%*
2030
–
596.8
–
596.2
HK$800m 20-year notes at 4.11%
2030
–
103.0
–
102.4
US$500m 10-year notes at 2.25%*
2031
–
496.7
–
496.2
HK$375m 10-year notes at 1.957%
2031
–
48.2
–
47.9
HK$200m 20-year notes at 4.125%
2031
–
25.6
–
25.4
HK$240m 20-year notes at 4.00%
2032
–
30.6
–
30.3
HK$863m 12-year notes at 2.83%
2032
–
110.4
–
109.6
US$400m 10-year notes at 5.25%*
2033
–
397.7
–
397.5
HK$700m 15-year notes at 4.12%
2033
–
89.6
–
89.0
HK$300m 10-year notes at 4.85%
2033
–
38.5
–
38.2
HK$604m 15-year notes at 3.67%
2034
–
77.5
–
77.0
HK$300m 10-year notes at 4.68%
2034
–
38.3
–
–
HK$400m 15-year notes at 2.72%
2035
–
51.1
–
50.8
HK$400m 15-year notes at 2.90%
2035
–
51.0
–
50.6
HK$400m 15-year notes at 2.90%
2035
–
51.0
–
50.6
HK$800m 15-year notes at 2.65%
2035
–
102.1
–
101.3
S$150m 20-year notes at 3.95%
2038
–
108.7
–
111.9
S$150m 20-year notes at 3.45%
2039
–
109.5
–
112.8
HK$250m 30-year notes at 5.25%
2040
–
32.1
–
31.9
639.9
3,271.9
399.7
3,875.6
* Listed on the Singapore Exchange.
# Chinese yuan (offshore)
Annual Report 2024
55
Notes to the Financial Statements
20 Share Capital
Ordinary shares in millions
2024
2023
2024
2023
US$m
US$m
Authorised
Shares of US$0.10 each
4,000.0
4,000.0
400.0
400.0
Issued and fully paid
At 1 January
2,206.6
2,227.0
220.7
222.7
Repurchased and cancelled
–
(20.4)
–
(2.0)
At 31 December
2,206.6
2,206.6
220.7
220.7
During the year ended 31 December 2023, the Company repurchased 20.4 million ordinary shares from the stock market at a cost of
US$83.2 million, which resulted in a charge of US$2.0 million to share capital and US$81.2 million to revenue reserve.
21 Share-based Incentives
Share-based compensation is sometimes awarded to new senior executives as an incentive to join the Group. These share awards typically
vest free of payment in equal installments over five years, subject to continued employment on the date each vesting period ends.
The fair value of the 1,784,500 shares awarded in 2024 was US$5.8 million based on the closing share price on the grant date. Share awards
of US$1.4 million were charged to the profit and loss during the year.
Movements of the outstanding conditional awards during the year:
Conditional awards in dollars
Conditional awards in millions
2024
2023
2024
2023
US$m
US$m
At 1 January
–
–
–
–
Granted
1.8
–
5.8
–
At 31 December
1.8
–
5.8
–
Outstanding conditional awards at 31 December:
Awards vesting date
2025
0.4
–
1.2
–
2026
0.4
–
1.2
–
2027
0.4
–
1.2
–
2028
0.3
–
1.1
–
2029
0.3
–
1.1
–
Total outstanding
1.8
–
5.8
–
Hongkong Land
56
22 Dividends
2024
2023
US$m
US$m
Final dividend in respect of 2023 of US¢16.00 (2022: US¢16.00) per share
353.1
355.9
Interim dividend in respect of 2024 of US¢6.00 (2023: US¢6.00) per share
132.4
132.8
485.5
488.7
A final dividend in respect of 2024 of US¢17.00 (2023: US¢16.00) per share amounting to a total of US$375.1 million (2023: US$353.1 million)
is proposed by the Board. The dividend proposed will not be accounted for until it has been approved at the 2025 Annual General Meeting.
The amount will be accounted for as an appropriation of revenue reserves in the year ending 31 December 2025.
23 Notes to Consolidated Cash Flow Statement
a)
Repayments from/to, investments in and advances from/to associates and joint ventures
Set out below is an analysis by reportable segment on a net basis:
2024
2023
US$m
US$m
By business
Prime Properties Investment
6.5
429.1
Build-to-sell
193.2
(81.5)
199.7
347.6
By geographical location
Chinese mainland
222.2
135.2
Southeast Asia and others
(22.5)
212.4
199.7
347.6
b)
Cash and cash equivalents
2024
2023
US$m
US$m
Bank balances excluding restricted cash (see Note 16)
1,063.9
1,113.4
Bank overdrafts (see Note 19)
(0.2)
(1.2)
Bank balances classified as held for sale (see Note 17)
3.5
–
1,067.2
1,112.2
Annual Report 2024
57
Notes to the Financial Statements
24 Derivative Financial Instruments
The fair values of derivative financial instruments at 31 December are as follows:
2024
2023
Positive
fair value
Negative
fair value
Positive
fair value
Negative
fair value
US$m
US$m
US$m
US$m
Designated as cash flow hedges
– cross currency swaps
0.2
65.8
2.7
62.0
Designated as fair value hedges
– cross currency swaps
–
–
1.3
–
Cross currency swaps
The contract amounts of the outstanding cross currency swap contracts at 31 December 2024 were US$2,100.0 million
(2023: US$2,500.0 million).
25 Capital Commitments
2024
2023
US$m
US$m
Authorised not contracted
214.9
2.7
Contracted not provided
– contributions to joint ventures
715.6
744.5
– others
225.4
66.6
941.0
811.1
1,155.9
813.8
26 Contingent Liabilities
Various Group companies are involved in litigation arising in the ordinary course of their respective businesses. Having reviewed the
outstanding claims and taking into account the legal advice received, the Directors are of the opinion that adequate provisions have been
made in the financial statements.
27 Related Party Transactions
The parent company of the Group is Jardine Strategic Limited (JSL) and the ultimate parent company of the Group is Jardine Matheson
Holdings Limited (JMH). Both JMH and JSL are incorporated in Bermuda.
In the normal course of business, the Group has entered into a variety of transactions with the subsidiaries, associates and joint ventures
of JMH (Jardine Matheson group members). The more significant of these transactions are described below:
Management fee
The management fee payable by the Group, under an agreement entered into in 1995, to Jardine Matheson Limited (JML) in 2024 was
US$2.1 million (2023: US$3.7 million), being 0.5% per annum of the Group’s underlying profit in consideration for management consultancy
services provided by JML, a wholly-owned subsidiary of JMH.
Hongkong Land
58
27 Related Party Transactions continued
Property and other services
The Group rented properties to Jardine Matheson group members. Gross rentals on such properties in 2024 amounted to US$19.0 million
(2023: US$19.8 million).
The Group provided project management services and property management services to Jardine Matheson group members in 2024
amounting to US$3.8 million (2023: US$3.9 million).
Jardine Matheson group members provided property maintenance and other services to the Group in 2024 in aggregate amounting
to US$59.0 million (2023: US$58.8 million).
Hotel management services
Jardine Matheson group members provided hotel management services to the Group in 2024 amounting to US$3.1 million
(2023: US$3.6 million).
Outstanding balances with associates and joint ventures
Amounts of outstanding balances with associates and joint ventures are included in associates and joint ventures, debtors and creditors
as appropriate (see Notes 12, 13 and 18).
Directors’ emoluments
Details of Directors’ emoluments (being the key management personnel compensation) are shown on page 102 under the heading of
‘Remuneration Outcomes in 2024’.
28 Summarised Balance Sheet of the Company
Included below is certain summarised balance sheet information of the Company disclosed in accordance with Bermuda law.
2024
2023
US$m
US$m
Net operating assets
Investments at cost
Unlisted shares in subsidiaries
4,481.7
4,481.7
Amounts due from subsidiaries
2,626.6
2,615.6
7,108.3
7,097.3
Creditors and other accruals
(34.5)
(32.5)
7,073.8
7,064.8
Total equity
Share capital (see Note 20)
220.7
220.7
Revenue and other reserves
Contributed surplus
1,892.1
1,892.1
Capital reserves
1.4
–
Revenue reserves
4,959.6
4,952.0
6,853.1
6,844.1
Shareholders’ funds
7,073.8
7,064.8
Subsidiaries are shown at cost less amounts provided.
The contributed surplus was set up on the formation of the Company in 1989 and, under the Bye-Laws of the Company, is distributable.
Annual Report 2024
59
Notes to the Financial Statements
29 Principal Subsidiaries, Associates and Joint Ventures
The principal subsidiaries, associates and joint ventures of the Group at 31 December 2024 are set out below.
Attributable
interest
Place of
incorporation
2024
2023
Issued share capital
Main activities
%
%
Subsidiaries
Hongkong Land China
Holdings Limited*
100
100
USD
200,000,000
Investment holding
Bermuda
Hongkong Land International
Holdings Ltd*
100
100
USD
200,000,000
Investment holding
Bermuda
Hongkong Land Limited*
100
100
USD
12,000
Group management
Bermuda
Blossom Noble (HK) Limited
100
100
HKD
156,000,001
Property investment
Hong Kong
Grateful Point (HK) Limited
100
100
HKD
171,000,001
Property investment
Hong Kong
The Hongkong Land Company, Limited
100
100
HKD
2,147,317,117
Investment holding
Hong Kong
The Hongkong Land Property
Company, Limited
100
100
HKD
200
Property investment
Hong Kong
HKL (Alexandra House) Limited
100
100
HKD
12,348,000,001
Property investment
Hong Kong
HKL (Chater House) Limited
100
100
HKD
1,500,000
Property investment
Hong Kong
HKL (Jardine House) Limited
100
100
HKD
17,602,000,001
Property investment
Hong Kong
HKL (Landmark Hotel) Limited
100
100
HKD
2
Hotel investment
Hong Kong
HKL (One EXSQ) Limited
100
100
HKD
19,022,000,001
Property investment
Hong Kong
HKL (Podium) Limited
100
100
HKD
826,000,001
Property investment
Hong Kong
HKL (Prince’s Building) Limited
100
100
HKD
200
Property investment
Hong Kong
HKL (The Forum) Limited
100
100
HKD
1,997,592,818
Property investment
Hong Kong
HKL (Three EXSQ) Limited
100
100
HKD
12,750,250,316
Property investment
Hong Kong
HKL (Two EXSQ) Limited
100
100
HKD
16,639,000,001
Property investment
Hong Kong
Hongkong Land (HK)
Investments Limited
100
100
HKD
4,033,804,249
Investment holding
Hong Kong
Hongkong Land (West Bund)
Development Limited
100
100
HKD
11,216,548,649
Investment holding
Hong Kong
Violet Castle (HK) Limited
100
100
HKD
55,200,001
Property investment
Hong Kong
Chengdu Premium Property
Development Company Limited
100
100
USD
699,980,000
Property development
Chinese mainland
Hongkong Land (Chengdu) Ruilong
Development Co. Ltd.
100
100
RMB
500,000,000
Property development
Chinese mainland
Hongkong Land (Chengdu) Xinchang
Development Co. Ltd.
100
100
RMB
650,000,000
Property development
Chinese mainland
Hongkong Land (Chongqing)
Development Co Ltd
100
100
RMB
5,669,110,000
Property development
Chinese mainland
Hongkong Land (Chongqing) Hemin
Property Development Co Ltd
100
–
RMB
1,550,000,000
Property development
Chinese mainland
Hongkong Land (Chongqing)
Investment and Holding Co Ltd
100
100
USD
2,200,000,000
Investment holding
Chinese mainland
Hongkong Land (Chongqing)
Xinchen Development Co Ltd
100
100
RMB
900,000,000
Property development
Chinese mainland
Hongkong Land (Chongqing North)
Development Co Ltd
100
100
HKD
3,980,000,000
Property development
Chinese mainland
* Owned directly
Hongkong Land
60
Attributable
interest
Place of
incorporation
2024
2023
Issued share capital
Main activities
%
%
Subsidiaries continued
Hongkong Land (Chongqing North)
Management Co. Ltd.
100
100
RMB
207,322,000
Property management
Chinese mainland
Hongkong Land (Chongqing) Xingmao
Development Co. Ltd.
100
100
RMB
1,610,000,000
Property development
Chinese mainland
Hongkong Land (Chongqing) Xingyi
Development Co Ltd
100
100
RMB
449,450,000
Property development
Chinese mainland
Hongkong Land (Hangzhou) Heyue
Investment and Development Co Ltd
100
100
RMB
6,000,000
Property development
Chinese mainland
Hongkong Land (Nanjing) Xuanzhi
Development Co. Ltd.
100
100
RMB
479,222,000
Property development
Chinese mainland
Hongkong Land (Shanghai) Asset
Management Co. Ltd.
100
100
RMB
50,000,000
Investment holding
Chinese mainland
Hongkong Land (Shanghai) Zhibin
Management Co. Ltd.
100
100
RMB
10,000,000
Investment holding
Chinese mainland
Hongkong Land (Wuhan) Xinghui
Development Co. Ltd.
100
100
RMB
1,500,000,000
Property development
Chinese mainland
Wangfu Central Real Estate
Development Company Limited
84
84
RMB
3,500,000,000
Property investment
Chinese mainland
Wuhan Dream Land Investment and
Development Co. Ltd.
100
100
RMB
1,200,000,000
Property development
Chinese mainland
HKL (Esplanade) Pte Limited
100
100
SGD
150,000,000
Property investment
Singapore
HKL Treasury (Singapore) Pte. Ltd.
100
100
SGD
2
Finance
Singapore
SGD
66,555,263#
Hongkong Land (Singapore) Pte. Ltd.
100
100
SGD
100,000
Project management
Singapore
SGD
505,164,131#
The Hongkong Land Treasury
Services (Singapore) Pte. Ltd.
100
100
SGD
2
Finance
Singapore
MCL Land Limited
100
100
SGD
511,736,041
Investment holding
Singapore
Hongkong Land (Premium
Developments) Limited
100
100
Riels
61,400,000,000
Property investment
Cambodia
MCL Land (Century Gardens) Sdn. Bhd.
100
100
MYR
29,117,145
Investment holding
Malaysia
MCL Land (Malaysia) Sdn. Bhd.
100
100
MYR
1,000,000
Property development
Malaysia
MYR
3,010,000#
MCL Land (Pantai View) Sdn. Bhd.
100
100
MYR
2,000,000
Property investment
Malaysia
MCL Land (Quinn) Sdn. Bhd.
100
100
MYR
2,764,210
Property development
Malaysia
HKL (Thai Developments) Limited
100
100
Baht
2,592,000,000
Investment holding
Thailand
HKL (Treasury Services) Limited
100
100
USD
1
Finance
British Virgin
Islands
The Hongkong Land Notes
Company Limited
100
100
USD
2
Intra-group financing
British Virgin
Islands
The Hongkong Land Finance
(Cayman Islands) Company Limited
100
100
USD
2
Intra-group financing
Cayman Islands
# Preference shares
29 Principal Subsidiaries, Associates and Joint Ventures continued
Annual Report 2024
61
Notes to the Financial Statements
Attributable
interest
Place of
incorporation
2024
2023
Issued share capital
Main activities
%
%
Associates and joint ventures
Normelle Estates Limited
50
50
HKD
10,000
Property investment
Hong Kong
Properties Sub F, Limited
49
49
MOP
1,000,000
Property investment
Macau
Beijing Landmark Trinity Real Estate
Development Co Ltd
30
30
RMB
2,800,000,000
Property development
Chinese mainland
Beijing Shouyi Kexin Property Co. Ltd.
20
20
RMB
5,500,000,000
Property development
Chinese mainland
Chengdu Ruipeng Property Co. Ltd.
50
50
RMB
980,000,000
Property development
Chinese mainland
Chongqing Central Park Co Ltd
50
50
HKD
4,640,000,000
Property development
Chinese mainland
Chongqing Lijia Development Co Ltd
50
50
RMB
533,596,100
Property development
Chinese mainland
Chongqing Runyi Fenghe Property
Development Co. Ltd.
40
40
RMB
2,120,000,000
Property development
Chinese mainland
Chongqing Yirun Huacheng
Development Co. Ltd.
50
50
RMB
1,070,000,000
Property development
Chinese mainland
China West Premier Housing
Development Co Ltd
50
50
USD
569,960,000
Property development
Chinese mainland
Hangzhou Kesheng Property
Development Co Ltd
30
30
RMB
100,000,000
Property development
Chinese mainland
Hangzhou Keyi Property
Development Co Ltd
30
30
RMB
150,000,000
Property development
Chinese mainland
Hongkong Land (Chengdu) Xingyi
Development Co. Ltd.
33
33
RMB
50,000,000
Property development
Chinese mainland
Hongkong Land (Wuhan) Xingyao
Development Co. Ltd.
50
50
RMB
430,000,000
Property development
Chinese mainland
Hongkong Land Longfor (Chongqing)
Hongmao Development Co Ltd
50
50
RMB
100,000,000
Property development
Chinese mainland
Longfor Hongkong Land (Chongqing)
Development Co Ltd
50
50
RMB
10,000,000
Property development
Chinese mainland
Longfor Hongkong Land (Chongqing)
Real Estate Management Co Ltd
50
50
RMB
155,000,000
Property management
Chinese mainland
Nanjing Shengxiangyuan Property
Development Co Ltd
48
48
RMB
4,227,500,000
Property development
Chinese mainland
Nanjing Xinyeezhi Property
Development Co Ltd
50
50
USD
750,000,000
Property development
Chinese mainland
Nanjing Yeezhi Jiangbei Property
Development Co Ltd
50
50
RMB
100,000,000
Property development
Chinese mainland
Shanghai Puchen Property Co. Ltd.
43
43
RMB
850,000,000
Property development
Chinese mainland
Shanghai Xinqiaogao
Development Co Ltd
27
27
RMB
4,000,000,000
Property development
Chinese mainland
Shanghai Xujing Property Co Ltd
50
50
RMB
4,200,000,000
Property development
Chinese mainland
Shanghai Yibin Property Co. Ltd.
43
43
RMB
30,200,000,000
Property investment
Chinese mainland
Shanghai Yihui Development Co Ltd
50
50
RMB
305,000,000
Property development
Chinese mainland
Shanghai Zhibin Huizhao
Property Co. Ltd.
34
34
RMB
1,600,000,000
Property development
Chinese mainland
29 Principal Subsidiaries, Associates and Joint Ventures continued
Hongkong Land
62
Attributable
interest
Place of
incorporation
2024
2023
Issued share capital
Main activities
%
%
Associates and joint ventures continued
Suzhou Rongzhi Property
Development Co. Ltd.
40
40
RMB
400,000,000
Property investment
Chinese mainland
Suzhou Yuanzhi Property
Development Co. Ltd.
53
53
RMB
1,200,000,000
Property investment
Chinese mainland
Wuhan Yeezhi Minghong
Development Co. Ltd.
66
66
RMB
600,000,000
Property development
Chinese mainland
Yeezhi Yuexiang (Chongqing)
Development Co Ltd
50
50
RMB
17,736,869
Property development
Chinese mainland
Asia Radiant Pte. Ltd.
50
50
SGD
4,000,000
Property development
Singapore
BFC Development LLP
33
33
SGD
N/A
Property investment
Singapore
Central Boulevard Development Pte Ltd
33
33
SGD
6
Property investment
Singapore
HC Land (Clementi) Pte. Ltd.
51
51
SGD
4,000,000
Property development
Singapore
Golden Ray Edge 3 Pte. Ltd.
50
50
SGD
4,000,000
Property development
Singapore
Maximus Commercial SG Pte. Ltd.
50
50
SGD
4,000,000
Property development
Singapore
Maximus Residential SG Pte. Ltd.
50
50
SGD
4,000,000
Property development
Singapore
One Raffles Quay Pte Ltd
33
33
SGD
6
Property investment
Singapore
Taurus Properties SG Pte. Ltd.
50
50
SGD
4,000,000
Property development
Singapore
Tembusu Residential Pte. Ltd.
49
49
SGD
4,000,100
Property development
Singapore
PT Asya Mandira Land
50
50
IDR
3,870,000,000,000
Property development
Indonesia
PT Award Global Infinity
50
50
IDR
400,982,000,000
Property development
Indonesia
PT Brahmayasa Bahtera
40
40
IDR
166,000,000,000
Property development
Indonesia
PT Bhumi Prama Arjasa
49
49
IDR
471,862,750,000
Hotelier
Indonesia
PT Bumi Parama Wisesa
49
49
IDR
1,150,000,000,000
Property development
Indonesia
PT Saka Surya Wisesa
25
–
IDR
880,000,000,000
Property development
Indonesia
PT Jakarta Land
50
50
IDR
998,883,319,544
Property investment
Indonesia
PT Lazuli Karya Sarana
50
50
IDR
1,510,000,000,000
Property development
Indonesia
PT Ruby Karya Sejahtera
38
38
IDR
2,485,000,000,000
Property development
Indonesia
Sunrise MCL Land Sdn Bhd
50
50
MYR
2,000,000
Property development
Malaysia
Central and Hongkong Land
Company Limited
49
49
THB
5,014,480,000
Property development
Thailand
PFHKL 1 Co., Ltd.
49
49
THB
5,000,000
Property development
Thailand
PFHKL 2 Co., Ltd.
49
49
THB
5,000,000
Property development
Thailand
PFHKL 3 Co., Ltd.
49
49
THB
5,000,000
Property development
Thailand
PFHKL 4 Co., Ltd.
49
49
THB
5,000,000
Property development
Thailand
PFHKL 6 Co., Ltd.
49
49
THB
5,000,000
Property development
Thailand
Jardine Gibbons Properties Limited
40
40
BD
600,000 ‘A’
Property investment
Bermuda
BD
400,000 ‘B’
29 Principal Subsidiaries, Associates and Joint Ventures continued
Annual Report 2024
63
Notes to the Financial Statements
30 Material Accounting Policies
Basis of consolidation
i)
The consolidated financial statements include the financial statements of the Company, its subsidiaries, and the Group’s interests in
associates and joint ventures.
ii)
A subsidiary is an entity over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to,
variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of an acquisition
includes the fair value at the acquisition date of any contingent consideration. The Group recognises the non-controlling interest’s
proportionate share of the recognised identifiable net assets of the acquired subsidiary. In a business combination achieved in stages,
the Group remeasures its previously held interest in the acquiree at its acquisition-date fair value and recognises the resulting gain or
loss in profit and loss. Changes in a parent’s ownership interest in a subsidiary that do not result in the loss of control are accounted for
as equity transactions. When control over a previous subsidiary is lost, any remaining interest in the entity is remeasured at fair value
and the resulting gain or loss is recognised in profit and loss.
All material intercompany transactions, balances and unrealised surpluses and deficits on transactions between Group companies have
been eliminated.
iii) An associate is an entity, not being a subsidiary or joint venture, over which the Group exercises significant influence. A joint venture
is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint
venture. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the
relevant activities require unanimous consent of the parties sharing control.
Associates and joint ventures are included on the equity basis of accounting.
Profits and losses resulting from upstream and downstream transactions between the Group and its associates and joint ventures
are recognised in the consolidated financial statements only to the extent of unrelated investor’s interests in the associates and
joint ventures.
iv) Non-controlling interests represent the proportion of the results and net assets of subsidiaries and their associates and joint ventures
not attributable to the Group.
v)
The results of subsidiaries, associates and joint ventures are included or excluded from their effective dates of acquisition or disposal
respectively. The results of entities other than subsidiaries, associates and joint ventures are included to the extent of dividends received
when the right to receive such dividend is established.
Foreign currencies
Transactions in foreign currencies are accounted for at the exchange rates ruling at the transaction dates.
Assets and liabilities of subsidiaries, associates and joint ventures, together with all other monetary assets and liabilities expressed in foreign
currencies, are translated into United States dollars at the rates of exchange ruling at the year end. Results expressed in foreign currencies
are translated into United States dollars at the average rates of exchange ruling during the year, which approximate the exchange rates at
the dates of the transactions.
Exchange differences arising from the retranslation of the net investment in foreign subsidiaries, associates and joint ventures, and of
financial instruments which are designated as hedges of such investments, are recognised in other comprehensive income and accumulated
in equity under exchange reserves. On the disposal of these investments, such exchange differences are recognised in profit and loss.
All other exchange differences are recognised in profit and loss.
Goodwill and fair value adjustments arising on acquisition of a foreign entity after 1 January 2003 are treated as assets and liabilities of
the foreign entity and translated into United States dollars at the rate of exchange ruling at the year end.
Hongkong Land
64
30 Material Accounting Policies continued
Impairment of non-financial assets
Assets that have indefinite useful lives are not subject to amortisation and are tested for impairment annually and whenever there is an
indication that the assets may be impaired. Assets that are subject to amortisation are reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount may not be recoverable. For the purpose of assessing impairment, assets are grouped
at the lowest level for which there is separately identifiable cash flows. Cash-generating units or groups of cash-generating units to
which goodwill has been allocated are tested for impairment annually and whenever there is an indication that the units may be impaired.
An impairment loss is recognised for the amount by which the carrying amount of the asset exceeds its recoverable amount, which is the
higher of an asset’s fair value less costs to sell and value in use. Non-financial assets other than goodwill that suffered an impairment are
reviewed for possible reversal of the impairment annually.
Fixed assets and depreciation
The building component of owner-occupied leasehold properties are stated at cost less accumulated depreciation and impairment.
Other fixed assets are stated at cost less amounts provided for depreciation.
Depreciation of fixed assets is calculated on the straight line basis to allocate the cost or valuation of each asset to its residual value over its
estimated useful life. The residual values and useful lives are reviewed at each balance sheet date. The estimated useful lives are as follows:
Buildings (remaining useful lives)
49 – 61 years
Hotel property
20 – 30 years
Furniture, equipment and motor vehicles
3 – 10 years
Where the carrying amount of a fixed asset is greater than its estimated recoverable amount, it is written down immediately to
its recoverable amount.
The profit or loss on disposal of fixed assets is recognised by reference to their carrying amount.
Leases
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
i) As a lessee
The Group enters into property leases for use as offices, as well as leases for motor vehicles for use in its operations.
The Group recognises right-of-use assets and lease liabilities at the lease commencement dates, that is the dates the underlying assets
are available for use. Right-of-use assets are measured at cost, less any accumulated depreciation and impairment, and adjusted for
any remeasurement of lease liabilities. The cost of the right-of-use assets includes amounts of the initial measurement of lease liabilities
recognised, lease payments made at or before the commencement dates less any lease incentives received, initial direct costs incurred
and restoration costs. Right-of-use assets are depreciated using the straight-line method over the shorter of their estimated useful lives
and the lease terms.
When right-of-use assets meet the definition of investment properties, they are presented in investment properties, and are initially
measured at cost and subsequently measured at fair value, in accordance with the Group’s accounting policy.
The Group also has interests in leasehold land for use in its operations. Lump sum payments were made upfront to acquire these land
interests from their previous registered owners or governments in the jurisdictions where the land is located. There are no ongoing
payments to be made under the term of the land leases, other than insignificant lease renewal costs or payments based on rateable
value set by the relevant government authorities. These payments are stated at cost and are amortised over the term of the lease
which includes the renewal period if the lease can be renewed by the Group without significant cost.
Lease liabilities are measured at the present value of lease payments to be made over the lease terms. Lease payments include
fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on
an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price
of a purchase option reasonably certain to be exercised and payments of penalties for terminating a lease, if the lease term reflects the
Group exercising that option. The variable lease payments that do not depend on an index or a rate are recognised as expense in the
period on which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease commencement date
if the interest rate implicit in the lease is not readily determinable. Lease liabilities are measured at amortised cost using the effective
interest method. After the commencement date, the amount of lease liabilities is increased by the interest costs on the lease liabilities
and decreased by lease payments made.
Annual Report 2024
65
Notes to the Financial Statements
30 Material Accounting Policies continued
Leases continued
i) As a lessee continued
The carrying amount of lease liabilities is remeasured when there is a change in the lease term, or there is a change in future lease
payments arising from a change in an index or rate, or there is a change in the Group’s estimate of the amount expected to be payable
under a residual guarantee, or there is a change arising from the reassessment of whether the Group will be reasonably certain to
exercise an extension or a termination option. When the lease liability is remeasured, a corresponding adjustment is made to the
carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of right-of-use asset has been reduced
to zero.
The Group has elected not to recognise right-of-use assets and lease liabilities for leases of low value assets and short-term leases.
Low value assets comprised IT equipment and small items of office furniture. Short-term leases are leases with a lease term of
12 months or less. Lease payments associated with these leases are recognised on a straight-line basis as an expense in profit and
loss over the lease term.
Lease liabilities are classified as non-current liabilities unless payments are within 12 months from the balance sheet date.
ii) As a lessor
The Group enters into contracts with lease components as a lessor on its investment properties. These leases are operating leases as
they do not transfer the risk and rewards incidental to the underlying investment properties. The Group recognises the lease payments
received under these operating leases on a straight line basis over the lease term as part of revenue in the profit and loss.
Investment properties
Properties including those under operating leases which are held for long-term rental yields or capital gains are classified and accounted
for as investment properties, but the business model does not necessarily envisage that the properties will be held for their entire useful life.
Investment properties are carried at fair value, representing estimated open market value determined annually by independent qualified
valuers who have recent experience in the location and category of the investment property being valued. The market value of commercial
properties are calculated on the discounted net rental income allowing for reversionary potential. The market value of residential properties
are arrived at by reference to market evidence of transaction prices for similar properties. Changes in fair value are recognised in profit
and loss.
Owner-occupied portions of multi-purpose properties are accounted for as fixed assets unless the portion is considered insignificant, in
which case this portion is treated as part of investment properties.
Properties for sale
Properties for sale, which comprise land and buildings held for resale, are stated at the lower of cost and net realisable value. The cost of
properties for sale comprises land cost, construction and other development costs, and borrowing costs. A portion of the properties for sale
is leased out prior to sales to enhance shareholder profitability. These leased properties are classified and accounted for as properties held
for sale.
Debtors
Trade debtors are recognised initially at the amount of consideration that is unconditional and measured subsequently at amortised cost
using the effective interest method. A contract asset arises if the Group has a right to consideration in exchange for goods or services the
Group has transferred to a customer, that is conditional on something other than the passage of time. All other debtors, excluding derivative
financial instruments, are measured at amortised cost except where the effect of discounting would be immaterial. For trade debtors and
contract assets, the Group applied the simplified approach as permitted by IFRS 9, which requires expected lifetime losses to be recognised
from initial recognition of the debtors. Provision for impairment is established by considering potential financial difficulties of the debtor,
probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments. The carrying amount
of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in arriving at operating profit.
When a debtor is uncollectible, it is written off against the allowance account. Subsequent recoveries of amount previously written off are
credited to profit and loss.
Debtors with maturities greater than 12 months after the balance sheet date are classified under non-current assets.
Hongkong Land
66
30 Material Accounting Policies continued
Cash and cash bank balances
Cash and deposits with banks, which are restricted in use (Restricted cash and bank balances), are classified as cash and bank balances.
If such balances are restricted in use for a period exceeding one year, they are classified as part of other debtors.
For the purposes of the cash flow statement, cash and cash equivalents comprise deposits at call with banks and financial institutions,
bank and cash balances, and other liquid investments, with original maturities of three months or less, net of bank overdrafts. In the balance
sheet, bank overdrafts are included in current borrowings. Restricted cash and bank balances that are not available for use within three
months from the balance sheet date are excluded from cash and cash equivalents.
Provisions
Provisions are recognised when the Group has present legal or constructive obligations as a result of past events, it is probable that an
outflow of resources embodying economic benefits will be required to settle the obligations, and a reliable estimate of the amount of the
obligations can be made.
Borrowings and borrowing costs
Borrowings are initially recognised at fair value, net of transaction costs incurred. In subsequent periods, borrowings are stated at amortised
cost using the effective interest method.
Borrowing costs relating to major development projects are capitalised until the asset is substantially completed. Capitalised borrowing
costs are included as part of the cost of the asset. All other borrowing costs are expensed as incurred.
Borrowings are classified as current liabilities unless, at the end of the reporting period, the Group has an unconditional right to defer
settlement of the liability for at least 12 months after the balance sheet date.
Current and deferred tax
The tax expense for the year comprises current and deferred tax. Tax is recognised in profit and loss, except to the extent that it relates to
items recognised in other comprehensive income or direct in equity. In this case, the tax is also recognised in other comprehensive income
or directly in equity respectively.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the
countries where the Group operates and generates taxable income. Management periodically evaluates positions taken in tax returns with
respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of
amounts expected to be paid to the tax authorities.
Deferred tax is provided, using the liability method, for all temporary differences arising between the tax bases of assets and liabilities and
their carrying values. Deferred tax is determined using tax rates and laws that have been enacted or substantially enacted by the balance
sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.
Provision for deferred tax is made on the revaluation of certain non-current assets and, in relation to acquisitions, on the difference between
the fair value of the net assets acquired and their tax base. Deferred tax is provided on temporary differences associated with investments
in subsidiaries, associates and joint ventures, except where the Group is able to control the reversal of the temporary difference and it is
probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets relating to the carry forward of unused
tax losses are recognised to the extent that it is probable that future taxable profit will be available against which the unused tax losses can
be utilised.
Pension obligations
The Group operates a number of defined benefit and defined contribution plans, the assets of which are held in trustee administered funds.
Pension accounting costs for defined benefit plans are assessed using the projected unit credit method. Under this method, the costs of
providing pensions are charged to profit and loss spreading the regular cost over the service lives of employees in accordance with the
advice of qualified actuaries, who carry out a full valuation of major plans every year. Plan assets are measured at fair value.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in other
comprehensive income in the year in which they occur. Past service costs are recognised immediately in profit and loss.
The Group’s total contributions relating to the defined contribution plans are charged to profit and loss in the year to which they relate.
Annual Report 2024
67
Notes to the Financial Statements
30 Material Accounting Policies continued
Share-based compensation
The Company operates a number of equity-settled employee share award schemes. The fair value of the employee services received
in exchange for the grant of the share awards is recognised as an expense. The total amount to be expensed over the vesting period
is determined by reference to the fair value of the share awards granted as determined on the grant date. At each balance sheet date,
the Company revised its estimates of the number of share awards which will be vested free of payment. The impact of the revision of
original estimates, if any, is recognised in profit and loss.
Assets held for sale
Assets are classified as held for sale and stated at the lower of carrying amount and fair value less costs to sell if their carrying amounts are
expected to be recovered principally through a sale transaction rather than through continuing use. Once classified as held for sale, assets
are no longer amortised or depreciated.
Derivative financial instruments
The Group only enters into derivative financial instruments in order to hedge underlying exposures and not as speculative investments.
Derivative financial instruments are initially recognised at fair value on the date a derivative contract is entered into and are subsequently
remeasured at their fair value. The method of recognising the resulting gain or loss is dependent on the nature of the item being hedged.
The Group designates certain derivatives as a hedge of the fair value of a recognised asset or liability (fair value hedge), or a hedge
of a forecast transaction or of the foreign currency risk on a firm commitment (cash flow hedge), or a hedge of a net investment in
a foreign entity.
At inception of the hedge relationship, the Group documents the economic relationship between hedging instruments and hedged items
including whether changes in the cash flows of the hedging instruments are expected to offset changes in the cash flows of hedged items.
The Group documents its risk management objective and strategy for undertaking its hedge transactions.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges and that are highly effective, are recognised
in profit and loss, along with any changes in the fair value of the hedged asset or liability that is attributable to the hedged risk. The gain or
loss relating to the effective portion of interest rate swaps hedging fixed rate borrowings is recognised in profit and loss within finance costs,
together with changes in the fair value of the hedged fixed rate borrowings attributable to interest rate risk. The gain or loss relating to the
ineffective portion is recognised in profit and loss. When a hedging instrument expires or is sold, or when a hedge no longer meets the
criteria for hedge accounting, the cumulative adjustment to the carrying amount of a hedged item for which the effective interest method
is used is amortised to profit and loss over the residual period to maturity.
Changes in the fair value of derivatives that are designated and qualify as cash flow hedges and that are highly effective, are recognised in
other comprehensive income and accumulated in equity under hedging reserves. Changes in the fair value relating to the ineffective portion
is recognised immediately in profit and loss. Where the hedged item results in the recognition of a non-financial asset or of a non-financial
liability, the deferred gains and losses are included in the initial measurement of the cost of the asset or liability. The deferred amounts are
ultimately recognised in profit and loss as the hedged item affects profit and loss. Otherwise, amounts deferred in hedging reserves are
transferred to profit and loss in the same periods during which the hedged firm commitment or forecast transaction affects profit and loss.
The gain or loss relating to the effective portion of the interest rate swaps hedging variable rate borrowings is recognised in profit and loss
within finance cost at the same time as the interest expense on the hedged borrowings. When a hedging instrument expires or is sold,
or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in hedging reserves at that time
remains in the hedging reserves and is recognised when the committed or forecast transaction ultimately is recognised in profit and loss.
When a committed or forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in hedging reserves
is immediately transferred to profit and loss.
Certain derivative transactions, while providing effective economic hedges under the Group’s risk management policies, do not qualify for
hedge accounting under the specific rules in IFRS 9. Changes in the fair value of any derivative instruments that do not qualify for hedge
accounting under IFRS 9 are recognised immediately in profit and loss.
Hedges of net investments in foreign entities are accounted for on a similar basis to that used for cash flow hedges. Any gain or loss on the
hedging instrument relating to the effective portion of the hedge is recognised in other comprehensive income and accumulated in exchange
reserves; the gain or loss relating to the ineffective portion is recognised immediately in profit and loss.
The fair value of derivatives which are designated and qualify as effective hedges are classified as non-current assets or liabilities if the
remaining maturities of the hedged assets or liabilities are greater than 12 months after the balance sheet date.
Hongkong Land
68
30 Material Accounting Policies continued
Offsetting financial instruments
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to
offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.
The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the
event of default, insolvency or bankruptcy of the company or the counterparty.
Non-trading items
Non-trading items are separately identified to provide greater understanding of the Group’s underlying business performance.
Items classified as non-trading items include fair value gains or losses on revaluation of investment properties; gains and losses arising
from the sale of businesses and investment properties; impairment of non-depreciable intangible assets; provisions for the closure of
businesses; acquisition-related costs in business combinations; and other credits and charges of a non-recurring nature that require
inclusion in order to provide additional insight into underlying business performance.
Earnings per share
Basic earnings per share are calculated on profit attributable to shareholders and on the weighted average number of shares in issue during
the year. The weighted average number excludes the shares held by the subsidiaries. For the purpose of calculating diluted earnings per
share, profit attributable to shareholders is adjusted for the effects of the conversion of dilutive potential ordinary shares, and the weighted
average number of shares is adjusted for the number of shares which are deemed to be issued for no consideration under the share-based
long-term incentive plans based on the average share price during the year.
Dividends
Dividends proposed or declared after the balance sheet date are not recognised as a liability at the balance sheet date.
Revenue recognition
i) Properties for sale
Revenue from properties for sale is recognised when or as the control of the property is transferred to the customer. Revenue consists of
the fair value of the consideration received and receivable, net of value added tax, rebates and discounts. Proceeds received in advance
for pre-sale are recorded as contract liabilities. Depending on the terms of the contract and the laws that apply to the contract, control of
the property may transfer over time or at a point in time.
If control of the property transfers over time, revenue is recognised over the period of the contract by reference to the progress towards
complete satisfaction of that performance obligation. Otherwise, revenue is recognised at a point in time when the customer obtains
control of the property.
The progress towards complete satisfaction of the performance obligation is measured based on the Group’s efforts or inputs to the
satisfaction of the performance obligation, by reference to the contract costs incurred up to the end of reporting period as a percentage
of total estimated costs for each contract.
For properties for sale under development and sales contract for which the control of the property is transferred at a point in time,
revenue is recognised when the customer obtains the physical possession or the legal title of the completed property and the Group
has present right to payment and the collection of the consideration is probable.
ii) Investment properties
Rental income from investment properties are accounted for on an accruals basis over the lease term.
iii) Service income and others
Revenue from property management service and hospitality service are recognised when services are performed provided that the
amount can be measured reliably.
Annual Report 2024
69
Notes to the Financial Statements
31 Standards and Amendments Issued but Not Yet Effective
A number of new standard and amendments effective for accounting periods beginning after 2024 have been published and will be adopted
by the Group from their effective dates. The Group is currently assessing the potential impact of these standard and amendments but
expects their adoption will not have a significant impact on the Group’s consolidated financial statements. The more important standard
and amendments that are relevant to the Group are set out below.
Amendments to the Classification and Measurement of Financial Instruments – Amendments to IFRS 9 and IFRS 7
(effective from 1 January 2026)
These amendments clarify i) the date of recognition and derecognition of some financial assets and liabilities, with a new exception for some
financial liabilities settled through an electronic cash transfer system; ii) further guidance for assessing whether a financial asset meets the
solely payments of principal and interest criterion; iii) add new disclosures for certain instruments with contractual terms that can change
cash flows (such as some financial instruments with features linked to the achievement of environment, social and governance targets); and
iv) update the disclosures for equity instruments designated at fair value through other comprehensive income. The Group is assessing the
impact on the Group’s consolidated financial statements.
IFRS 18 ‘Presentation and Disclosure in Financial Statements’ (effective from 1 January 2027)
The standard requires new presentation and disclosure in financial statements, which replaces IAS 1, with a focus on updates to the
statement of profit and loss. The key new concepts introduced in IFRS 18 relate to i) the structure of the statement of profit and loss with
defined subtotals; ii) requirement to determine the most useful structure summary for presenting expenses in the statement of profit and
loss; iii) required disclosures in a single note within the financial statements for certain profit and loss performance measures that are
reported outside an entity’s financial statements (that is, management-defined performance measures); and iv) enhanced principles on
aggregation and disaggregation which apply to the primary financial statements and notes in general. The Group is assessing the changes
on presentation and disclosure required in the Group’s consolidated financial statements.
32 Financial Risk Management
Financial risk factors
The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk),
credit risk and liquidity risk.
The Group’s treasury function co-ordinates, under the directions of the board of Hongkong Land Limited, financial risk management policies
and their implementation on a group-wide basis. The Group’s treasury policies are designed to manage the financial impact of fluctuations
in interest rates and foreign exchange rates and to minimise the Group’s financial risks. The Group uses derivative financial instruments,
principally interest rate swaps, cross-currency swaps and forward foreign exchange contracts as appropriate for hedging transactions and
managing the Group’s assets and liabilities in accordance with the Group’s financial risk management policies. Financial derivative contracts
are executed between third party banks and the Group entity that is directly exposed to the risk being hedged. Hedge accounting is applied
to remove the accounting mismatch between the hedging instrument and the hedged item. The effective portion of the change in the fair
value of the hedging instrument is deferred into the cash flow hedge reserve through other comprehensive income and will be recognised
in profit and loss when the hedged item affects profit and loss. The ineffective portion will be recognised in the profit and loss immediately.
In general, the volatility in profit or loss can be reduced by applying hedge accounting.
Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectiveness assessments to
ensure that an economic relationship exists between the hedged item and hedging instrument.
For hedges of foreign currency purchases, the Group enters into hedge relationships where the critical terms of the hedging instrument
match exactly with the terms of the hedged item. The Group assesses whether the derivative designated in each hedging relationship has
been and expected to be effective in offsetting changes in cash flows of the hedged item using the hypothetical derivative method.
Ineffectiveness may arise if the timing of the forecast transaction changes from what was originally estimated for hedges of foreign currency
purchases, or if there are changes in the credit risk of the Group or the derivative counterparty.
Hongkong Land
70
32 Financial Risk Management continued
Financial risk factors continued
i) Market risk
Foreign exchange risk
Entities within the Group are exposed to foreign exchange risk from future commercial transactions, net investments in foreign
operations and net monetary assets and liabilities that are denominated in a currency that is not the entity’s functional currency.
Entities in the Group use cross-currency swaps and forward foreign exchange contracts in a consistent manner to hedge firm and
anticipated foreign exchange commitments and manage their foreign exchange risk arising from future commercial transactions.
The Group does not usually hedge its net investments in foreign operations except in circumstances where there is a material exposure
arising from a currency that is anticipated to be volatile and the hedging is cost effective. Group entities are required to manage their
foreign exchange risk against their functional currency. Foreign currency borrowings are swapped into the entity’s functional currency
using cross-currency swaps except where the foreign currency borrowings are repaid with cash flows generated in the same foreign
currency. The purpose of these hedges is to mitigate the impact of movements in foreign exchange rates on assets and liabilities and
the profit and loss account of the Group.
Currency risks as defined by IFRS 7 arise on account of monetary assets and liabilities being denominated in a currency that is not
the functional currency. At 31 December 2024, there are no significant monetary balances held by group companies that are
denominated in a non-functional currency other than the cross-currency swap contracts with contract amounts of US$2,100.0 million
(2023: US$2,500.0 million). Differences resulting from the translation of financial statements into the Group’s presentation currency
are not taken into consideration.
Since the Group manages the interdependencies between foreign exchange risk and interest rate risk of foreign currency borrowings
using cross-currency swaps, the sensitivity analysis on financial impacts arising from cross-currency swaps is included in the sensitivity
assessment on interest rates under the interest rate risk section.
Interest rate risk
The Group is exposed to interest rate risk through the impact of rate changes on interest bearing liabilities and assets. These exposures
are managed partly by using natural hedges that arise from offsetting interest rate sensitive assets and liabilities, and partly through
fixed rate borrowings and the use of derivative financial instruments such as interest rate swaps. The Group monitors interest rate
exposure on a monthly basis by currency and business unit, taking into consideration proposed financing and hedging arrangements.
The Group’s guideline is to maintain 40% to 60% of its gross borrowings in fixed rate instruments. At 31 December 2024, the Group’s
interest rate hedge was 68% (2023: 62%) with an average tenor of six years (2023: seven years). The interest rate profile of the Group’s
borrowings after taking into account hedging transactions are set out in Note 19.
Cash flow interest rate risk is the risk that changes in market interest rates will impact cash flows arising from variable rate financial
instruments. Borrowings at floating rates therefore expose the Group to cash flow interest rate risk. The Group manages this risk by
using forward rate agreements to a maturity of one year, and by entering into interest rate swaps for a maturity of up to five years.
Forward rate agreements and interest rate swaps have the economic effect of converting borrowings from floating rates to fixed rates.
Details of derivative financial statements are set out in Note 24.
Fair value interest rate risk is the risk that the value of a financial asset or liability and derivative financial instrument will fluctuate
because of changes in market interest rates. The Group manages its fair value interest rate risk by entering into interest rate swaps
which have the economic effect of converting borrowings from fixed rates to floating rates, to maintain the Group’s fixed rate
instruments within the Group’s guideline.
Annual Report 2024
71
Notes to the Financial Statements
32 Financial Risk Management continued
Financial risk factors continued
i) Market risk continued
Interest rate risk continued
At 31 December 2024, if interest rates had been 100 basis points higher/lower with all other variables held constant, the Group’s profit
after tax would have been US$2.4 million higher/lower (2023: US$1.9 million lower/higher), and hedging reserve would have been
US$80.6 million higher/lower (2023: US$103.8 million), as a result of fair value changes to cash flow hedges. The sensitivity analysis
has been determined assuming that the change in interest rates had occurred at the balance sheet date and had been applied to the
exposure to interest rate risk for both derivative and non-derivative financial instruments in existence at that date. The 100 basis point
increase or decrease represents management’s assessment of a reasonably possible change in those interest rates which have the most
impact on the Group, specifically the United States, Hong Kong, Chinese mainland and Singapore rates, over the period until the next
annual balance sheet date. In the case of effective fair value hedges, changes in fair value of the hedged item caused by interest rate
movements balance out in profit and loss account against changes in the fair value of the hedging instruments. Changes in market
interest rates affect the interest income or expense of non-derivative variable-interest financial instruments, the interest payments of
which are not designated as hedged items of cash flow hedges against interest rate risks. As a consequence, they are included in the
calculation of profit after tax sensitivities. Changes in the market interest rate of financial instruments that were designated as hedging
instruments in a cash flow hedge to hedge payment fluctuations resulting from interest rate movements affect the hedging reserves and
are therefore taken into consideration in the equity-related sensitivity calculations.
ii) Credit risk
The Group’s credit risk is primarily attributable to deposits with banks, credit exposures to customers and derivative financial
instruments with a positive fair value. The Group has credit policies in place and the exposures to these credit risks are monitored
on an ongoing basis.
The Group manages its deposits with banks and financial institutions and transactions involving derivative financial instruments by
monitoring credit ratings and capital adequacy ratios of counterparties, and limiting the aggregate risk to any individual counterparty.
The utilisation of credit limits is regularly monitored. Similarly transactions involving derivative financial instruments are with banks
with sound credit ratings and capital adequacy ratios. In developing countries it may be necessary to deposit money with banks that
have a lower credit rating, however the Group only enters into derivative transactions with counterparties which have credit ratings of
at least investment grade. Management does not expect any counterparty to fail to meet its obligations.
In respect of credit exposures to customers, the Group has policies in place to ensure that investment properties are leased principally to
corporate companies with appropriate credit history, and rental deposits in the form of cash or bank guarantee are usually received from
tenants. The Group receives progress payments from sales of residential properties to individual customers prior to the completion of
transactions. In the event of default by customers, the Group undertakes legal proceedings to recover the property. Amounts due from
associates and joint ventures are generally supported by the underlying assets.
The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the balance sheet after deducting
any impairment allowance.
Hongkong Land
72
32 Financial Risk Management continued
Financial risk factors continued
iii) Liquidity risk
Prudent liquidity risk management includes managing the profile of debt maturities and funding sources, maintaining sufficient cash,
and ensuring the availability of funding from an adequate amount of committed credit facilities and the ability to close out market
positions. The Group’s ability to fund its existing and prospective debt requirements is managed by maintaining diversified funding
sources with adequate committed funding lines from high quality lenders, and by monitoring rolling short-term forecasts of the Group’s
cash and gross debt on the basis of expected cash flows. In addition long-term cash flows are projected to assist with the Group’s
long-term debt financing plans.
At 31 December 2024, total committed and uncommitted borrowing facilities amounted to US$8,340.6 million (2023: US$9,672.0 million)
of which US$6,165.3 million (2023: US$6,567.2 million) was drawn down. Undrawn committed facilities, in the form of revolving credit
and term loan facilities, totalled US$1,970.9 million (2023: US$2,895.2 million). Undrawn uncommitted facilities in the form of revolving
credit loan facilities, amounted to US$204.4 million (2023: US$209.6 million).
The following table analyses the Group’s non-derivative financial liabilities, including borrowings, trade and other creditors, tenants’
deposits, lease liabilities and gross-settled financial instruments into relevant maturity groupings based on the remaining period at
the balance sheet date to the contractual maturity date. Derivative financial liabilities are included in the analysis if their contractual
maturities are essential for an understanding of the timing of the cash flows. The amounts disclosed in the table are the contractual
undiscounted cash flows.
Within
one year
Between
one and
two years
Between
two and
three years
Between
three and
four years
Between
four and
five years
Beyond
five years
Total
undiscounted
cash flows
US$m
US$m
US$m
US$m
US$m
US$m
US$m
2024
Borrowings
1,033.9
629.1
951.4
734.1
443.8
3,548.8
7,341.1
Creditors
1,343.6
891.1
38.0
20.4
9.5
44.5
2,347.1
Gross settled derivative
financial instruments
– inflow
670.4
49.5
49.5
49.5
49.5
1,598.5
2,466.9
– outflow
(669.4)
(50.2)
(50.2)
(50.2)
(50.2)
(1,598.9)
(2,469.1)
2023
Borrowings
1,012.6
1,666.9
651.6
372.1
359.0
3,805.6
7,867.8
Creditors
1,415.4
913.9
33.4
22.3
15.7
45.7
2,446.4
Gross settled derivative
financial instruments
– inflow
477.3
670.4
49.5
49.5
49.5
1,648.2
2,944.4
– outflow
(472.4)
(665.1)
(49.8)
(49.8)
(49.8)
(1,638.7)
(2,925.6)
Annual Report 2024
73
Notes to the Financial Statements
32 Financial Risk Management continued
Capital management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern whilst seeking to
maximise benefits to shareholders and other stakeholders. Capital is equity as shown in the consolidated balance sheet plus net debt.
The Group actively and regularly reviews and manages its capital structure to ensure optimal capital structure and shareholder returns,
taking into consideration the future capital requirements of the Group and capital efficiency, prevailing and projected profitability, projected
operating cash flows, projected capital expenditures and projected strategic investment opportunities. In order to maintain or adjust the
capital structure, the Group may adjust the amount of dividends paid to shareholders, purchase Group shares, return capital to shareholders,
issue new shares or sell assets to reduce debt. The Group does not have a defined dividend policy or share repurchase plan.
The Group monitors capital on the basis of the Group’s consolidated gearing ratio and consolidated interest cover. The gearing ratio is
calculated as net debt divided by total equity. Net debt is calculated as total borrowings less bank balances (including balances classified
as asset held for sale). Interest cover is calculated as underlying operating profit and the Group’s share of underlying operating profit of
associates and joint ventures divided by net financing charges including the Group’s share of net financing charges within associates and
joint ventures. The Group does not have a defined gearing or interest cover benchmark or range.
The ratios at 31 December 2024 and 2023 are as follows:
2024
2023
Gearing ratio (%)
17
17
Interest cover (times)
3.6
4.3
Fair value estimation
i) Financial instruments that are measured at fair value in the balance sheet based on inputs other than
quoted prices in active markets that are observable for the asset or liability, either directly or indirectly
(observable current market transactions)
The fair values of derivative financial instruments are determined using rates quoted by the Group’s bankers at the balance sheet date.
The rates for interest rate swaps are calculated by reference to market interest rates.
Observable current
market transactions
2024
2023
US$m
US$m
Assets
Derivative designated at fair value
– through other comprehensive income
0.2
2.7
– through profit and loss
–
1.3
0.2
4.0
Liabilities
Derivative designated at fair value
– through other comprehensive income
(65.8)
(62.0)
There were no changes in valuation techniques during the year.
Hongkong Land
74
32 Financial Risk Management continued
Fair value estimation continued
ii) Financial instruments that are not measured at fair value
The fair values of current debtors, bank balances, current creditors, current borrowings and current lease liabilities are assumed to
approximate their carrying amounts due to the short-term maturities of these assets and liabilities.
The fair values of long-term borrowings are based on market prices or are estimated using the expected future payments discounted
at market interest rates. The fair values of non-current lease liabilities are estimated using the expected future payments discounted at
market interest rates.
Financial instruments by category
The fair values of financial assets and financial liabilities, together with carrying amounts at 31 December 2024 and 2023 are as follows:
Fair value
of hedging
instruments
Financial
assets at
amortised
costs
Other
financial
liabilities
Total
carrying
amount
Fair value
US$m
US$m
US$m
US$m
US$m
2024
Financial assets measured at fair value
Derivative financial instruments
0.2
–
–
0.2
0.2
Financial assets not measured at fair value
Amounts due from associates and joint ventures
–
1,915.3
–
1,915.3
1,915.3
Debtors
–
235.9
–
235.9
235.9
Bank balances
–
1,073.4
–
1,073.4
1,073.4
–
3,224.6
–
3,224.6
3,224.6
Financial liabilities measured at fair value
Derivative financial instruments
(65.8)
–
(65.8)
(65.8)
(65.8)
Financial liabilities not measured at fair value
Borrowings
–
–
(6,165.3)
(6,165.3)
(5,935.6)
Creditors
–
–
(2,347.1)
(2,347.1)
(2,347.1)
–
–
(8,512.4)
(8,512.4)
(8,282.7)
2023
Financial assets measured at fair value
Derivative financial instruments
4.0
–
–
4.0
4.0
Financial assets not measured at fair value
Amounts due from associates and joint ventures
–
2,269.7
–
2,269.7
2,269.7
Debtors
–
245.1
–
245.1
245.1
Bank balances
–
1,195.6
–
1,195.6
1,195.6
–
3,710.4
–
3,710.4
3,710.4
Financial liabilities measured at fair value
Derivative financial instruments
(62.0)
–
–
(62.0)
(62.0)
Financial liabilities not measured at fair value
Borrowings
–
–
(6,566.9)
(6,566.9)
(6,326.5)
Creditors
–
–
(2,446.4)
(2,446.4)
(2,446.4)
–
–
(9,013.3)
(9,013.3)
(8,772.9)
Annual Report 2024
75
Notes to the Financial Statements
33 Critical Accounting Estimates and Judgements
Estimates and judgements used in preparing the financial statements are continually evaluated and are based on historical experience and
other factors, including expectations of future events that are believed to be reasonable according to circumstances and conditions available.
The existing and potential impacts arising from climate change have been considered when applying estimates and assumptions in the
preparation of the financial statements, including the Group’s assessment of impairment of assets and the independent valuers’ valuation
of the Group’s investment properties.
The estimates and assumptions that have a significant effect on the reported amounts of assets and liabilities, and income and expenses are
discussed below.
Significant areas of estimation uncertainty
Acquisition of subsidiaries, associates and joint ventures
The initial accounting on the acquisition of subsidiaries, associates and joint ventures involves identifying and determining the fair values
to be assigned to the identifiable assets, liabilities and contingent liabilities of the acquired entities. The fair values of tangible assets,
right-of-use assets and investment properties are determined by independent valuers by reference to market prices or present value of
expected net cash flows from the assets. Any changes in the assumptions used and estimates made in determining the fair values, and
management’s ability to measure reliably the contingent liabilities of the acquired entity will impact the carrying amount of these assets
and liabilities.
On initial acquisition or acquisition of further interests in an entity, an assessment of the level of control or influence exercised by the Group
is required. For entities where the Group has a shareholding of less than 50%, an assessment of the Group’s level of voting rights, board
representation and other indicators of influence is performed to consider whether the Group has de facto control, requiring consolidation
of that entity, or significant influence, requiring classification as an associate, or joint control, requiring classification as a joint venture.
Investment properties
The fair values of investment properties are determined by independent valuers on an open market for existing use basis calculated on
the discounted net income allowing for reversionary potential. For investment properties in Hong Kong, Chinese mainland and Singapore,
capitalisation rates in the range of 2.90% to 3.50% for office (2023: 2.90% to 3.50%) and 3.50% to 5.00% for retail (2023: 3.75% to 5.00%) are
used in the fair value determination.
Consideration has been given to assumptions that are mainly based on market conditions existing at the balance sheet date and appropriate
capitalisation rates. These estimates are regularly compared to actual market data and actual transactions entered into by the Group.
The independent valuers have considered climate change, sustainability, resilience and environmental, social and governance (ESG) within
their valuations. Properties held by the Group are considered to currently display ESG characteristics that would be expected in the market,
and therefore there were no direct and tangible pricing adjustments required to the valuation of investment properties. The Group will
monitor these considerations for each reporting period.
Properties for Sale
The Group assesses the carrying amounts of properties for sale held by both subsidiaries and joint ventures according to their estimated net
realisable value, taking into account construction costs to complete based on the existing development plans, and an estimation of future
selling prices based on properties of comparable locations and conditions. Write-downs are made when events or changes in circumstances
indicate that the carrying amounts may not be realised.
Given the significant market volatility in the Chinese mainland property market, the Group considers that selling price is a significant
estimate in determining the net realisable value of certain properties for sale.
Hongkong Land
76
33 Critical Accounting Estimates and Judgements continued
Significant areas of estimation uncertainty continued
Impairment of assets
Assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset exceeds
its recoverable amount. The recoverable amount of an asset or a cash generating unit is determined based on the higher of its fair value
less costs to sell and its value-in-use, calculated on the basis of management’s assumptions and estimates. Changing the key assumptions,
including the discount rates or the growth rate assumptions in the cash flow projections, could materially affect the value-in-use calculations.
Significant areas of judgement
Impairment of financial assets
The loss allowances for financial assets are based on assumptions about risk of default and expected loss rates. The Group uses judgement
in making these assumptions and selecting the inputs to the impairment calculation, based on the Group’s past history, existing market
conditions as well as forward looking estimates at the balance sheet date (see Note 13).
Income taxes
The Group is subject to income taxes in numerous jurisdictions. Significant judgement is required in determining the worldwide provision
for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary
course of business. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences
will impact the income tax and deferred tax provisions in the period in which such determination is made.
Provision of deferred tax follows the way management expects to recover or settle the carrying amount of the related assets or liabilities,
which the management may expect to recover through use, sale or combination of both. Accordingly, deferred tax will be calculated
at income tax rate, capital gains tax rate or combination of both. There is a rebuttable presumption in International Financial Reporting
Standards that investment properties measured at fair value are recovered through sale. Thus deferred tax on revaluation of investment
properties held by the Group are calculated at the capital gain tax rate.
Recognition of deferred tax assets, which principally relate to tax losses, depends on the management’s expectation of future taxable profit
that will be available against which the tax losses can be utilised. The outcome of their actual utilisation may be different.
Revenue recognition
The Group uses the percentage of completion method to account for its contract revenue of certain properties sales. The stage of
completion is measured by reference to the contract costs incurred to date compared to the estimated total costs for the contract.
Significant assumptions are required to estimate the total contract costs and the recoverable variation works that affect the stage of
completion and the contract revenue respectively. In making these estimates, management has relied on past experience and the work
of specialists.
Non-trading items
The Group uses underlying business performance in its internal financial reporting to distinguish between the underlying profits and
non-trading items. The identification of non-trading items requires judgement by management, but follows the consistent methodology
as set out in the Group’s accounting policies.
Annual Report 2024
77
To the Members of Hongkong Land Holdings Limited
(incorporated in Bermuda with limited liability)
Report on the Audit of the Consolidated Financial Statements
Opinion
What we have audited
The consolidated financial statements of Hongkong Land Holdings Limited (the ‘Company’) and its subsidiaries (the ‘Group’), included within the
Annual Report, which comprise:
• the Consolidated Balance Sheet at 31 December 2024;
• the Consolidated Profit and Loss Account for the year then ended;
• the Consolidated Statement of Comprehensive Income for the year then ended;
• the Consolidated Statement of Changes in Equity for the year then ended;
• the Consolidated Cash Flow Statement for the year then ended; and
• the Notes to the Financial Statements, comprising material accounting policy information and other explanatory information.
Certain required disclosures have been presented elsewhere in the Annual Report, rather than in the notes to the consolidated financial statements.
These disclosures are cross-referenced from the consolidated financial statements and are identified as audited.
Our opinion
In our opinion, the consolidated financial statements give a true and fair view of the consolidated financial position of the Group as at 31 December
2024, and of its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with IFRS Accounting
Standards as issued by the International Accounting Standards Board (‘IASB’).
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (‘ISAs’). Our responsibilities under those standards are further
described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We are independent of the Group in accordance with the International Code of Ethics for Professional Accountants (including International
Independence Standards) issued by the International Ethics Standards Board for Accountants (‘IESBA Code’), and we have fulfilled our other ethical
responsibilities in accordance with the IESBA Code.
Our Audit Approach
Overview
Materiality
• Overall Group materiality: US$299 million (2023: US$319 million), based on 1% (2023: 1%) of the net assets.
• Specific Group materiality, applied to balances and transactions not related to investment properties: US$26 million (2023: US$42 million), based
on 5% (2023: 5%) of consolidated underlying profit before tax of the Group.
Audit scope
• Full scope audits were performed on 16 subsidiaries. These subsidiaries, together with procedures performed on centralised functions and at the
Group level, accounted for 89% of the Group’s revenue, 85% of the Group’s loss before tax, 75% of the Group’s underlying profit before tax and
79% of the Group’s net assets.
• Full scope audits of 14 joint ventures were also performed, which accounted for a further 13% of the Group’s loss before tax, 22% of the Group’s
underlying profit before tax and 16% of the Group’s net assets.
Independent Auditor’s Report
Hongkong Land
78
Our Audit Approach continued
Key audit matters identified in our audit are summarised as follows:
• Valuation of investment properties held by the Group and its joint ventures; and
• Recoverability of properties for sale held by the Group and its joint ventures.
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the consolidated financial statements.
In particular, we considered where the Directors made subjective judgements; for example, in respect of significant accounting estimates that
involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also addressed the risk of
management override of internal controls, including among other matters, consideration of whether there was evidence of bias by the Directors
that represented a risk of material misstatement due to fraud.
Materiality
The scope of our audit was influenced by our application of materiality. An audit is designed to obtain reasonable assurance whether the
consolidated financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered
material if individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the
consolidated financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall group materiality for the
consolidated financial statements as a whole as set out in the table below. These, together with qualitative considerations, helped us to determine
the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually and
in aggregate on the consolidated financial statements as a whole.
Overall group materiality
US$299 million (2023: US$319 million)
How we determined it
1% of net assets of the Group (2023: 1% of net assets of the Group)
Rationale for the materiality
benchmark applied
A key determinant of the Group’s value is investment property. As net assets is the primary measure
used by the shareholders in assessing the performance of the Group, we set an overall Group
materiality level based on net assets.
We set a specific materiality level of US$26 million (2023: US$42 million), which was applied to balances and transactions not related to investment
properties. This was based upon 5% of the Group’s consolidated underlying profit before tax for the year ended 31 December 2024 (2023: 5% of the
Group’s consolidated underlying profit before tax for the year ended 31 December 2023). In arriving at this judgement, we had regard to the fact
that underlying profit is one of the primary financial indicators of the Group.
For each component in the scope of our Group audit, we allocated a materiality that is less than our overall Group materiality.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit in respect of the investment property
related items above US$10 million (2023: US$12 million) as well as misstatements below this amount that in our view, warranted reporting
for qualitative reasons. For all other account balances and transaction, we agreed with the Audit Committee that we would report to them
misstatements identified during our audit above US$1.3 million (2023: US$2.1 million) as well as misstatements below this amount that in
our view, warranted reporting for qualitative reasons.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial
statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole,
and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Annual Report 2024
79
Independent Auditor’s Report
Key Audit Matters continued
Key Audit Matter
How our audit addressed the Key Audit Matter
Valuation of investment properties held by
the Group and its joint ventures
Refer to Note 33 (Critical Accounting Estimates and Judgements),
Note 11 (Investment Properties) and Note 12 (Associates and joint
ventures) to the consolidated financial statements.
The fair value of the Group’s investment properties amounted
to US$24,759.9 million at 31 December 2024, with a revaluation
loss of US$1,887.6 million recognised as a non-trading item in the
Consolidated Profit and Loss Account for the year. The Group’s
property portfolio principally consists of commercial properties.
The Group also has significant interest in investment properties
held by its joint ventures.
The valuation of the Group’s investment property portfolio is
inherently subjective due to, among other factors, the individual
nature of each property, its location, prevailing market rents and the
expected future rentals for that particular property. The valuations
were carried out by third party valuers (the ‘valuers’).
The valuers were engaged by the management, and performed
their work in accordance with the International Valuation Standards.
Valuations of the commercial properties were principally derived
using the income capitalisation method. There is inherent estimation
uncertainty in determining a property’s valuation as the valuers and
management make assumptions in key areas, in particular in respect
of capitalisation rates and prevailing market rents.
We focused on the valuation of investment properties due to the
significant judgements and estimates involved in determining
the valuations.
We understood management’s controls and processes for
determining the valuation of investment properties and assessed
the inherent risk of material misstatement by considering the degree
of estimation uncertainty and the judgement involved in determining
assumptions to be applied.
We assessed the valuers’ qualifications and their expertise and read
the terms of engagement with the group to determine whether there
were any matters that might have affected their objectivity or may
have imposed scope limitations upon their work. We found no
evidence to suggest that the objectivity of the valuers in their
performance of the valuations was compromised.
Our work focused on the highest value properties in the portfolio,
in particular the commercial properties located in Hong Kong.
We read a sample of the valuation reports covering the majority of
the Group’s investment property portfolio to consider whether the
valuation methodology used was appropriate in determining the
fair value. We performed testing, on a sample basis, of the input
data used in the valuations to satisfy ourselves of the accuracy of
the property information supplied to the valuers by management,
for example agreeing lease data to tenancy agreements and other
supporting documents.
We evaluated the key controls over the valuation of the investment
property portfolio, including the data used in the valuations.
With the support of our valuation experts, we attended meetings
with the valuers at which the valuations, methodology and key
assumptions used, and climate change risk considerations were
discussed. We compared the capitalisation rates used by the valuers
with an estimated range of expected rates, determined via reference
to published benchmarks and market information. We evaluated
the year-on-year movements in fair value with reference to publicly
available information and rentals with reference to prevailing
market conditions. We evaluated whether the capitalisation rates
and prevailing market rents used were appropriate in light of the
evidence provided by relevant recent transactions.
With the support of our valuation experts, we also questioned
the external valuers regarding the recent market transactions and
expected rental values used in their valuations and the extend to
which they took into account the impact of climate change and
related ESG considerations.
Based on the procedures performed, we found the key assumptions
used in the valuations were appropriate.
We also assessed the adequacy of the disclosures related to
investment properties and related fair value measurements in
the context of IFRS Accounting Standards. We are satisfied that
appropriate disclosure has been made.
Hongkong Land
80
Key Audit Matters continued
Key Audit Matter
How our audit addressed the Key Audit Matter
Recoverability of properties for sale held by
the Group and its joint ventures
Refer to Note 33 (Critical Accounting Estimates and Judgements),
Note 15 (Properties for sale) and Note 12 (Associates and joint
ventures) to the consolidated financial statements.
The carrying amount of the Group’s properties for sale amounted
to US$2,359.7 million at 31 December 2024. The Group also has
significant interest in properties for sale held by its joint ventures.
Management assessed the recoverability of the properties for sale
held by the Group and its joint ventures based on estimates of the
net realisable values of the underlying properties. The determination
of these net realisable values involved making estimates in respect
of: the expected selling prices of the properties based on prevailing
market conditions, such as current market prices for properties of
comparable location and condition; estimated costs necessary to
make the sales; and the estimated construction costs required to
complete the properties based on existing development plans,
where applicable.
Where the estimated net realisable value of the underlying properties
were determined to be below the carrying value due to changes in
market conditions and/or significant variations in the development
plans, write-down provisions were recorded during the year totalling
US$146.9 million attributable to subsidiaries and US$178.2 million
attributable to joint ventures.
We focused on the recoverability of properties for sale due to the
significant judgements and estimates involved in determining the
estimated net realisable values for certain properties as a result of
changes in market conditions.
We understood management’s controls and processes for
determining the net realisable value of properties for sale and
assessed the inherent risk of material misstatement by considering
the degree of estimation uncertainty and the judgement involved in
determining assumptions to be applied.
We understood key controls over cost budgeting and monitoring for
estimated costs to complete.
We evaluated management’s assessments of the recoverability
of properties for sale, and assessed the reasonableness of key
assumptions and estimates used.
We compared, on a sample basis, estimated selling prices
to the contracted selling prices of the underlying properties,
management-approved prices lists and/or latest market prices
of properties in comparable locations and condition.
We assessed the reasonableness of estimated costs necessary
to make the sales with reference to historical benchmarks and
market information.
We assessed the reasonableness of estimated costs to complete the
properties by agreeing the total costs to the latest approved budget
and tested, on a sample basis, the estimated construction costs to
committed contracts and other supporting information.
Based on the procedures performed, we found the key assumptions
applied in determining the net realisable values of the underlying
properties to be appropriate.
How We Tailored Our Group Audit Scope
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the consolidated financial statements
as a whole, taking into account the structure of the Group, the accounting processes and controls, and the industries in which the Group operates.
The Group’s accounting processes are structured around finance functions which are responsible for their own accounting records and controls,
which in turn report financial information to the Group’s finance function to enable it to prepare consolidated financial statements.
In establishing the overall approach to the Group audit, we determined the type of work that needed to be performed by members of the Group
engagement team or by component auditors from member firms within the PwC Network and other auditors operating under our instruction.
Where the work was performed by component auditors, we determined the level of involvement necessary for us to have in the audit work at those
components to be able to conclude whether sufficient, appropriate audit evidence had been obtained as a basis for our opinion on the financial
statements as a whole. The Group engagement team was involved in the significant reporting entities in scope for Group reporting during the
audit cycle through a combination of meetings, visits and conference calls. The engagement partner and other senior team members undertook
a number of visits to Shanghai and Chengdu during the year to direct and oversee the audit, along with regular communication through conference
calls and on site review of the work of component teams in those locations.
Full scope audits of the complete financial information was performed for 16 subsidiaries. These subsidiaries, together with procedures performed
on centralised functions and at the Group level (on the consolidation and other areas of significant judgement), accounted for 89% of the Group’s
revenue, 85% of the Group’s loss before tax, 75% of the Group’s underlying profit before tax and 79% of the Group’s net assets. Full scope audits of
the complete financial information were also performed for 14 joint ventures, which accounted for a further 13% of the Group’s loss before tax, 22%
of the Group’s underlying profit before tax and 16% of the Group’s net assets.
This gave us the evidence we needed for our opinion on the consolidated financial statements as a whole.
Annual Report 2024
81
Independent Auditor’s Report
Other Information
The Directors of the Company are responsible for the other information. The other information comprises all of the information included in
the annual report other than the consolidated financial statements and our auditor’s report thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that
fact. We have nothing to report in this regard.
Responsibilities of Directors and the Audit Committee for the Consolidated Financial Statements
As explained more fully in the Responsibility Statements and the Corporate Governance section in the Annual Report, the Directors of the Company
are responsible for the preparation of the consolidated financial statements that give a true and fair view in accordance with IFRS Accounting
Standards as issued by the IASB, and for such internal control as the Directors determine is necessary to enable the preparation of consolidated
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the Directors are responsible for assessing the Group’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to
liquidate the Group or to cease operations, or have no realistic alternative but to do so.
The Audit Committee assists the Directors in discharging their responsibilities for overseeing the Group’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level
of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit.
We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform
audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk
of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by
the Directors.
• Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained,
whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures
in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as
a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the
consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
units within the Group as a basis for forming an opinion on the consolidated financial statements. We are responsible for the direction,
supervision and review of the audit work performed for purpose of the group audit. We remain solely responsible for our audit opinion.
Hongkong Land
82
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements continued
We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the audit and significant audit
findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements regarding independence, and to
communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable,
actions taken to eliminate threats or safeguards applied.
From the matters communicated with the Audit Committee, we determine those matters that were of most significance in the audit of the
consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report
unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should
not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Use of this Report
This report, including the opinion, has been prepared for and only for the Company’s members as a body in accordance with Section 90 of the
Companies Act 1981 (Bermuda) and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other
purpose or to any other person to whom this report is shown or into whose hands it may come, including without limitation under any contractual
obligations of the Company, save where expressly agreed by our prior consent in writing.
The engagement partner on the audit resulting in this independent auditor’s report is Ng Ka Ho.
Other Matter
The Company is required by the United Kingdom Financial Conduct Authority Disclosure Guidance and Transparency Rule to include these
consolidated financial statements in an annual financial report prepared under the structured digital format required by DTR 4.1.15R – 4.1.18R
and filed on the National Storage Mechanism of the Financial Conduct Authority. This auditor’s report provides no assurance over whether the
structured digital format annual financial report has been prepared in accordance with those requirements.
PricewaterhouseCoopers
Certified Public Accountants
Hong Kong
7 March 2025
Annual Report 2024
83
Five Year Summary
2020
2021
2022
2023
2024
US$m
US$m
US$m
US$m
US$m
Profit/(loss) attributable to shareholders
(2,647)
(349)
203
(582)
(1,385)
Underlying profit attributable to shareholders
963
966
776
734
410
Investment properties
30,083
28,600
28,054
26,687
24,760
Net debt
4,568
5,104
5,817
5,371
5,088
Shareholders’ funds
35,709
34,584
33,303
31,965
29,940
US$
US$
US$
US$
US$
Net asset value per share
15.30
15.05
14.95
14.49
13.57
Underlying earnings/dividends
per share (US¢)
Net asset value per share (US$)
Dividends
Underlying earnings
2024
18.56
23.00
2020
2021
2022
2023
41.27
22.00
41.49
22.00
34.44
22.00
33.15
22.00
2024
13.57
2020
2021
2022
2023
15.30
15.05
14.95
14.49
Hongkong Land
84
Responsibility Statements
The Directors of the Company confirm that, to the best of their knowledge:
a. the consolidated financial statements prepared in accordance with International Financial Reporting Standards, including
International Accounting Standards and Interpretations as issued by the International Accounting Standards Board, give a
true and fair view of the assets, liabilities, financial position and profit or loss of the Group; and
b. the Chairman’s Statement, Chief Executive’s Review, Financial Review and the description of Principal Risks and Uncertainties
facing the Group as set out in this Annual Report, which constitute the management report required by the Disclosure
Guidance and Transparency Rule 4.1.8, include a fair review of all information required to be disclosed under Rules 4.1.8 to
4.1.11 of the Disclosure Guidance and Transparency Rules issued by the Financial Conduct Authority in the United Kingdom.
For and on behalf of the Board
Michael Smith
Craig Beattie
Directors
7 March 2025
Annual Report 2024
85
Corporate Governance
Overview of the Group’s Governance Approach
The Hongkong Land Group (Hongkong Land Holdings Limited (the Company) and its subsidiaries together known as the Group) understands
the value of good corporate governance in driving the long-term sustainable success of its business. It attaches importance to the corporate
stability that strong governance brings, and the opportunities that result from it being part of the Jardine Matheson Holdings Limited
(the Jardine Matheson) group.
The Group is committed to high standards of governance. The system of governance it has adopted has been developed, over many years, by the
members of the Jardine Matheson group, and both the Group and its stakeholders regard it as appropriate to the nature of its business and the
long-term strategy it pursues in its markets in Asia’s gateway cities. The Group’s governance framework is tailored to its size, ownership structure,
the complexity and breadth of its business. It enables the Group to benefit from Jardine Matheson’s professional expertise while at the same time
ensuring that the independence of the Board is respected and clear operational accountability rests with the Company’s executive management.
The Company also ensures that the Group continues to demonstrate the characteristics and values that have enabled the Group to prosper over
the long-term:
• A long-term perspective – the Group takes a long-term view in its decision-making and investments, drawing on the expertise and experience
of our directors, and does not focus on short-term profits. This leads to long-term, sustainable growth for our shareholders and benefits the
communities where we operate.
• Credibility, stability and trust – the credibility, stability and trust built up by the Group over many generations, are highly valued by our partners
and other stakeholders.
• Deep knowledge of our markets – the extensive experience and long track record of the Group have led to a deep understanding of how to drive
successful growth across our markets, giving the Group a competitive advantage.
The Group believes that its stakeholders gain significant value from the long-term approach it takes. It is also important, however, to adapt to
changing circumstances in our markets and, where appropriate, to the developing expectations of stakeholders and changes in best practice.
In this context, over the past year, the Group has strengthened the Company’s Board and leadership teams, bringing in expertise to support our
businesses in highly dynamic and competitive markets. In parallel, we have continued to enhance our approach to governance, to be more focused
and to drive better decision-making and results.
In order to ensure clear allocation of accountability, the strengthened leadership team is responsible for developing and executing the Group’s
business strategies and delivering on performance. The leadership team is directly accountable to the Board, which provides robust challenge,
support and guidance, bolstered by extensive industry-specific expertise and experience from independent non-executive directors (the INEDs).
INEDs with a broad and diverse range of backgrounds are a valuable source of external perspectives and are a key element of good governance and
decision-making. The Company has taken further steps over the past year to increase the independence and diversity of its Board.
During the year and subsequent to the end of the year under review, the Company underwent several changes in its governance. John Witt was
appointed as the Chairman, succeeding Ben Keswick, on 28 October 2024. On the same day, Christina Ong stepped down from the Board, and
Graham Baker and Adam Keswick also resigned as members of the Remuneration Committee and Nominations Committee respectively. The
Company appointed Ming Mei as an additional INED on 10 October 2024, and further appointed him as a member of the Investment Committee,
Remuneration Committee and Nominations Committee on 28 October 2024. On 5 March 2025, the Company further announced Stuart Grant will
resign from the Board and the Audit and Investment Committees at the Company’s upcoming AGM. Stuart Grant has been appointed executive
director & chief executive, Westbund Central with effect from 30 June 2025. As a result of these changes, as at 7 March 2025, the Board comprises
eight Directors, of whom 25% are considered INEDs, taking into account the independence considerations under the UK Corporate Governance
Code (the Code), and 12.5% are female.
Having an effective corporate governance framework supports the Board in delivering the Group’s strategy and fosters long-term sustainable
growth, and ensures it operates transparently and in accordance with the best practice.
Group Structure
Jardine Matheson is the ultimate holding company of the Group. The structural relationship between the Jardine Matheson group and the Group is
considered a key element of the Group’s success. By establishing common values and standards, and sharing experience, contacts and business
relationships, the Jardine Matheson group companies, including the Group, aim to optimise their opportunities across the Asian countries in which
they operate.
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86
Governance and Legal Framework
The Company is incorporated in Bermuda with most of its property interests held entirely in Asia. The primary listing of the Company’s
equity shares is in the Equity Shares (Transition) Category (the Transition Category) of the Main Market of the London Stock Exchange (LSE).
The Company also has secondary listings in Singapore and Bermuda. As the Company has only secondary listings on these exchanges, many
of the listing rules of such exchanges are not applicable. Instead, the Company must release the same information in Singapore and Bermuda
as it is required to release under the rules which apply to it as a result of being listed in the Transition Category on the LSE.
As a company incorporated in Bermuda, the Company is governed by:
• The Bermuda Companies Act 1981 (the Bermuda Companies Act);
• The Bermuda Hongkong Land Holdings Limited Consolidation and Amendment Act 1988 (as amended), pursuant to which the Company was
incorporated, and the Bermuda Hongkong Land Holdings Limited Regulations 1993 (as amended, the Regulations) were implemented; and
• The Company’s Memorandum of Association and Bye-Laws.
The Bermuda Takeover Code for the Company is set out in the Regulations and is based on the UK City Code on Takeovers and Mergers. It provides
an orderly framework within which takeover offers can be conducted and the interests of shareholders protected.
Other acquisition mechanisms available under the Bermuda Companies Act include schemes of arrangement and amalgamation and mergers. The
Bermuda Companies Act provides a framework within which such procedures can be conducted and the interests of shareholders protected.
The shareholders can amend the Company’s Bye-Laws by way of a special resolution at a general meeting of the Company. The Company will
modernise the provisions in the Bye-Laws and seek shareholders’ approval at the 2025 annual general meeting (AGM) for the adoption of the new
Bye-Laws.
The Company’s listing in the Transition Category of the LSE means that it is bound by many, but not all, of the same rules as companies which
fall within the Equity Shares (Commercial Companies) categories (the Commercial Companies Category) of the LSE, under the UK Listing Rules, the
Disclosure Guidance and Transparency Rules (DTRs) issued by the Financial Conduct Authority in the United Kingdom (FCA), the UK Market Abuse
Regulation (MAR) and the Prospectus Regulation Rules. This includes rules relating to continuous disclosure, periodic financial reporting, disclosure
of interests in shares, market abuse and the publication and content of prospectuses in connection with admission to trading or the offering of
securities to the public. In addition, the Company is subject to regulatory oversight from the FCA, as the Company’s principal securities regulator,
and is required to comply with the Admission and Disclosure Standards of the Main Market of the LSE.
The Company and its Directors are also subject to legislation and regulations in Singapore relating, among other things, to insider dealing.
When the shareholders approved the Company’s move to a standard listing from a premium listing in 2014, the Company stated that it intended to
maintain certain governance principles, which were applicable to it at that time by virtue of its UK premium listing. As a result, the Company
adopted a number of governance principles (the Governance Principles) based on the applicable requirements for a UK premium listing in 2014,
which went further than the standard listing requirements at the time.
Following the FCA’s recent reform of the UK listing regime, including the introduction of new UK Listing Rules which came into effect on 29 July
2024 (the UK Listing Rules), the replacement of the previous UK premium and standard segments of the Official List of the FCA with the Commercial
Companies Category and the transfer of the listing of the Company’s equity shares to the new Transition Category, the Company has undertaken a
review of the Governance Principles to ensure they remain appropriate and take into account market practice.
Following such review, the Board considers that certain amendments to the Governance Principles are appropriate to align more closely with,
and have regard to, the UK Listing Rules that other UK listed companies are subject to and to reflect the modernisation of the governance of the
Company. With immediate effect, the Company intends to have regard to the UK Listing Rules (as in effect on 29 July 2024) applicable to the
Commercial Companies Category, when applying the Governance Principles in relation to significant transactions and related party transactions.
This means that the key elements of the Governance Principles are now updated as follows:
• If the Company carries out a related party transaction which, if its shares were listed on the Commercial Companies Category would require a
sponsor to provide a fair and reasonable opinion under the provisions of the UK Listing Rules, it will engage an independent financial adviser to
confirm that the terms of the transaction are fair and reasonable as far as the shareholders of the Company are concerned.
• If the Company carries out such a related party transaction or a significant transaction (one that would be classified as a significant transaction
under the provisions of the UK Listing Rules), as soon as reasonably practical after the terms are agreed, the Company will issue an
announcement, providing such details of the transaction as are necessary for investors to evaluate the effect of the transaction on the Company.
• At each AGM, the Company will seek shareholders’ approval to issue new shares on a non-pre-emptive basis for up to 33%
of the Company’s issued share capital, of which new shares representing up to 5% of the Company’s issued share capital can be issued for
cash consideration.
• The Company adheres to a set of Securities Dealing Rules which follow the provisions of MAR with respect to market abuse and disclosure of
interests in shares.
The Company is not required to comply with the Code, which applies to all Commercial Companies Category issuers and sets out the governance
principles and provisions expected to be followed by companies subject to the Code. However, the Company does have regard to the Code in
developing and implementing its approach to corporate governance and disclosure.
Annual Report 2024
87
Corporate Governance
The Management of the Group
The Board
The Board is responsible for ensuring that the Group is appropriately managed and achieves its strategic objectives in a way that is supported by
the right culture, values and behaviours. The Group’s culture provides the foundation for the delivery of our strategy and our long-term, sustainable
success. Our workforce policies and practices are consistent with and support our culture. Periodic colleague surveys are conducted to assess the
culture and enable management to identify actions that could be taken to further improve our culture.
The Board is also responsible for ensuring that appropriate systems and controls are in place to enable efficient management and well-informed
decision-making. Our business processes incorporate efficient internal reporting, robust internal controls, and supervision of current and emerging
risk themes, all of which form a vital part of our governance framework. As a key part of this, the Company Secretary has set up processes and
systems to ensure that all Directors receive information in a timely, accurate and clear manner. We use a board paper distribution portal to
disseminate board and committee papers securely to Directors.
The Chairman facilitates discussions at Board meetings, by ensuring all Directors have an opportunity to make comments and ask questions.
In addition, the Chairman discusses matters with Directors individually and collectively outside of Board meetings. The Chairman also uses other
gatherings of the Directors, such as Board dinners, to facilitate discussions in a less formal environment.
The Board has full power to manage the Company’s business affairs, other than matters reserved to be exercised by the Company in the general
meeting under Bermuda legislation or the Company’s Bye-Laws. Key matters for which the Board is responsible include:
• The overall strategic aims and objectives of the Group;
• Establishing the Company’s purpose and values;
• Approval of the Group’s strategy and risk appetite to align with the Group’s purpose and values;
• Approval and oversight of the Group policy framework and approval of appropriate Group policies;
• Approval of the Annual Budget and monitoring of performance against it;
• Oversight of the Group’s activities;
• Approval of major changes to the Group’s corporate or capital structure;
• Approval of major capital expenditure and significant transactions in terms of size or reputational impact;
• Approval of interim and final financial statements, Annual Report and Accounts and interim management statements, upon recommendation
from the Audit Committee;
• Approval of dividend policy and the amount and form of interim and final dividend payments, for approval by shareholders as required;
• Ensuring relevant sustainability and environmental, social, and governance (the ESG) matters are incorporated into purpose, governance,
strategy, decision-making and risk management, and approving the annual Sustainability Report issued by the Group;
• Overseeing the management of risk within the Group;
• Any significant changes to the Company’s accounting policies or practices, upon recommendation from the Audit Committee;
• Appointment, re-appointment or removal of the external auditor, subject to shareholders’ approval, upon recommendation from
the Audit Committee;
• Approval of matters relating to the AGM resolutions and shareholder documentation;
• Approval of all shareholder circulars, prospectuses and listing particulars issued by the Company; and
• Approval of material public announcements concerning matters decided by the Board.
Responsibility for certain matters, including the approval of borrowing facilities and capital expenditure (other than major capital expenditure
required to be approved by the Board), has been delegated by the Board to the Investment Committee and the group finance director of the Jardine
Matheson group with specific written terms of reference outlining his role and authorities.
The Company sees the value of regularly reviewing the effectiveness of its processes and making improvements where appropriate.
Hongkong Land
88
The Board continued
Board activities
Set out below is a summary of the key areas of activity of the Board:
1. Strategy
To facilitate oversight and provide opportunities for the Board to challenge and measure progress against the Group’s strategic priorities, at each
Board meeting, the Chief Executive and Chief Financial Officer provide updates on the operational and financial performance of the Group.
2. Operational Performance
The Group operates in highly dynamic markets and constantly need to innovate and adapt to remain relevant and achieve long-term, sustainable
success. In the past years, Asia has seen a large influx of new capital, the rapid rise of new economy companies and changes in customer and
tenant expectations. In response, we have put innovation, operational excellence and an entrepreneurial spirit at the heart of everything we do.
At each Board meeting, an update is provided on the operational performance of each business segment, which offers important insights into the
opportunities and challenges faced. In addition, Directors are provided with a deeper understanding of how our varied markets function and the
implications for stakeholder-related issues in order to equip the Board with the necessary perspective to enhance strategic decision-making.
3. Supporting leadership teams and colleagues
The Group attaches great importance to attracting, developing and retaining leadership talent. We strive to develop leaders who are entrepreneurial
in how they develop their businesses.
The Group is focused on enhancing performance management structures to recognise, reward and retain talent, with incentives aligned to drive
shareholder value by building better, stronger businesses.
The Company is also committed to creating an inclusive workplace which reflects the diversity of the communities we serve.
The Board is provided with regular people updates to enable it to support talent attraction, development and retention, and the progress of
Inclusion, Equity and Diversity (the IE&D) and colleague engagement initiatives.
4. Financial performance and risk
The Board oversees the actions the Company takes to deliver superior, long-term returns for our shareholders from our market-leading businesses.
We aim for decisive management built on a disciplined, long-term approach to capital allocation and investment expertise, to maximise financial
performance, maintain our financial strength and manage risks. Over time, and in addition to be being part of the Jardine Matheson group of
businesses, we have developed deep relationships with a wide range of well-capitalised, leading banks and corporate partners, which support the
Group’s financial strength.
Our approach is underpinned by the Company always seeking to maintain a strong balance sheet and liquidity position. This has enabled the Group
to move with confidence in making some of our most substantial acquisitions at times of market dislocation.
The Chief Financial Officer presents a detailed overview of the financial performance of the Group at each Board meeting, to ensure that Directors
are provided with sufficient information to enable them to provide the appropriate financial oversight, and have the opportunity to challenge
management as appropriate. The information provided includes details of the financial performance of each business unit.
The Board also reviews the Group’s capital allocation approach, dividend policy and shareholder returns, as well as the management of Group debt
levels, interest cover and capital markets activities.
The Board has overall responsibility for risk management and is actively engaged in regular discussions about the principal risks faced by the
Group. The Audit Committee, on behalf of the Board, undertakes an annual assessment of the effectiveness of the management of the principal
risks facing by the Group and actions taken to mitigate them, validating the key risks and approving any necessary actions arising from the
risk assessments. This process takes into account the key risks faced, and the risk management approach taken, by the Group.
Maintaining and enhancing the risk and internal control environment is fundamental to the Group’s governance framework and the Board’s
stewardship of the Company.
Annual Report 2024
89
Corporate Governance
The Board continued
Board activities continued
5. Governance and stakeholder engagement
A range of governance matters are discussed at Board meetings, including Directors’ and officers’ insurance, litigation, regulatory changes, review
and approval of statutory reporting and shareholder documentation and governance-related matters.
The Chief Financial Officer provides Directors with regular updates on stakeholder engagements, including engagement with shareholders,
governments and other relevant third-parties, and relevant regulatory developments. Increasing the Directors’ understanding of stakeholder
views and priorities, and the actions being taken by the Group to address them, supports the Board’s decision-making.
Updates from the Chief Financial Officer provide the Board with feedback on investor views and expectations, visibility of market conditions, share
price performance, shareholder returns and the future outlook.
The Chief Financial Officer provides the Board with Sustainability updates twice a year, which include the progress being made by the Group in
progressing sustainability priorities including achieving climate action objectives, particularly in relation to decarbonisation, as well as updates on
responsible consumption and social inclusion initiatives.
The Committee Chairs provide updates on the activities of the Committees at the Board meeting following each Committee meeting.
Board Composition and Operational Management
The Board’s composition and the way it operates provide stability, allowing the Company to take a long-term view as it seeks to grow its business
and pursue investment opportunities.
The Chairman has been appointed in accordance with the provisions of the Bye-Laws of the Company, which provide that the chairman of Jardine
Matheson, or any Director nominated by him, shall be the Chairman of the Company.
The presence of Jardine Matheson representatives on the Company’s Board and its Committees of the Company, provides an added element
of stability to the Company’s financial planning and supervision, enhancing its ability to raise finance and take a long-term view of business
development. It also strengthens the ability of management to work effectively together in exploiting the full range of the Jardine Matheson
group’s commercial strengths.
As at 7 March 2025, the Company comprises eight Directors, two of whom (25%) – Lincoln K.K. Leong and Ming Mei are considered as independent
taking into account the relevant considerations under the Code. On 5 March 2025, the Company announced the appointment of Stuart Grant as
executive director & chief executive, Westbund Central, with effect from 30 June 2025. Stuart Grant will step down from the Company’s Board
(and the Audit and Investment Committees) at the Group’s AGM in May, before assuming his new role.
There were a number of Board changes during the year: Anthony Nightingale and Y.K. Pang retired from the Board on 31 January 2024 and
31 March 2024 respectively. Michael Smith succeeded Robert Wong as Chief Executive on 31 March 2024. On 10 October 2024, Ming Mei was
appointed as INED. John Witt was appointed as the Chairman, succeeded Ben Keswick on 28 October 2024. On the same day, Christina Ong
stepped down from the Board. There are detailed plans in place to ensure orderly succession for the Board. The names of all the Directors and
brief biographies appear on pages 22 and 23 of this Annual Report.
Hongkong Land
90
Board Composition and Operational Management continued
The Board has considered that there is a clear division of responsibilities among the Chairman and the Chief Executive to ensure an appropriate
balance of power and authority is maintained at all times.
Board composition as at 7 March 2025:
Property management
Property investment
Property development
Corporate governance, risk management and/or sustainability
Financial acumen
Strategy and business acumen
Executive leadership
International business
0
1
2
3
4
5
6
7
8
Directors’ experience
0
1
2
3
Executive Directors
Non-Executive Directors
Independent Non-Executive Directors
Capacity of Directors
4
2
2
50-59
60-69
40-49
Age of Directors
7
1
0
1
2
3
4
5
6
7
8
Over 10 years
5 years or below
Tenure of Directors
4
2
2
0
1
2
3
4
5
6
7
8
Singaporean
Canadian
British
Nationality of Directors
Annual Report 2024
91
Corporate Governance
Board Composition and Operational Management continued
The Board has considered the diversity of the Company’s Board and executive management in the context of the requirements under the UK Listing
Rules that UK listed companies should publish information on the gender and ethnic representation of their Board and executive management.
As at 31 December 2024, being the reference date for the purposes of 22.2.30R(1)(a) of the UK Listing Rules which require the disclosure of certain
diversity statistics, and as shown below:
• The Board met its target of having one Director from a minority ethnic background;
• The Company does not currently meet the target of the Board comprising at least 40% female directors, but will continue to take IE&D
considerations into account for future Board appointments; and
• The Board does not currently meet the target to have a female director occupying one of the senior Board positions (Chairman, Chief Executive
or Chief Financial Officer). The Directors who hold these roles were appointed following formal, rigorous and transparent nomination procedures
and are the most suitable and experienced individuals for their roles and the Group’s needs. The Board will continue to take IE&D considerations
into account for future appointments for these roles.
The Company did not meet the targets under the UK Listing Rules of the Board comprising at least 40% female directors, and having one of the
senior Board positions occupied by a female director, due to the significant change to the composition of the Board and executive management
which would be required to meet these requirements.
The Company will continue to take IE&D considerations into account with respect to future appointments of Directors and executive management
positions.
The table below, which follows the format and categories prescribed by the UK Listing Rules, illustrates the ethnic background and gender diversity
of the Board and executive management – which includes the Company Secretary, but excludes administrative or support staff – pursuant to
22.2.30R(2) of the UK Listing Rules, as at 31 December 2024, which is our chosen reference date in accordance with the UK Listing Rules.¹
As at 31 December 2024
Number of
Board members
Percentage of
the Board
Number of senior
positions on
the Board (Chairman,
Chief Executive
and Chief
Financial Officer)
Number in
executive
management
(including Company
Secretary)
Percentage of
executive
management
(including Company
Secretary)
Gender diversity
Men
7
87%
3
7
77%
Women
1
13%
–
2
23%
Not specified/prefer not to say
–
–
–
–
–
Ethnic diversity
White British or other White
(including minority-white groups)
5
63%
2
3
34%
Mixed/multiple Ethnic Groups
–
–
–
–
–
Asian/Asian British
3
37%
1
6
66%
Black/African/Caribbean/Black British
–
–
–
–
–
Other ethnic group
–
–
–
–
–
Not specified/prefer not to say
–
–
–
–
–
The Company has a Board Diversity Policy that guides appointments to the Board and its Committees. There is no separate Diversity Policy for the
Committees. IE&D considerations are, and will be, taken into account for these appointments where relevant.
1 Data relating to the gender and ethnic diversity of the Board and executive management was gathered by the Company Secretary via the collection of each
individual’s identification documents, which are held within the Company’s secure filing system.
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92
Chairman
The Chairman’s role is to lead the Board, ensuring its effectiveness while taking account of the interests of the Company’s various stakeholders and
promoting high standards of corporate governance.
The Chairman’s principal responsibilities are in the areas of strategy, external relationships, governance and people. The Chairman leads the Board
in overseeing the long-term strategic direction of the Group and approving its key business priorities. His key responsibilities also include:
• Leading, with the Chief Executive, the development of the culture and values of the Group;
• Supporting the development and maintenance of relationships with existing and new key business partners, governments and shareholders;
• Ensuring, together with the Chief Executive, an appropriate focus on attracting and retaining the right people and carrying out succession
planning for executive management positions;
• Creating a culture of openness and transparency at Board meetings;
• Building an effective Board supported by a strong governance framework;
• Leading the succession planning for the Chief Executive;
• Ensuring all Directors effectively contribute to discussions and feel comfortable in engaging in healthy debate and constructive challenge;
• Ensuring all Directors receive accurate, timely and clear information; and
• Promoting effective communication between Executive Directors and Non-Executive Directors, including INEDs.
Chief Executive
The responsibility for running the Group’s business and all the executive matters affecting the Group rests with the Chief Executive. The
implementation of the Group’s strategy is delegated to the Company’s executive management, with decision-making authority within designated
financial parameters delegated to the Investment Committee. In addition, the Chief Executive has day-to-day operational responsibility for:
• Effective management of the Company and its business;
• Leading the development of the Company’s strategic direction and implementing the strategy approved by the Board;
• Identifying and executing new business opportunities;
• Managing the Group’s risk profile and implementing and maintaining an effective framework of internal controls;
• Developing targets and goals for his executive team;
• Ensuring effective communication with shareholders and key stakeholders and regularly updating institutional investors on the business strategy
and performance;
• Providing regular operational updates to the Board on all matters of significance relating to the Group’s business or reputation;
• Overseeing the Group’s approach to capital allocation, business planning and performance;
• Overseeing sustainability strategy and execution;
• Ensuring, together with the Chairman, an appropriate focus on attracting and retaining the right people and carrying out succession planning for
executive management positions; and
• Fostering innovation and entrepreneurialism to support the growth of the Group’s business.
Non-Executive Directors
The Non-Executive Directors bring insight and relevant experience to the Board. They have responsibility for constructively challenging the
strategies proposed by the Executive Directors and scrutinising the performance of management in achieving agreed goals and objectives.
In addition, Non-Executive Directors work on individual initiatives as appropriate.
Board Meetings
The Board usually holds four scheduled meetings each year, and ad hoc meetings when appropriate to deal with urgent matters that arise between
scheduled meetings. Board meetings are usually held in different locations around the Group’s markets.
The Board receives high-quality, up-to-date information in advance of each meeting, which is provided to Directors via a secure online board
information portal. The Company reviews the information provided to the Board regularly to ensure that it remains relevant to the needs of the
Board in carrying out its duties.
The Directors of the Company, who are based outside Asia, visit the region regularly to review and discuss the Group’s business and inspect the
Group’s investment and development assets. The knowledge these Directors have of the Group’s affairs, as well as their experience of the wider
Group, provides significant value to the ongoing review by the Company of the Group’s performance and reinforces the Board oversight process.
Annual Report 2024
93
Corporate Governance
Board Attendance
Directors are expected to attend all Board meetings. The table below shows the attendance at the scheduled 2024 Board meetings:
Meetings
eligible to
attend
% Attended
Current Directors
Non-Executive Directors
Stuart Grant
4/4
100%
Lily Jencks
4/4
100%
Adam Keswick
4/4
100%
Lincoln K.K. Leong
4/4
100%
Ming Mei 1
1/1
100%
Executive Directors
John Witt
4/4
100%
Michael Smith 2
3/3
100%
Craig Beattie
4/4
100%
Former Directors
Ben Keswick 3
3/3
100%
Anthony Nightingale 4
–
–
Christina Ong 5
3/3
100%
Y.K. Pang 6
0/1
0%
Robert Wong 7
1/1
100%
1 Ming Mei joined the Board on 10 October 2024. In 2024, one Board meeting was held after 10 October 2024.
2 Michael Smith joined the Board on 1 April 2024. In 2024, three Board meetings were held after 1 April 2024.
3 Ben Keswick stepped down from the Board on 28 October 2024. In 2024, three Board meetings were held on or before 28 October 2024.
4 Anthony Nightingale stepped down from the Board on 1 January 2024. In 2024, no Board meeting was held on or before 1 January 2024.
5 Christina Ong stepped down from the Board on 28 October 2024. In 2024, three Board meetings were held on or before 28 October 2024.
6 Y.K. Pang stepped down from the Board on 31 March 2024. In 2024, one Board meeting was held on or before 31 March 2024.
7 Robert Wong stepped down from the Board on 1 April 2024. In 2024, one Board meeting was held on or before 31 April 2024.
Appointment and Retirement of Directors
There are detailed plans in place to ensure orderly succession for the Board. The Board is focused on development and succession plans at both
Board and executive level, to strengthen the management pipeline. The Chairman, in conjunction with other Directors, reviews the size, composition,
tenure and skills of the Board. The Chairman leads the process for new appointments, monitors Board succession planning, and considers
independence, diversity, inclusion and Group governance matters, as well as relevant expertise and experience, when recommending appointments
to the Board. Non-Executive Directors are appointed on merit, against objective criteria and are initially appointed for a three-year term.
Prior to appointment, the Chairman assesses the commitments of a proposed candidate, including other directorships, to ensure they have
sufficient time to devote to the role. The Chairman also regularly assesses the time commitments of Directors, to ensure that they each continue to
have sufficient time for their role. He also considers the potential additional time required in the event of urgent corporate events. Any Director’s
external appointments, which may affect existing time commitments relevant to the Board, must be agreed with the Chairman in advance.
Upon appointment, all new Directors receive a comprehensive induction programme over several months. This is designed to facilitate their
understanding of the business and is tailored to their individual needs. The Chief Financial Officer and the Company Secretary are responsible for
providing a briefing covering the Company’s core purpose and values, strategy, key areas of the business and corporate governance.
The Board appoints each new Director, and the Nominations Committee has been established to assist the Board in such matters. In accordance
with the Company’s Bye-Laws, each new Director is subject to retirement and re-election at the first AGM after their appointment. Directors are
then subject to retirement by rotation requirements under the Bye-Laws, whereby one-third of the Directors retire at the AGM each year. These
provisions apply to both Executive Directors and Non-Executive Directors, but the requirement to retire by rotation does not extend to the Chairman
of the Company.
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Appointment and Retirement of Directors continued
The Company has determined that it is appropriate for the Chairman to be exempted from the retirement by rotation requirements. An important
part of the Group’s strong governance is corporate stability, which is provided by the stewardship over the long-term of the business by family,
as well as related and like-minded shareholders, who hold a significant proportion of the shares of the Company. The Group believes that its
stakeholders gain significant value from the long-standing governance approach the Group has taken.
In accordance with Bye-Law 85, Stuart Grant and Lincoln K.K. Leong will retire by rotation at this year’s AGM and, with respect to Lincoln K.K. Leong,
will offer himself for re-election. Stuart Grant will not offer himself for re-election in light of the announcement of his appointment as executive
director & chief executive, Westbund Central, which takes effect on 30 June 2025. In accordance with Bye-Law 92, Ming Mei will also retire and,
being eligible, offer himself for re-election. None of the Directors proposed for re-election have a service contract with the Company or its subsidiaries.
Company Secretary
All Directors have access to advice and support from the Company Secretary, who is responsible for advising the Board on all governance matters.
Insurance and Indemnification
The Company purchases insurance to cover its Directors against their costs in defending themselves in civil proceedings taken against them
in that capacity, as well as in respect of damages resulting from the unsuccessful defence of any proceedings. To the extent permitted by
applicable law, every Director shall be indemnified and secured harmless out of the assets of the Company against all liability and loss suffered
and expenses reasonably incurred. However, neither insurance nor indemnity arrangements provide cover where the Director has acted
fraudulently or dishonestly.
Delegations of Authority
The Group has in place an organisational structure with defined lines of responsibility and appropriate delegations of authority in place.
The Group’s delegation of authority framework establishes a clear pathway for decision-making. This ensures that judgements are made at the
correct business level by those team members most equipped to do so. Every decision made aligns with the Group’s culture and values, taking
into account the advantages, risks, financial consequences, and effects on all stakeholders. The Board, supported by the Audit Committee, places
significant emphasis on maintaining high governance standards throughout the Group. This focus assists the Board in accomplishing its strategic
goals and fulfilling key performance objectives.
Directors’ Responsibilities in respect of the Financial Statements
Under the Bermuda Companies Act, the Directors are required to prepare financial statements for each financial year and present them annually
to the Company’s shareholders at the AGM. The financial statements are required to present fairly, in accordance with International Financial
Reporting Standards (IFRS), the financial position of the Group at the end of the year, and the results of its operations and its cash flows for the
year then ended. The Directors consider that applicable accounting policies under IFRS, applied on a consistent basis and supported by prudent
and reasonable judgements and estimates, have been followed in preparing the financial statements. The financial statements have been prepared
on a going concern basis.
Substantial Shareholders
As a non-UK issuer, the Company is subject to the provisions of the DTRs, which require that a person must, in certain circumstances, notify the
Company of the percentage of voting rights attaching to the share capital of the Company that person holds. The obligation to notify arises if
that person acquires or disposes of shares in the Company and that results in the percentage of voting rights which the person holds reaching,
exceeding, or falling below, 5%, 10%, 15%, 20%, 25%, 30%, 50% and 75%.
The Company has been informed of the holding of voting rights of 5% or more attaching to the Company’s issued ordinary share capital by Jardine
Strategic Limited (the Jardine Strategic), which is directly interested in 1,176,616,646 ordinary shares carrying 53.32% of the voting rights. By virtue
of its interest in Jardine Strategic, Jardine Matheson is also interested in the same ordinary shares. Apart from this shareholding, the Company is
not aware of any holders of voting rights of 5% or more attaching to the Company’s issued ordinary share capital as of 7 March 2025.
There were no contracts of significance with substantial corporate shareholders during the year under review.
Annual Report 2024
95
Corporate Governance
Related Party Transactions
Details of transactions with related parties entered into by the Company during the course of the year are included in Note 27 to the financial
statements on pages 58 and 59.
Engagement with Shareholders, Other Stakeholders and Colleagues
We engage regularly with our stakeholders, including our employees, investors, creditors, partners and government and this enables the Company
to understand their perspectives and ensure we address their expectations and shape our actions accordingly.
Shareholders and Investors
The Board and executive management team recognise communications with shareholders and investors to be an important component of
the Group’s commitment to strong corporate governance. The Group proactively engages with the investment community through a number
of channels to articulate its business and sustainability strategies, provide updates on its progress towards key objectives, and to collect the
community’s views and feedback, as follows:
• The Chief Executive and Chief Financial Officer are made available to address queries at the Group’s interim and annual results presentations,
followed by interactions during roadshows or post results discussions with major shareholders and investors;
• The Chief Financial Officer provides business updates to the analyst community prior to the start of black-out periods ahead of interim and
annual results announcements;
• The Chief Executive, Chief Financial Officer, and/or the Investor Relations team regularly meet with major shareholders, bondholders and
potential investors – there were 100 interactions during the year;
• The publication of annual reports, results announcements and presentations, interim management statements and press releases;
• The publication of the Group’s Sustainability Framework 2030 & Climate Action report, as well as its annual Sustainability Performance report;
• The publication of business, sustainability and other general updates via social media platforms; and
• The Group’s AGMs.
Other Stakeholders
The Group frequently engages with stakeholder groups outside of the investment community, focusing primarily collaborations on sustainability-
related issues and initiatives. The Group’s engagement with stakeholders is guided by its Sustainability Framework 2030 (https://webfile.hkland.
com/assets/sustainability-report/2024/en/Sustainabilityframework_2030.pdf), which was developed via consultations with stakeholders to help the
Group prioritise material topics.
These engagements, which are attended or sponsored by executive management, primarily include:
• Ongoing dialogue with environmental Non-Governmental Organisations (the NGOs), financial institutions, other landlords, and government
agencies on risks from rising sea levels;
• Collaborating with other landlords via an Alliance on the sourcing and trialling of PropTech solutions to drive energy efficiency for
commercial buildings;
• Engaging and collaborating with tenants via the Group’s Tenant Sustainability Partnership Programme to share best practices on green tenant
fit-outs and operations, as well as corporate social responsibility initiatives;
• Regular communications with contractors and other developers to learn and share best practices on refining building designs and optimising the
use of carbon intensive building materials;
• Engaging with tenants to raise awareness and best practices on IE&D initiatives;
• Collaborating with NGOs to deliver charitable initiatives via economic contributions, community investments, and volunteering;
• Attending real estate sector and sustainability conferences, seminars, workshops, and events, including contributing to discussions on emerging
sustainability issues; and
• Engaging our colleagues via employee engagement surveys and sustainability materiality assessments.
Shareholders and other stakeholders may send their enquiries and concerns by e-mail at gpobox@hkland.com.
Securities Purchase Arrangements
The Directors have the power, under the Bermuda Companies Act and the Company’s Memorandum of Association, to purchase the Company’s
shares. Any shares so purchased are required to be treated as cancelled and, therefore, reduce the Company’s issued share capital. The Board
regularly considers the possibility of share repurchases. When doing so, it considers the potential for enhancing earnings or asset values per share.
When purchasing such shares, the Company is subject to the provisions of MAR.
The Company did not repurchase its shares during the year.
Hongkong Land
96
Workforce Engagement
The Group has a performance management mechanism designed to foster a more objective and focused approach that rewards high performers,
boosts personal development, and creates a culture of performance across the organisation. This mechanism embeds our core values and cascades
objectives from the Group’s strategy down to individual goals. Appraisal reviews are conducted annually, with added flexibility through check-in
sessions and ‘agile dialogue’ to ensure continuous conversations take place throughout the year.
To complement this, the Group is committed to supporting the growth of the next generation of leaders within our businesses, ensuring colleagues
can develop the skills they need to thrive. A thorough talent review process identifies high-potential employees for our talent pool, who are primed
to ascend the leadership ladder and step into senior roles in the future. Through meaningful conversations, we discuss their ambitions and draft
custom development plans to align their personal growth with the Company’s objectives.
We also aim to cultivate an owner mindset among our employees, supported by enhanced incentive structures that focus less on short-term profits
and more on long-term value creation. This approach encourages experimentation, innovation, and sustainable growth.
By embedding these practices, we aim to create a more inclusive, transparent, and performance-driven culture that empowers employees to
achieve their full potential while contributing to the Group’s long-term success.
Annual General Meeting
The Company’s 2025 AGM will be held on 2 May 2025. The full text of the resolutions and explanatory notes in respect of the meeting are contained
in the Notice of AGM that is published at the same time as this Annual Report and can be found at www.hkland.com/en/investors/announcements.
Corporate Website
A corporate website is maintained containing a wide range of additional information of interest to investors at www.hkland.com.
Group Policies
Code of Conduct
The Group conducts business in a professional, ethical and even-handed manner. Its ethical standards are clearly set out in its Code of Conduct,
a set of guidelines to which every employee must adhere and which is reinforced and monitored by a regular training and compliance certification
process. It also modelled on the Jardine Matheson group’s code of conduct. The Code of Conduct requires that all Group companies and employees
comply with all laws of general application, all rules and regulations that are industry-specific and proper standards of business conduct. In addition,
the Code of Conduct prohibits the giving or receiving of illicit payments. It requires that all Directors and employees must be fully aware of their
obligations under the Code of Conduct and establish procedures to ensure compliance at all levels within their businesses. The Group required each
employee to declare any potential conflicts of interest, whether personal or related to their families and friends to ensure employees always act in
the best interests of the Group while performing their duties.
The Company’s policy on commercial conduct underpins internal control processes, particularly in the area of compliance. The policy is also set out
in the Group’s Code of Conduct.
Data Privacy
The Group is committed to being a responsible custodian of the data entrusted to it by customers, employees, business partners and other
stakeholders keeping the data secure and processing it in accordance with legal requirements and stakeholder expectations as they continue to
evolve. Appropriate protections are in place to prevent misuse and unauthorised disclosure of personal data. In addition, the Group’s Code of
Conduct and Data Breach Notification Policy underlines the Group’s commitment to being a responsible data custodian.
Whistleblowing Policy
The Group has a whistleblowing policy covering how employees can report matters of serious concern. The Audit Committee is responsible for
overseeing the effectiveness of the formal procedures for colleagues to raise such matters and is required to review any reports made under those
procedures referred to it by the internal audit function.
In addition, the Group has a whistleblowing service managed by an independent third-party service provider, which supplement existing
whistleblowing channels to assist employees and third-parties in raising matters of concern and report cases of suspected illegal or unethical
behaviour. This service, which aims to help foster an inclusive, safe and respectful workplace, is available 24 hours a day in multiple local languages
and is accessible through several channel. Colleagues may make anonymous submissions in situations where it is inappropriate or not possible to
report a matter of concern to a manager supervisor, People & Culture, Executive Directors, Legal representative or the Chief Financial Officer.
Reports may be lodged by one of three channels: email, website or telephone hotline. Each report is allocated a unique case number which enables
follow-up with the reporter, if applicable. Once a report is lodged, it is sent to certain authorised persons at the Group level. These include senior
representatives from legal, compliance and finance teams who have experience in dealing with such matters. The authorised persons will follow up
on the report and investigate where necessary. The reporter, if they choose to, will be notified of the outcome.
All reports are treated confidentially and any retaliation against a person reporting a potential breach of the Code of Conduct in good faith will not
be tolerated.
Annual Report 2024
97
Corporate Governance
Inclusion, Equity and Diversity
We understand that our greatest asset is our people. Their diverse talent, experiences, and backgrounds drive our growth. We are committed to
fostering an environment that values every individual, ensuring every voice contributes to our collective success.
The Group applies the principle that colleagues should always treat others in a way they would expect others to treat them. Bullying, intimidation,
discrimination, and harassment of others have no place in the Group and will not be tolerated.
As a multinational Group with a broad range of businesses operating across Asia, the Group believes in promoting equal opportunities in recruiting
and developing all employees, regardless of ethnicity, gender, age, sexual orientation, disability, background or religion, should be treated fairly
and with dignity, and be valued for the contributions they make in their role. The scale and breadth of the Group’s business necessitate that they
seek the best people from the communities in which they operate most suited to their needs.
All staff are encouraged and supported to develop their full potential and contribute to the sustainable growth of the Group. Employees views and
ideas are essential, and they are encouraged to express them respectfully with colleagues at all levels within the organisation.
To build an inclusive workplace which helps progress our ambitions across the Group, we incorporate IE&D principles across our businesses and
People and Culture practices. This includes:
• Ongoing collaboration to ensure a set of inclusive working arrangements and policies to support IE&D;
• Keeping our recruitment, promotion, and retention systems fair and based on aptitude, merit and ability, including ongoing reviews of
remuneration to ensure appropriateness of pay levels;
• Active talent management and career support for our talent pools to provide equitable opportunities that will enable a diverse future pipeline
of leaders; and
• Cultivating the right set of leadership behaviours through learning campaigns to ensure our people behave in a way consistent with the
principles we have put in place.
The Company keeps the composition of its Board and executive management positions under review to ensure that it remains appropriate to face
the challenges of the changing business landscape. The Company is actively focused on increasing gender diversity at all levels of the organisation.
The Group has a Diversity and Equal Opportunity Policy.
Committees
The Board is supported by the activities of its Committees (the Nominations, Remuneration, Investment and Audit Committees), which ensure the
right level of attention and consideration are given to specific matters. Matters considered by each of the Committees are set out in their respective
terms of reference. Copies of these documents can be obtained from the Company’s website at www.hkland.com.
Nominations Committee
The Board established a Nominations Committee in March 2021. The key responsibilities of the Nominations Committee are to:
• Review the structure, size and composition of the Board and its Committees and make recommendations to the Chairman of the Board on any
appointments to maintain a right balance of skills, knowledge and experience and independence, as well as a diversity of perspectives;
• Support the Chairman of the Board to lead the process for Board appointments and nominate suitable candidates to the Board;
• Assess suitable candidates based on merit and objective criteria (giving consideration to the promotion of the diversity of social and ethnic
backgrounds, knowledge, experience and skills), taking into account their ability to meet the required time commitments;
• Oversee the development of succession pipelines for both the Board and executive management positions to ensure talent is identified and
nurtured to meet the challenges and opportunities facing the Group; and
• Satisfy itself that any skill gaps are addressed in the reviews of Board composition and that appropriate development opportunities are in place
for Directors to keep abreast of market knowledge and industry trends to perform their role effectively.
The Nominations Committee consists of a minimum of three members, selected by the Chairman of the Board. The Chairman of the Board is
the Chair of the Nominations Committee. The current members of the Nominations Committee are John Witt, Ming Mei and Raymond Co (the
group head of people & culture of the Jardine Matheson group). The Nominations Committee meets at least annually, or by the circulation of
Committee circulars and recommendations to the Board for approval as it deems appropriate. It plays a key role in the process of recruiting Board
members and executive management. Candidates for appointment as Executive Directors of the Company or other executive management
positions may be sourced internally or externally, including by using the services of specialist executive search or recruitment firms. The aim is to
appoint individuals who combine international business knowledge and experience, industry knowledge and experience, if possible, and familiarity
with, or adaptability to, Asian markets. When appointing Non-Executive Directors, the Nominations Committee pays particular attention to the
Asian business experience and relationships that they can bring.
Hongkong Land
98
Remuneration Committee Report
Chair’s Introduction
Following my appointment as Chair of the Remuneration Committee in October 2024, I am delighted to introduce the Remuneration Committee’s
Report for the year ended 31 December 2024. The Report sets out how remuneration has operated across the Group in 2024, how the Group intends
to operate its remuneration framework in the year ahead, and the Group’s overall approach to incentives.
The primary objective of the Group’s remuneration approach is to align remuneration with performance and to create a high-performance culture
for the Group.
The Remuneration Committee is focused on reshaping the Group’s remuneration framework to align with this approach and, during the year, we
undertook a review of the different elements of the framework.
To reinforce a performance-driven culture, we are reshaping our performance management system, which allows us to differentiate performance
among our employees better and to reward the best performers. These changes will create a clear correlation between performance levels and
rewards. The Group’s salary management system has also been revamped to incorporate market remuneration data, which will enhance decision-
making for employees’ salary increases.
We recognise the importance of incentives and rewards in aligning employees with the creation of value for the Group and the delivery of strong
total shareholder returns. We are therefore re-designing the Group’s short-term and long-term rewards framework to better align with the Group’s
compensation philosophy and its revised strategy.
For short-term reward, we aim to drive day-to-day strategy execution through a target-based bonus plan. The employee bonus payout ratio is now
based on a combination of group-level financial performance and individual performance.
For long-term reward, a new long-term incentive plan (LTIP) will be created to incentivise a focus on long-term returns for the business. Directors
and selected key talents will be awarded shares under the LTIP, and payouts will be subject to the satisfaction of challenging performance
measures. We also have an Executive Director Shareholding Policy, requiring all Executive Directors and executive management with profit
and loss responsibility to accumulate and hold shares in the Company to align the interests of Executive Directors, executive management and
shareholders.
Details of the Remuneration Committee’s key responsibilities and the Group’s remuneration approach are set out in below sections. The full terms
of reference are available on the Company’s website at www.hkland.com.
John Witt
Chair of the Remuneration Committee
Remuneration Committee
The Board has overall responsibility for setting remuneration across the Group, ensuring it is appropriate and supports the Group’s strategy,
creating value for stakeholders. The Remuneration Committee has been established to assist the Board in these remuneration matters.
The Board has established the Remuneration Committee in March 2022. The role of the Remuneration Committee is governed by its terms of
reference. The key responsibilities of the Remuneration Committee are to:
• Oversee the formulation of a Group-wide reward strategy and ensure the business implements the reward strategy in alignment with its
industry-specific needs;
• Review and approve the Company’s overall rewards strategy and remuneration framework;
• Review the terms of and design of performance-related incentives (both short- and long-term), including the review and approval of any changes
to plan design, targets and metrics;
• Review and approve the overall compensation costs, including salary and bonus budgets, of the business; and
• Remain abreast of trends and developments in executive management’s compensation and corporate governance as they relate to the Group’s
industry and countries of operation.
The Remuneration Committee consists of a minimum of three members, selected by the Chairman of the Board. The Chairman of the Board is
the Chair of the Remuneration Committee. The current members of the Remuneration Committee are John Witt, Ming Mei and Raymond Co (the
group head of people & culture of the Jardine Matheson group). The Chief Executive and the Executive Director and Chief of People & Culture
Officer will generally attend meetings of the Remuneration Committee. The Remuneration Committee shall meet at least twice a year and as
required, or by circulation of Committee circulars which make recommendations to the Board for approval as it deems appropriate.
Annual Report 2024
99
Corporate Governance
Remuneration Committee Report continued
The Group’s Remuneration Philosophy and Framework for Rewarding Staff
The remuneration outcomes in 2024 reflect the intended operation of the remuneration framework.
The Company aims to ensure that its remuneration system is designed in a manner that is aligned with the values and strategic priorities of the
Company. The Company’s remuneration framework serves to attract, motivate and retain colleagues at all levels, while aligning the interests of
executives and shareholders and taking account of stakeholder expectations, as appropriate. The Company’s rewards approach is to reward all
individuals competitively, fairly and free from gender, race, ethnicity, age, disability and other non-performance-related considerations.
It does this through:
• Incentives based on financial measures and strategic objectives that reflect key goals critical to long-term sustainable organisational success;
• Consideration of business and operational risk, as well as sustainability development goals through the design of performance objectives;
• Incentives and policies which align the interests of executives to those of shareholders;
• Best-practice governance and ensuring remuneration outcomes are reasonable, taking into account community and stakeholder expectations; and
• Remuneration levels and outcomes appropriately reflect the challenge and complexity of being a multinational Asian-based property group with
diverse property business.
The Company’s policy is to offer competitive remuneration packages to its employees. The Company relies on a reward framework that provides
varying levels of remuneration and benefits depending on employee level. The remuneration packages are designed to reflect the nature of the
Group and its diverse geographic base.
Accordingly, the remuneration mix for employees varies depending on level. At executive management levels, more remuneration is ‘at risk’
depending on performance levels against goals. At more junior levels, more remuneration is directed toward fixed remuneration. The Company
strives to provide an appropriate amount of remuneration ‘at risk’ for the achievement of goals – whether those are short- or long-term in nature.
How Remuneration Framework is Linked to the Business Strategy
The Group’s remuneration strategy is designed to support and reinforce its business and sustainability strategies, both short- and long-term.
The ‘at risk’ components of remuneration are tied to measures that reflect the successful execution of these strategies in both the short- and
long-term. So, the Group’s actual performance directly affects what executives are paid.
Directors’ Remuneration
Shareholders decide in general meetings the Directors’ fees which are payable to all Directors other than the Chief Executive and the Chief Financial
Officer, as provided for by the Company’s Bye-Laws.
The remuneration of the Company’s Non-Executive Directors is not linked to performance. This is consistent with Non-Executive Directors being
responsible for objective and independent oversight of the Group. The total amount provided to all Directors (exclusing the salaried Executive
Directors of the Company who are not entitled to such fees) must not exceed the sum agreed by shareholders at a general meeting. The maximum
aggregate remuneration of US$1.5 million per annum was approved by shareholders at the 2022 AGM, and this total sum will be kept under review
over time. Executive Directors are paid a basic fixed salary as well as discretionary annual incentive bonuses and receive certain employee benefits
from the Group. Non-Executive Directors do not receive bonuses or any other incentive payments or retirement benefits.
The level of fees paid to the Company’s Non-Executive Directors is kept under regular review. Fees are benchmarked against a peer group of similar
companies and a report is reviewed by the Board every two years.
Hongkong Land
100
Remuneration Committee Report continued
Directors’ Remuneration continued
The Non-Executive Directors are reimbursed for expenses properly incurred in performing their duties as a Director of the Company. The schedule
of fees paid to Directors in respect of the financial year 2024 is set out in the table below. Fees are annual fees, unless otherwise stated:
US$ (per annum)
Chairman fee:
110,000
Base Director fee:
100,000
Audit Committee fee (Chair):
45,000
Audit Committee fee (member):
35,000
Remuneration Committee fee (Chair):
25,000
Remuneration Committee fee (member):
20,000
Nominations Committee fee:
15,000
Investment Committee fee (Chair):
45,000
Investment Committee fee (member):
35,000
Director
Director Fee
US$
Audit
Committee
Fee
US$
Nominations
Committee
Fee
US$
Remuneration
Committee
Fee
US$
Investment
Committee
Fee
US$
Total Fees
US$
Current Directors
1
John Witt (Chairman) 1
110,000
–
15,000
4,440
7,992
137,432*
2
Michael Smith 2
–
–
–
–
–
–
3
Craig Beattie
–
–
–
–
–
–
4
Stuart Grant
100,000
35,000
–
–
6,216
141,216
5
Lily Jencks
100,000
–
–
–
–
100,000
6
Adam Keswick1
100,000
–
12,336
–
–
112,336*
7
Lincoln K.K. Leong
100,000
45,000
–
–
–
145,000
8
Ming Mei 3
22,678
–
2,664
3,552
6,216
35,110
Former Directors
9
Ben Keswick 1
90,464
–
12,336
–
–
102,800*
10
Anthony Nightingale 4
8,470
–
–
–
–
8,470
11
Christina Ong 1
82,240
–
–
–
–
82,240
11
Y.K. Pang 5
24,863
8,702
–
–
–
33,565*
12
Robert Wong 2
–
–
–
–
–
–
Total
738,715
88,702
42,336
7,992
20,424
898,169
* Fees surrendered to Jardine Matheson
1 John Witt was appointed as Chairman of the Board, succeeded Ben Keswick with effect from 28 October 2024. On the same day, John Witt was also
appointed as the chair of the Nominations and Remuneration Committees, Christina Ong stepped down from the Board and Adam Keswick stepped down
as a member of Nominations Committee.
2 Michael Smith was appointed to the Board of the Company and succeeded Robert Wong, with effect from 1 April 2024.
3 Ming Mei was appointed to the Board of the Company with effect from 10 October 2024 and was appointed as a member of the Investment, Remuneration
and Nominations Committees with effect from 28 October 2024.
4 Anthony Nightingale retired from the Board of the Company with effect from 31 January 2024.
5 Y.K. Pang retired from the Board of the Company and the Audit Committee with effect from 31 March 2024.
Annual Report 2024 101
Corporate Governance
Remuneration Committee Report continued
Remuneration Outcomes in 2024
For the year ended 31 December 2024, the Directors received from the Group US$9.2 million (2023: US$7.6 million) in Directors’ fees and employee
benefits, being:
2024
2023
Directors’ fees
US$0.9 million
US$1.1 million
Short-term employee benefits including salary, bonuses, accommodation, deemed benefits in kind and
shares-based incentives
US$8.1 million
US$6.1 million
Post-employment benefits
US$0.2 million
US$0.4 million
The information set out in the section above headed ‘Remuneration Outcomes in 2024’ forms part of the audited financial statements.
Directors’ Share Interests
The Directors of the Company in office on 7 March 2025 had interests* as set out below in the ordinary share capital of the Company. These
interests include those notified to the Company regarding the Directors’ closely associated persons*.
Craig Beattie
134,400
Lily Jencks
79,300
Lincoln K.K. Leong
456,818
Ming Mei
5,800,000
* Within the meaning of MAR
In addition, Craig Beattie held share options regarding 120,000 ordinary shares issued pursuant to the Company’s notional share option plan.
Michael Smith received a conditional award of 1,784,500 ordinary shares in the Company during 2024, as an incentive to join the Group.
These shares will vest in equal installments over five years between 2025 and 2029, subject to continued employment on the date each vesting
period ends.
Executive Directors Shareholding Policy
The Company believes that it is essential to align the interests of shareholders and Executive Directors. This means creating an environment where
the Executive Directors are incentivised to create long-term shareholder value. The Company has sought to do this in part by requiring all Executive
Directors to accumulate and hold shares in the Company for the long-term.
In this regard, the Company has adopted an Executive Directors’ Shareholding Policy (the Shareholding Policy). The Shareholding Policy requires
that each of the Executive Directors should build a meaningful and increasing shareholding in the Company over time.
The Shareholding Policy sets a minimum shareholding requirement. For the Chief Executive, the value is four times his annual basic salary. For
Executive Directors and executive management with profit and loss responsibility and the Chief Financial Officer, the minimum requirement is
to hold shares in the Company with a value of two times their annual basic salary, while other are functional executive directors, the value is one
time their annual basic salary. Executive Directors are permitted five years from the commencement of the Shareholding Policy to accumulate the
required level of shareholding.
Share Schemes
The Company has in place a notional share option plan under which cash bonuses are paid based on the performance of the Company’s share price
over a period. The notional plan was established to provide longer-term incentives for Executive Directors and senior managers. Notional share
options are granted after consultation between the Chairman and the Chief Executive as well as other Directors as they consider appropriate.
Notional share options are not granted to Non-Executive Directors. The plan is now inactive, and no further options will be granted under the plan.
In February 2025, the Company introduced a new long-term incentive programme that will provide shares to nominated participants. The goal
of this programme is to encourage executive management within the Group to drive towards the Company’s strategic objectives and align their
contribution with the interests of shareholders, as decided by the Remuneration Committee.
Hongkong Land
102
Investment Committee Report
Chair’s Introduction
I am pleased to present the Investment Committee’s report for the year ended 31 December 2024. The report outlines the work of the Committee
since its establishment in October 2024 and provides context for the decisions taken.
The Investment Committee was formed to replace the Group’s existing finance committee, which was originally established by the Group’s
management company. The Committee enables the executive team to operate with flexibility while adequate attention is still given by the Board
to significant strategic investment, financing and treasury decisions.
The primary objective of the Committee is to improve the Group’s decision-making agility by advising, evaluating, approving and/or making
recommendations to the Board on the Group’s strategic transactions, in accordance with authority limits delegated by the Board. The transactions
covered by the Committee’s remit include investments and disposals, capital expenditure, lease commitments, and material changes to associate
and joint venture relationships.
The Board has also delegated its authority to the group finance director of Jardine Matheson group to review certain finance-related transactions in
accordance with authority limits, including loan facilities, derivative transactions, treasury policies and authority thresholds for the Group.
During the year, the Committee reviewed certain matters and made recommendations to the Board, strictly following the Group’s investment
principles. These transactions included the asset enhancement initiatives for the Group’s key retail assets in Central.
Details of the Committee’s key responsibilities are set out in below section.
John Witt
Chair of the Investment Committee
Investment Committee
The Board established an Investment Committee in October 2024. The key responsibilities of the Investment Committee are to:
• Review and approve transactions or arrangements proposed to be entered into or undertaken by members of the Group in accordance with the
limits of authority, including investments and disposals, capital expenditure, lease commitments, material changes to associate and joint venture
relationships; and
• Evaluate and recommend to the Board protocols for new markets and funding models that the Group is seeking to establish, including the
decision to enter into a new gateway city or any third-party capital such as new REITs or private fund vehicles.
The Investment Committee consists of three members, selected by the Chairman of the Board. The Chairman of the Board is the chair of the Investment
Committee. The current members of the Investment Committee are John Witt, Stuart Grant and Ming Mei. The Investment Committee meets monthly,
or by the circulation of Committee circulars, and makes recommendations to the Board for approval for matters outside of its delegated authority.
Annual Report 2024 103
Corporate Governance
Audit Committee Report
Chair’s Introduction
I am pleased to present the Audit Committee’s report for the year ended 31 December 2024. As part of Hongkong Land’s evolving governance
framework, the Audit Committee convened three times in 2024, with an additional meeting held in November. This extra session was dedicated to
providing early insights into potential issues that could affect the full-year results.
This year, the Audit Committee has focused heavily on the challenging property market conditions on the Chinese mainland. We have closely
monitored the assessment of value of various property categories, including investment properties, own-use properties, build-to-sell properties,
medium term properties, and MCL Land properties.
We have examined key accounting issues and management judgements to ensure the continued accuracy and integrity of the Company’s financial
reporting. We have also held discussions with the Company’s external auditor, PwC, on the financial statements and have met with PwC without
managements presence. More details are included in Note 33 to the financial statements on pages 76 to 77.
The Audit Committee has also overseen the Company’s non-financial reporting framework, ensuring it evolves in line with environmental,
social, and governance responsibilities. We receive regular updates from management and from the Jardine Matheson group’s audit and risk
management function (GARM) on the broader control environment, including financial reporting controls, and we review the progress of
addressing any identified deficiencies with insights from GARM and PwC.
The Audit Committee reviewed and monitored the Company’s principal risks through a combination of business reviews, focused engagements,
and regular updates from management, GARM, and PwC. As the Group announced a new business strategy in October 2024, which focuses on
ultra-premium integrated commercial properties in Asia’s gateway cities, the Group’s Enterprise Risk Management framework is being updated
to align with its new strategic goals. Key risks that could impact the Group’s achieving its goals have been identified together with the associated
risk response. Read more on pages 109 to 114.
The Audit Committee’s role is to oversee the effectiveness of the Company’s financial reporting, including ESG and climate-related financial disclosures,
internal control systems, and risk management processes. We also ensure the integrity of the Company’s external and internal audit procedures.
Details of the Audit Committee’s key responsibilities are set out in below sections. The full terms of reference are available on the Company’s
website at www.hkland.com.
Lincoln K.K. Leong
Chair of the Audit Committee
Audit Committee
The Board has established an Audit Committee in March 2022. The Audit Committee consists of a minimum of three members and its current
members are Graham Baker (Financial Expert), Lincoln K.K. Leong (chair of the Audit Committee and INED) and Stuart Grant (Non-Executive
Director). None of the members is directly involved in operational management of the Company as at 7 March 2025. The chair of the Audit
Committee is independent. All Audit Committee members have a deep understanding of risk management. Lincoln K.K. Leong is an independent
member and he and Graham Baker have recent financial experience and expertise.
The Chief Executive and Chief Financial Officer, together with representatives of the internal and external auditors, also attend the Audit Committee
meetings by invitation. Other individuals may attend part of a meeting for specific agenda items as appropriate. The Committee meets on a
scheduled basis three times a year (the number of annual meetings was increased from two to three in 2024 as part of the Group’s focus on
improving its governance approach further and strengthening the oversight of the Committee).
The role of the Audit Committee is governed by its terms of reference. The Audit Committee’s remit includes:
• Independent oversight and assessment of financial reporting processes, including related internal controls;
• Independent oversight of risk management and compliance;
• Independent oversight and responsibility for cybersecurity;
• Monitoring and reviewing the effectiveness of the internal audit function and the Group’s external auditor;
• Considering the independence and objectivity of the external auditor; and
• Reviewing and approving the level and nature of non-audit work performed by the external auditor.
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Audit Committee continued
Before completion and announcement of the Company’s half-year and full-year results, a review is undertaken by the Committee, with the executive
management, of the Company’s financial information and any issues raised in connection with the preparation of the results, including the adoption
of new accounting policies. A report is also received by the Committee from the external auditor. The external auditor also have access, when
necessary, to the full Board and other executive managements. The Committee confirms, to the best of its knowledge, the consolidated financial
statements prepared in accordance with IFRS, including International Accounting Standards and Interpretations as issued by the International
Accounting Standards Board, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group.
The matters considered by the Audit Committee during 2024 included:
• Reviewing the 2023 annual financial statements, 2024 half-year financial statements and interim management statements, with particular focus
on the assets impairment assessments, net realisable assessments for properties for sale, assumptions that underpinned key valuation models
and effectiveness of financial controls;
• Reviewing the significant actions and judgements of management in relation to changes in accounting policies and practices to ensure clarity
and accuracy of disclosures and compliance with new accounting standards;
• Receiving reports from internal audit function on the status of the control and compliance environment of the Group, with particular focus on the
mechanisms supporting financial reporting, and its business divisions, and progress made in resolving matters identified in the reports;
• Reviewing the principal risks, evolving trends and emerging risks that affect the Group, and monitoring changes to the risk profile, as well as the
effectiveness of risk management measures and crisis management arrangements;
• Receiving updates on the cybersecurity threat landscape and the Group’s cybersecurity environment, risk management approach, training,
priorities and control effectiveness;
• Receiving reports from risk management and legal functions on key legal matters and compliance and code of conduct issues, and the actions
taken in addressing those issues and strengthening controls;
• Reviewing the annual internal audit plan and status updates;
• Reviewing the Group’s governance approach to cybersecurity management, data security and privacy management across its businesses;
• Reviewing the independence, audit scope and fees of PwC, and recommending their re-appointment as the external auditor at AGM; and
• Conducting a review of the terms of reference of the Audit Committee.
Audit Committees Attendance
The table below shows the attendance at the scheduled 2024 Audit Committee meetings:
Members of the Audit Committee
Meeting eligible
to attend
% Attendance
Current members
Lincoln K.K. Leong (Chair)
3/3
100%
Stuart Grant
3/3
100%
Graham Baker
3/3
100%
Former member
Y.K. Pang 1
1/1
100%
1 Y.K. Pang stepped down as a member on 31 March 2024.
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Auditor Independence and Effectiveness
The independence and objectivity of the Group’s external auditor are safeguarded by control measures including:
• Reviewing the nature of non-audit services (including the amendment of the non-audit services policy);
• The external auditor’s own internal processes to approve requests for non-audit work to the external audit work;
• Monitoring changes in legislation related to auditor independence and objectivity;
• The rotation of the lead audit partner after seven years;
• Independent reporting lines from the external auditor to the Audit Committee and providing an opportunity for the external auditor to have
in-camera sessions with the Audit Committee;
• Restrictions on the employment by the group of certain employees of the external auditor;
• Providing a confidential helpline that employees can use to report any concerns; and
• An annual review by the Audit Committee of the policy to ensure the objectivity and independence of the external auditor.
The Board’s annual review in 2024 of the external auditor’s independence and effectiveness found that they performed their duties effectively.
The Board found the level of professional scepticism, the number and regularity of meetings with the Audit Committee, feedback from the Audit
Committee members and internal stakeholders and the levels of technical skills and experience to be effective.
At each AGM of the Company, the Company is required to appoint an external auditor to hold office until the conclusion of the next AGM.
The Company’s shareholders approved the appointment of PwC Hong Kong as the Company’s external auditor at the AGM on 8 May 2024.
Risk Management and Internal Control
The Board has overall responsibility for the Group’s systems of risk management and internal control. It is supported by the Audit Committee which
is responsible for providing oversight of the Group’s risk management activities.
The Audit Committee considers the Group’s principal risks and uncertainties, as well as emerging risks that it may face. It also ensures that
executive management maintains robust risk management systems to safeguard the interests of the Group and its stakeholders. In addition, it
reviews the effectiveness of the design and operation of the Group’s systems of internal control (financial, operational and compliance) and the
practices that it adopts to mitigate the Group’s risks. The Audit Committee reports to the Board three times a year.
GARM assists the Audit Committee with fulfilling its assurance and reporting roles. GARM adheres to international professional practice standards
for internal auditing. To safeguard its independence of Management and objectivity, GARM reports functionally to the Audit Committee and has full
and unrestricted access to all Group business functions, records, locations and personnel. It also monitors the approach taken by Management to
risk and reports its findings and recommendations for any corrective action required to the Audit Committee.
The Group’s internal control systems are designed to manage, rather than eliminate, business risk, to help safeguard its assets against fraud and
other irregularities and to give reasonable, but not absolute, assurance regarding material financial misstatement or loss.
Executive management is responsible for implementing the systems of internal control throughout the Group.
The Group has an established risk management process that covers all business units within the Group. This process includes the maintenance
of risk registers that detail the Group’s existing and emerging risks to the achievement of their strategies as well as relevant key controls and
mitigating actions to address them. The Group’s risk management process and risk registers are reviewed regularly by executive management.
The Group operates a ‘three lines of defence’ risk governance framework which defines clear responsibilities and the structure for ensuring
accountability for and transparency regarding its risk management practices. This framework combines a top-down strategic view of risk with a
bottom-up operational perspective. The Board, through the top-down approach, has oversight of the risk management process and focuses on
determining the nature and extent of significant risks that it is willing to take in achieving the strategic objectives of the Group.
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Integrated Risk Management Approach
Third line of defence
First line of defence
Second line of defence
Internal audit serves as an objective
assurance function, independently
evaluating the effectiveness of
the Group’s risk management and
internal control processes
Business units take ownership of
managing operational risks directly,
implementing necessary mitigations
and internal controls
The internal risk and control teams aid
the Risk Management Council in
coordinating risk management efforts,
ensuring integration of risk management
practices throughout the Group’s operations.
They oversee and challenge the Group’s
risk identification, assessment, management
and monitoring
A top-down, bottom-up approach
Operational Risk Management
• Review external environment
• Robust assessment of principal risks
• Set risk parameters
• Execute strategic actions
• Report on key risks
• Identify principal and emerging risks
• Direct delivery of strategic actions in
line with risk parameters
• Monitor key risks
• Assess effectiveness of risk
management process and internal
control systems
• Report on principal and emerging risks
• Report on current and emerging risks
• Identify, evaluate and mitigate
operational risks
• Consider completeness of
identified risks and adequacy of
mitigating actions
• Consider aggregation of risk exposures
across the business
Strategic Risk Management
Executive Management/Risk Management Committee
Embedding three lines of defence
Business Units
Board/Audit Committee
Executive management and the Risk Management Council (comprising senior executives from all key business functions, chaired by the Chief
Executive Officer) are accountable for the effective management and reporting of principal risks across the business. They also ensure the
effectiveness of the Group’s internal control environment. The internal risk and control teams support the Risk Management Council in coordinating
the Group’s risk management activities and embedding risk management and monitoring internal controls across the Group’s operations.
Significant and emerging risks are reported to the Audit Committee at each meeting.
At the operational level, the day-to-day management of risk is embedded within the business units and is integral to the way the Group conducts
business. This bottom-up approach ensures that potential risks are identified at an early stage and escalated appropriately. Ownership of
operational risks resides within each business unit, with risks being managed at source and appropriate mitigations (including internal controls)
being put in place. The business units report on risks, which are maintained in a detailed risk register, to the Risk Management Council.
Through this approach, the Group’s ‘three lines of defence’ model for risk management comprises of operational management forming the first
line, executive management and the Risk Management Council forming the second line and internal audit forming the third line.
The Company’s principal risks and uncertainties are set out on pages 109 to 114.
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Risk Management Framework
Risk management is integrated into the Group’s and each business unit’s strategic planning, budgeting, decision-making and operations. Central to
this is the continuous and systematic application of a risk management process, as shown below:
Risk
Identification
Risk
Treatment
Risk Reporting
and Monitoring
Risk
Assessment
A Risk Management Framework, based on ISO 31000 and COSO principles, has been established and embedded into the Group’s business activities
to enable it to identify and assess key risks and define the strategies to be adopted in treating, monitoring and reporting on such risks. The risk
registers prepared by each business unit provide the basis for an aggregation process, which summarises the principal risks and uncertainties
facing the Group as a whole.
The key elements of the Risk Management framework are as follows:
Risk Identification
• Identifying and documenting the Group’s exposure to risks relating to the achievement of its strategic objectives,
categorised with reference to a risk taxonomy
• Adopting structured and methodical techniques for identifying critical risks
Risk Assessment
• Evaluating risks by estimating the likelihood of their arising, their potential financial and reputational impact, and
the speed at which they may materialise, at both the inherent and residual levels
• Determining the relative significance of each risk using a risk heatmap, with four levels of residual risk
Risk Treatment
• Tolerate – accepting the risk if it is within the Group’s risk appetite
• Terminate – disposing of or avoiding the risk if there is no appetite to accept it
• Risks may be accepted if mitigated to an appropriate level via:
• Transfer – insuring against the risk or sharing it through contractual arrangements with business partners
• Treat – redesigning controls or establishing new controls to address the risk, and monitoring the performance of
these controls
Risk Reporting and
Monitoring
• Periodically reviewing principal risks and uncertainties
• Monitoring the adequacy and effectiveness of risk management activity and internal controls through regular review
• Regular reporting of principal risks and uncertainties by the business units to the Board via the Audit Committee
and GARM
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Principal Risks and Uncertainties
The following are the principal risks and uncertainties facing the Company as required to be disclosed pursuant to the DTRs issued by the FCA and
are in addition to the matters referred to in the Chairman’s Statement, Chief Executive’s Review and other parts of this Annual Report.
As the risks and uncertainties described below have been newly defined and categorised for inclusion in this Annual Report for the first time,
following the Group’s implementation of its new strategy and operating model, no analysis regarding the relative significance of each risk and
uncertainty, compared to the prior year, is provided.
Risk Relating to Execution of Strategy
Under the Group’s new strategy, it will reallocate part of its financial and human resources from its current focus on build-to-sell to the
development and management of integrated properties in the ultra-premium sector in Asia’s gateway cities. The successfulness in executing this
strategy relies on taking certain business transformations that are necessary for the strategy’s implementation.
This transition will involve changes to the experience and skills that the Group requires for its management and third-party relationships as well as
to its organisational model, possibly leading to temporary operational disruption or inefficiency. This could result in quality and safety standards,
and hence reputation and brand, being compromised.
Furthermore, the Group’s new strategy, including an increase in its AUM from US$40 billion to US$100 billion by 2035, focused on achieving
ambitious goals, which may affect the Group in making the right investment decisions. Any difference in judging the market, responding
to competitive trends and demonstrating agility in certain conditions could also lead to the Group not being able to execute the new
strategy effectively.
Mitigation Measures
• Maintain strong leadership support to champion the strategy and address any challenges that may arise.
• Implement a comprehensive plan that outlines the potential obstacles to a successful reorganisation as well as the critical steps, resources and
timeframe necessary to achieve it.
• Ensure adequate resources (financial, manpower and technological) are allocated to support the execution of the new strategies.
• Engage all relevant stakeholders early in the transition process to obtain their buy-in and support, and communicate the strategy to employees
to ensure their alignment with its goals.
• Establish a robust monitoring and feedback system to track progress in the execution of the strategy, identify issues early and make necessary
adjustments.
Economic Risk
Uncertainties in global and regional economies and financial markets, involving volatility in interest and exchange rates, excessive inflation,
deflation or recession, can adversely affect the pricing and demand for the Group’s properties. Such developments might increase the Group’s
operating and financing costs or reduce its occupancy rates and revenues, as well as its access to credit. This would affect the valuations for the
Group’s investment properties and profitability. At the same time, these developments could also impact on the performance of the Group’s joint
venture partners, associates, bankers, suppliers and other third parties to support it.
In addition, geopolitical instability in jurisdictions in which the Group’s properties are located could lead to unfavourable market sentiment, posing
a threat to its business activity and affecting strategic aspirations for growth and returns on investment. For instance, political tensions, which
could result in greater protectionism, sanctions, nationalisation or expropriation, may bring impact to the global geopolitical situation outside its
own markets and affect worldwide sentiment.
Mitigation Measures
• Monitor the volatile macroeconomic environment and consider economic factors in strategic and financial planning.
• Make agile adjustments to existing business plans, where appropriate, and explore new business streams and markets.
• Review pricing strategies on a regular basis.
• Conduct stress testing in relation to various economic scenarios, such as inflation or interest rate changes, to understand their potential impacts
and to prepare measures to address them.
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Principal Risks and Uncertainties continued
Risks from Customers’ Changing Requirements and Market Competition
Customer preferences can shift due to evolving lifestyle trends, technological advancement and economic developments, necessitating continuous
adaptation by the Group in order to maintain and enhance its business performance. For instance, Hong Kong’s position as a leading financial
centre and luxury shopping destination may be eroded over time, leading to reduced demand for premium integrated properties, whilst over
supply and changes in consumption pattern on the Chinese mainland could affect demand for high-end property. Other trends that could impact
demand include preferences for decentralised office space, co-working environments, remote working and digital retailing.
If competitors are able to anticipate, understand and respond to these developments more effectively than the Group, particularly in new gateway
markets, it may experience difficulty in gaining market share or lose current market share. This would result in the Group suffering a decline in
financial performance and not achieving its strategic objectives for rapid growth.
Mitigation Measures
• Undertake continual upgrades and improvements to maintain the competitiveness of the Group’s portfolio.
• Maintain ongoing engagement with government authorities, local communities and public organisations.
• Enhance tenants’ experience through the provision of value-added services such as concierge and lounges.
• Foster a sense of community by organising networking events, workshops and social activities.
• Establish a customer relationship management programme and digital offering capabilities.
• Adopt best practices with respect to sustainability and transition to net zero, including executing on green building initiatives and collaborating
with our tenants to achieve sustainability goals.
Investment Management Risk
To support its new strategy of recycling capital from existing lower-performing assets to investments in ultra-premium projects, the Group will
need to modify its investment management lifecycle. For instance, revised approaches to the appraisal of potential investments in or for the
development of ultra-premium integrated properties may be required, especially in less familiar markets. Similarly, new practices for exiting from
current investments, including updated pricing and timing for their sale, is required in implementing the divestment process. The new investment
management lifecycle should co-ordinate investment and divestment activities so that the objectives can be achieved. Any difficulties in executing
these activities could result in the Group having a sub-optimal mix of property investments or geographic concentration that does not achieve the
business transformation and growth objectives of its strategy.
Mitigation Measures
• Conduct sufficient research, due diligence and evaluation of investment opportunities.
• Maintain transparent and consistent communication with all stakeholders, including employees, investors and customers, regarding
divestment decisions, to manage their expectations and address any concerns that they have.
• Develop a clear framework and levels of authority for investment decisions.
• Perform regular monitoring of performance, as well as strategic reviews, of new businesses and projects.
• Carry out continuous review of the implementation of the strategic plan.
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Principal Risks and Uncertainties continued
Financial Strength and Reporting
If the Group is not able to carry out its new strategy of capital recycling at sufficient speed or with adequate returns to fund growth in new areas,
its profitability may be negatively affected, as certain existing revenue streams may decline before new ones can be fully established. The Group’s
new strategy also seeks to bring in third-party capital to support growth. However, it may not be able to develop effective relationships with
providers of third-party capital, which may adversely affect the Group’s access to such capital. Any over-reliance on third-party capital under
this strategy could also create financial strain, if market conditions deteriorate and the Group cannot generate sufficient returns to meet its debt
obligations. These factors may eventually lead to liquidity issues and a loss of investor confidence or lower credit rating.
The Group also has exposure to market and credit risk which can also adversely impact its financial strength and funding capabilities. Its market
risk includes fluctuations in foreign currencies, interest rates and the pricing of equities and debt, that could all negatively affect the value of its
assets and liabilities, as well as its profitability. The Group’s credit risk is primarily attributable to deposits held with banks, debt investments and
exposure to tenants.
In addition, the Group faces the risk that its external financial reporting does not meet relevant regulatory requirements, possibly leading to fines
or penalties as well as reputational damage or loss of investor confidence. This risk could increase as these requirements evolve and become more
stringent over time, making it more challenging for the Group to ensure the integrity and timeliness of its financial reporting.
Mitigation Measures
• Conduct sufficient research and detailed cashflow forecasting to evaluate potential opportunities.
• Perform strategic reviews of the market situation and monitor exposure to changes in liquidity.
• Manage the Group’s exposure to fluctuations in foreign exchange, interest rates and counterparty risk.
• Maintain adequate buffers in committed facilities to enable the Group to pursue new investment opportunities and to provide protection
against market uncertainty.
• Maintain an appropriate balance between equity and debt, and between short- and long-term facilities, to provide flexibility for developing
the business.
• Not undertaking speculative transactions unrelated to the Group’s underlying financial exposure.
• Making ongoing developments to financial systems and controls, to ensure the integrity of financial information.
• Conducting regular internal audits of compliance with financial policies and internal controls over financial reporting.
People and Culture Risk
Ensuring that the Group has the right management talent, equipped with leadership skills and specialist expertise, is critical in enabling it to
execute its new strategy effectively and to implement the required changes to its organisational model. Therefore, any significant failure to attract,
retain and develop such talent could undermine this strategy as well as the Group’s operational and financial performance. The transition required
under the new strategy involves a potential reallocation and reskilling of resources to new roles, with these processes involving additional time
and costs.
The Group also faces talent shortages in certain areas, including retail management and sustainability, for which there is high market demand. If
the Group is not able to hire key talent or carry out reskilling of existing personnel in these specialisms, it may not be able to execute related
initiatives successfully, undermining its operational performance and growth.
Mitigation Measures
• Active communication with employees to develop their understanding of the Group’s new strategic direction.
• Enhance the Group’s performance management system to reinforce its high performance culture.
• Conduct proactive manpower and succession planning.
• Enhance the Group’s modern employer branding by implementing a talent development plan that includes training to up-skill staff as well as
appropriate compensation and benefits.
• Implement a strategy to promote IE&D across the Group.
• Develop an employee retention programme.
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Principal Risks and Uncertainties continued
Health and Safety Risk
The Group faces health and safety risk in terms of the possible impact of such issues as accidents, security incidents or hygiene-related matters on
its tenants. In addition, the Group’s business activities include construction and renovation, hence it faces the risk of fatalities or serious injuries
taking place if working conditions are unsafe or workers do not adhere to its safety procedures. If the Group fails to prevent, avoid and detect
safety-related issues, even where its relevant operations are managed by third party service providers, its brand could be damaged and the trust
that its tenants have in the Group eroded, especially given its focus on the luxury sector. These issues would ultimately undermine the Group’s
financial performance and shareholder value.
Mitigation Measures
• Ensure that all structural elements, electrical systems and plumbing in the Group’s buildings are regularly inspected and maintained.
• Provide tenants with clear instructions and guidelines on emergency procedures and safety protocols.
• Establish a safety leadership culture and framework in all markets.
• Conduct regular safety training for all employees and subcontractors.
• Conduct proper contractor selection and evaluation, and incorporate site safety requirements in tenders and contracts.
• Establish a contractor safety incentive scheme.
• Conduct active monitoring of site safety through the Digital Work and Smart Site Supervision Systems.
• Establish a Group Safety Accident Investigation Committee to raise work safety awareness at construction sites. Conduct regular safety audits
of operating buildings and construction sites to ensure the Group’s guidelines, requirements and local regulations for safety are adhered to by
both employees, vendors and contractors.
• Conduct periodic drills and tests of crisis response procedures established for safety incidents.
• Ensure that adequate insurance coverage, including employee compensation and construction all risks, is adequate and effective.
Environmental and Climate Risk
Environmental and climate-related risks are growing in significance, as shown by the increasing frequency and intensity of potentially damaging
natural events and disasters, such as typhoons, storms and floods. These pose growing physical threats to the Group’s properties and other
assets, which could lead to safety-related issues and disruption to operations and supply chains in the future. In addition, sea level rises could
adversely impact asset values and business continuity. As a result, the Group may face higher costs for implementing measures to reduce the
impact of climate-related events, including physical defences and insurance. Failure on the part of the Group to manage environmental and
climate risk could lead to it incurring even greater costs of recovery from climate-related events, negatively affecting its financial performance,
reputation and hence ability to achieve its long-term strategic objectives.
Market pressure, from shareholders, customers, lenders, rating agencies, etc., for improving sustainability performance is also increasing. In
addition, the Group has committed to certain officially published targets, including in relation to decarbonisation. It therefore faces a growing
challenge in driving sustainability initiatives and delivering on sustainability performance, increasing the risk of negative media exposure or
reputational damage arising if it does not meet compliance standards or other expectations. Any failure on the part of the Group to improve the
quality of its reporting on climate and other sustainability-related performance, to meet these requirements, could also lead to reputational issues
for the Group.
Mitigation Measures
• Implement measures to achieve the Group’s targets and commitments to decarbonisation under the Science-Based Targets initiative.
• Update climate risk assessments and action plans for climate adaptation based on the recommendations of the Task Force on Climate-related
Financial Disclosures, including implementing measures to address physical risks posed by climate change and identifying opportunities in the
global transition to a low-carbon economy.
• Perform ongoing retrofitting of existing assets and deploy emerging PropTech solutions to drive energy efficiency.
• Increase the procurement of renewable energy, including expanding capacity for onsite renewable energy generation, to reduce carbon emissions.
• Continue implementing the Group’s robust and long-standing green building certification programme to minimise the environmental impact of
existing assets.
• Assess emerging sustainability reporting standards and requirements, and align the Group’s disclosures with market best practice.
• Engage and collaborate with industry peers and government authorities on climate-related issues with the aim of establishing a task force
aimed at addressing the risk of rising sea levels in Hong Kong.
• Enhance operations and emergency preparedness to mitigate and minimise the impact of climate-related risks.
• Maintain a Property Damage and Business Interruption insurance policy with adequate coverage, to mitigate the potential financial impact on
the Group of catastrophic events.
• Make ongoing developments to systems and controls for the collection, aggregation and reporting of sustainability-related data, as well as
conduct external and internal assurance reviews of the Group’s sustainability reporting and governance.
• Communicate in a transparent manner the Group’s efforts to enhance its performance in sustainability to its stakeholders.
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Principal Risks and Uncertainties continued
Technology and Cybersecurity Risk
The Group is increasingly reliant on technology, exposing it to greater cybersecurity and privacy-related risk. Cyberattacks are becoming more
frequent and sophisticated globally, posing significant threats to the Group’s digital infrastructure and information technology systems. The use
of digital platforms also heightens the Group’s vulnerability to cyber threats. Further, disruptive technologies, such as Generative AI, introduce
new types of risk, such as advanced phishing and deepfake attacks. Cyber risk is further accentuated by the Group’s exposure to breaches in
cybersecurity taking place at its business partners, third parties and customers, through any Group systems that are connected with those of
such counterparties.
Cyberattacks may also stem from a lack of cybersecurity awareness on the part of employees, resulting in human error that cybercriminals can
exploit, disrupting critical equipment and facilities used by the Group in daily operations.
If a cyberattack takes place at the Group or at its partners, third parties or customers, it may face the costs of having to recover systems, lost
revenue, brand damage or regulatory action and penalties.
Mitigation Measures
• Define a cybersecurity programme and establish a centralised function to provide oversight and management of cybersecurity matters and to
strengthen cyber defences and security measures.
• Engage external consultants to perform assessments of the Group’s business functions against industry benchmarks.
• Perform regular vulnerability assessments, penetration testing and internal audits to identify weaknesses.
• Maintain disaster recovery plans and backup for data restoration.
• Arrange regular security awareness training for all employees and phishing testing to raise their cybersecurity awareness.
• Maintain sufficient cyber-related insurance to protect the Group’s financial position from the impacts of cyberattacks.
Legal, Regulatory and Compliance Risk
The Group is continuously subject to new or changing regulations in the jurisdictions in which it operates, as well as to those with cross-
jurisdictional impact, covering such matters as tax (e.g. stamp duty), employment, cybersecurity, data privacy, home ownership, capital
remittances, sustainability (e.g. carbon pricing, building standards, safety, etc.) and reporting requirements. The complexity created by this
regulatory environment leads to a risk that the Group inadvertently breaches its compliance obligations. As the Group embarks on its shift towards
new ‘gateway’ cities in Asia, this risk is increased as it may not initially have sufficient internal understanding of regulations in each target
jurisdiction.
If a robust approach to compliance is not maintained, the Group may face claims, lawsuits, investigations, fines and sanctions being imposed by
regulatory authorities or negative media exposure, adversely affecting its operations, reputation and profitability.
Mitigation Measures
• Stay up to date on new and draft regulations in all jurisdictions in which the Group operates.
• Engage external consultants and legal experts to assess the implications of prospective or new regulations, where necessary.
• Implement a mandatory code of conduct that applies to all business functions and employees across the Group.
• Maintain a robust Corporate Governance Framework which includes a whistleblowing channel.
• Maintain an independent internal audit function that reports directly to the Group’s Audit Committee on risk management, control environment
and significant non-compliance matters.
• Maintain a Crime insurance policy with adequate coverage.
• Engage with government bodies, regulators and industry associations, including participating in consultations on proposed policy and
regulatory changes.
• Provide regular compliance training to employees to ensure that they understand the importance of compliance.
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Principal Risks and Uncertainties continued
Risks from Partnerships and Other Third-Party Relationships
The effectiveness of the Group’s relationships with joint venture partners and in strategic alliances with other companies, government authorities,
etc., will affect its performance. These relationships create opportunities for growth, improving operational efficiency and promoting innovation.
However, they also introduce risks that could lead to vicarious responsibility for the actions of these parties, causing reputational damage and
undermining shareholder value. These risks could stem from these parties’ operations or their non-compliance with regulatory requirements that
they face. Also, disputes with such parties may arise, as a result of differences in corporate culture, priorities, management approaches and risk
appetite between the Group and such parties. Furthermore, any over-reliance on certain third-parties may expose the Group to poor performance
outcomes, such as delays in delivery, low service quality or data security issues.
These reputational and operational challenges could hinder the Group in achieving its strategic objectives for growth in profitability and scale.
Mitigation Measures
• Conduct thorough research, due diligence and evaluation of investment opportunities and potential business partners.
• Develop a clear framework and levels of authority for investment and partnership decisions.
• Conduct regular communication with partners and establish clear communication channels.
• Build up networks beyond local partners, such as with government authorities and the media.
Effectiveness Review of Risk Management and Internal Control Systems
The effectiveness of the Company’s risk management and internal control systems is monitored by the internal audit function, which reports
functionally to the Audit Committee. The internal audit function’s findings and recommendations for any corrective action required are reported to
the Audit Committee.
Hongkong Land
114
Shareholder Information
Financial Calendar
2024 full-year results announced
7 March 2025
Shares quoted ex-dividend
20 March 2025
Share registers closed
24 to 28 March 2025
Annual General Meeting to be held
2 May 2025
2024 final dividend payable
14 May 2025
2025 half-year results to be announced
29 July 2025*
Shares quoted ex-dividend
21 August 2025*
Share registers to be closed
25 to 29 August 2025*
2025 interim dividend payable
15 October 2025*
* Subject to change
Dividends
Shareholders will receive cash dividends in United States Dollars, except where elections are made for alternate currencies in the following
circumstances:
Shareholders on the Jersey Branch Register
Shareholders registered on the Jersey branch register can elect for their dividends to be paid in Pounds Sterling. These shareholders may make
new currency elections for the 2024 final dividend by notifying the United Kingdom transfer agent in writing by 25 April 2025. The Pounds Sterling
equivalent of dividends declared in United States Dollars will be calculated by reference to an exchange rate prevailing on 30 April 2025.
Shareholders holding their shares through the CREST system in the United Kingdom will receive cash dividends in Pounds Sterling only, as calculated
above.
Shareholders on the Singapore Branch Register who hold their shares through The Central Depository (Pte) Limited
(CDP)
Shareholders who are enrolled in CDP’s Direct Crediting Service (DCS)
Those shareholders who are enrolled in CDP’s DCS will receive their cash dividends in Singapore Dollars, unless they opt out of CDP Currency
Conversion Service, through CDP, to receive United States Dollars.
Shareholders who are not enrolled in CDP’s DCS
Those shareholders who are not enrolled in CDP’s DCS will receive their cash dividends in United States Dollars unless they elect, through CDP,
to receive Singapore Dollars.
Registrars and Transfer Agent
Shareholders should address all correspondence with regard to their shareholdings or dividends to the appropriate registrar or transfer agent.
Principal Registrar
Jardine Matheson International Services Limited, P.O. Box HM 1068, Hamilton HM EX, Bermuda
Jersey Branch Registrar
MUFG Corporate Markets (Jersey) Limited (formerly known as Link Market Services (Jersey) Limited), IFC 5, St Helier, Jersey JE1 1ST, Channel Islands
Singapore Branch Registrar
Boardroom Corporate & Advisory Services Pte. Ltd., 1 Harbourfront Avenue, Keppel Bay Tower #14-07, Singapore 098632
United Kingdom Transfer Agent
MUFG Corporate Markets (formerly known as Link Group), Central Square, 29 Wellington Street, Leeds LS1 4DL, United Kingdom
Press releases and other financial information can be accessed through the internet at www.hkland.com.
Annual Report 2024 115
Offices
Hongkong Land Holdings Limited
Jardine House
33-35 Reid Street
Hamilton HM 12
Bermuda
Tel +1441 292 0515
E-mail: gpobox@hkland.com
Philip A. Barnes
Hongkong Land Limited
8th Floor, One Exchange Square
Hong Kong
Tel +852 2842 8428
E-mail: gpobox@hkland.com
Michael Smith
Hongkong Land (Beijing)
Management Company Limited
11/F, Office Tower Three
Beijing APM
No. 138 Wangfujing Street
Dongcheng District
Beijing 100006
China
Tel +86 10 6520 4800
E-mail: gpobox.cnp@hkland.com
Zhou Peng
Hongkong Land (Chengdu)
Investment and Development
Company Limited
16F, Block A, Weland Centre
No. 246 Dongda Road
Jinjiang District
Chengdu 610065
Sichuan Province
China
Tel +86 28 61556008
E-mail: gpobox.cnp@hkland.com
Zheng Hai Chuan
Hongkong Land (Chongqing)
Investment and Holding Co. Ltd.
16/F, Building B, The Ring Centre
No. 118 Hucai Road
Liangjiang New Area District
Chongqing 401122
China
Tel +86 23 6136 7777
E-mail: gpobox.cnp@hkland.com
Eric Chen
Hongkong Land (Hangzhou)
Shengyue Management Co. Ltd.
Unit 603, Building Two
Transfar Science & Technology Building
Jiangnan Innovation Polis
Xiaoshan District
Hangzhou 311231
Zhejiang Province
China
Tel +86 571 87013930
E-mail: gpobox.cnp@hkland.com
Hu Pan
Hongkong Land (Nanjing)
Puzhi Management Co., Ltd.
901, 9/F, T1 Office Tower
Jinling Central
No. 29 Wangfu Avenue
Qinhuai District
Nanjing 210001
Jiangsu Province
China
Tel +86 25 8333 8388
E-mail: gpobox.cnp@hkland.com
Huang Lei
Hongkong Land (Philippines)
Consultancy, Inc.
1803 The Taipan Place
F. Ortigas Jr. Road
Ortigas Center
Pasig City 1605
Philippines
Tel +63 2 737 6348
E-mail: gpobox.ph@hkland.com
Jeffrey Lun
Hongkong Land
(Premium Investments) Limited
Unit 702, 7th Floor, EXCHANGE SQUARE
No. 19 & 20
Street 106, Village 2
Sangkat Wat Phnom
Khan Daun Penh, Phnom Penh
Cambodia
Tel +855 2399 2063
E-mail: gpobox.cambodia@hkland.com
Darren O’Shaughnessy
Hongkong Land
116
Hongkong Land (Shanghai)
Management Company Limited
No. 2599 Longteng Avenue
Xuhui District
Shanghai 200232
China
Tel +86 21 2020 0086
E-mail: gpobox.cnp@hkland.com
Shi Guangyu
Hongkong Land (Singapore) Pte. Ltd.
One Raffles Quay
#19-10 South Tower
Singapore 048583
Tel +65 6238 1121
E-mail: gpobox.sg@hkland.com
Michelle Ling
Hongkong Land (Wuhan) Investment and
Development Company Limited
4/F, Building No. 5
Wuhan Dream Land
Jinyintan Avenue, Dong Xi Hu District
Wuhan 430048
Hubei Province
China
Tel +86 27 8289 6866
E-mail: gpobox.cnp@hkland.com
Wang Yi Bin
HKL (Thai Developments) Limited
Unit B, 20th Floor, Gaysorn Tower
No. 127 Rajdamri Road
Lumpini Sub-District
Pathumwan District
Bangkok 10330
Thailand
Tel +66 2 033 0160 ext. 30168
E-mail: gpobox.thailand@hkland.com
William Bright
Beijing Yee Zhi Real Estate
Consultancy Co., Ltd.
Room 1123A, 11/F
Office Tower 3 Beijing APM
No. 138 Wangfujing Street
Dongcheng District
Beijing 100006
China
Tel +86 10 6520 4800
E-mail: gpobox.cnp@hkland.com
Ivy Zhou
MCL Land Limited
One Raffles Quay
#19-10 South Tower
Singapore 048583
Tel +65 6238 1121
E-mail: gpobox.mcl@hkland.com
John Simpkins
PT Hongkong Land Consultancy
and Management
Menara Astra, 39th Floor, Suite B2
Jl. Jend. Sudirman Kav. 5-6
Jakarta 10220
Indonesia
Tel +62 21 5088 9822
E-mail: gpobox.indonesia@hkland.com
Kurniawan Kasudarman
Annual Report 2024 117
Report of the Valuers
To Hongkong Land Holdings Limited
Dear Sirs
Revaluation of Investment Properties Held under Freehold and Leasehold
Further to your instructions, we have valued in our capacity as external valuers the investment properties held under freehold
and leasehold as described in the consolidated financial statements of Hongkong Land Holdings Limited. We are of the opinion
that the market value of the investment properties held under freehold in Cambodia and leasehold in China, Hong Kong and
Singapore as at 31 December 2024, totalled US$24,759,900,000 (United States Dollars Twenty Four Billion Seven Hundred Fifty
Nine Million Nine Hundred Thousand).
Our valuations were prepared in accordance with the International Valuation Standards by the International Valuation Standards
Council and The HKIS Valuation Standards by The Hong Kong Institute of Surveyors.
We have inspected the properties without either making structural surveys or testing the services. We have been supplied with
details of tenure, tenancies and other relevant information.
In arriving at our opinion, each property was valued individually, on market value basis, calculated on the net income allowing for
reversionary potential, however no allowance has been made for expenses of realisation or for taxation which might arise in the
event of disposal.
Yours faithfully
Jones Lang LaSalle Limited
Hong Kong, 3 February 2025
Hongkong Land
118
Major Property Portfolio
at 31 December 2024
Operational
Investment Properties
Attributable
interest
Location
Lettable area of the property
Total
Office
Retail
%
(in thousands of square metres)
Alexandra House
100
Hong Kong
34
30
4
Chater House
100
Hong Kong
43
39
4
Exchange Square
100
139
One Exchange Square
Hong Kong
53
–
Two Exchange Square
Hong Kong
47
–
Three Exchange Square
Hong Kong
30
–
Podium
Hong Kong
–
5
The Forum
Hong Kong
4
–
Jardine House
100
Hong Kong
63
59
4
Gloucester Tower
100
Hong Kong
41
40
1
Landmark Atrium
100
Hong Kong
15
–
15
Edinburgh Tower
100
Hong Kong
44
31
13
York House
100
Hong Kong
10
10
–
Prince’s Building
100
Hong Kong
47
36
11
WF CENTRAL
84
Beijing
42
–
42
ONE CENTRAL
49
Macau
14
–
14
One Raffles Link
100
Singapore
29
23
6
One Raffles Quay
33
123
North Tower
Singapore
71
–
South Tower
Singapore
52
–
Marina Bay Financial Centre
33
284
Tower 1
Singapore
57
3
Tower 2
Singapore
94
6
Tower 3
Singapore
116
8
World Trade Centre 1
50
Jakarta
42
36
6
World Trade Centre 2
50
Jakarta
60
56
4
World Trade Centre 3
50
Jakarta
72
69
3
World Trade Centre 5
50
Jakarta
15
14
1
World Trade Centre 6
50
Jakarta
19
17
2
EXCHANGE SQUARE
100
Phnom Penh
26
17
9
Annual Report 2024 119
Major Property Portfolio
Developable area of the property
Build-to-sell
Attributable
interest
Location
Total
Construction
completed
Under
construction/
to be
developed
%
(in thousands of square metres)
Shougang Project
20
Beijing
198
–
198
Artistic Bay
100
Chengdu
99
99
–
WE City
100
Chengdu
926
903
23
Central Avenue
50
Chongqing
1,119
1,014
105
Century Land
100
Chongqing
206
206
–
Eternal Land
50
Chongqing
278
104
174
Landmark Riverside
50
Chongqing
1,327
1,125
202
New Guanyinqiao Project
40
Chongqing
301
–
301
Re City
100
Chongqing
279
13
266
Scholar’s Mansion
50
Chongqing
318
286
32
Yorkville North
100
Chongqing
1,116
1,116
–
Hangzhou Bay
30
Hangzhou
788
525
263
Grand Mansion
100
Nanjing
93
93
–
JL Central
50
Nanjing
255
255
–
Yue City
48
Nanjing
266
86
180
Century Origin
34
Shanghai
81
–
55
Galaxy Midtown
26.7
Shanghai
411
121
290
West Bund
43
Shanghai
285
57
228
Dream Land
100
Wuhan
493
295
198
Lakeward Mansion
66
Wuhan
226
206
20
Origin Land
100
Wuhan
212
146
66
Peak View
50
Wuhan
67
67
–
Copen Grand
50
Singapore
68
–
68
ELTA
51
Singapore
51
–
51
Nava Grove
50
Singapore
57
–
57
Piccadilly Grand
50
Singapore
41
–
41
Tembusu Grand
49
Singapore
64
–
64
Altea
37.5
Jakarta
395
–
395
Ammaia
50
Jakarta
242
–
242
Arumaya
40
Jakarta
30
30
–
Asya
50
Jakarta
488
129
359
Avania
50
Jakarta
124
–
124
Nava Park
49
Jakarta
474
286
188
Project Emerald
24.5
Jakarta
425
–
425
King Kaew
49
Bangkok
180
52
128
Nonthaburi
49
Bangkok
230
132
98
Hongkong Land
120
Hongkong Land Holdings Limited
Jardine House Hamilton Bermuda
hkland.com