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| Q1 |
What is Wheelock's business strategy? |
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| A1 |
Wheelock and Company Limited¡¦s (¡§Wheelock¡¨) core business is Hong Kong Development Properties (¡§HKDP¡¨). Our business strategy is to actively trade our land bank in order to generate asset turn while maintaining a reasonable profit margin.
In addition to HKDP, as at 31 December 2014, Wheelock also has 55.6% equity investment in The Wharf (Holdings) Limited (¡§Wharf¡¨) and 75.8% equity investment in Wheelock Properties (Singapore) Limited (¡§WPSL¡¨). |
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| Q2
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What is Wheelock's own source of income?
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| A2 |
HKDP generates cash inflow upon property sales and profit recognition upon project completion.
In addition, Wheelock receives stable dividend cash income from Wharf and WPSL. In 2014, Wheelock received HK$3.2 billion dividend cash from these two listed subsidiaries. |
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| Q3
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How was the property sales performance for 2014?
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| A3 |
In 2014, Wheelock achieved contracted property sales of HK$18.8 billion. Residential and commercial sales accounted for 70% and 30% respectively of total sales figure. Since 2012, a steady diversification of property sales between residential and commercial projects has been maintained. |
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| Q4
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How is Wheelock's office sales and development?
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| A4 |
Wheelock has a diversified revenue and sales stream. In 2014, the property sales mainly generated from One Bay East ¡V East Tower of HK$5.4 billion, Grand Austin¡¦s attributable sales of HK$4.1 billion, The Parkside¡¦s sales of HK$4.1 billion and Kensington Hill¡¦s sales of HK$0.7 billion, demonstrated successful sales diversification from office and residential development. Since 2011, office sales contribution has been steady and important to Wheelock, accounting for about half of the sales.
Commercial development has been a steady component in Wheelock since 2010, with one office tower launched each year, including One Island South in 2010, One Midtown in 2011, Delta House in 2012, One Bay East (West Tower) in 2013, and One Bay East (East Tower) in 2014, while One HarbourGate is under planning and is scheduled to launch in 2015.
Hong Kong is an international city with increasing office demand but limited short-term supply. This is a sustainable market representing promising potential for commercial development. Presently, commercial premises for sale account for about 20% of our HKDP land bank under management. |
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| Q5
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What is Wheelock's sales pipeline in 2015?
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| A5 |
Wheelock plans to launch four residential projects and one commercial project in 2015. These include Peninsula East, Mount Nicholson, Shau Kei Wan, O¡¦South Lot 125 and a commercial project One HarbourGate, subject to market condition, project phasing and approval of presale consent. |
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| Q6
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What is the size of Wheelock¡¦s land bank?
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| A6 |
As at 31 December 2014, Wheelock has 7.8 million square feet of DP land bank under management. |
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| Q7
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What is the quality of Wheelock's land bank?
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| A7 |
Wheelock¡¦s land bank is diversified and competitive. Firstly, 95% of it is located in urban area. Secondly, it is concentrated in Hong Kong¡¦s most sought-after locations, with 75% along Victoria Harbour. This diversified portfolio is made up of residential premises (80%) and commercial premises (20%). The land bank size is adequate to fill development needs for the next few years.
In terms of location diversity, the land bank is focused on four urban areas, namely, The O¡¦South Portfolio, The Kowloon South Portfolio, The Kowloon East Waterfront Portfolio and The Peak Portfolio. |
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| Q8
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What is Wheelock's land banking plan?
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| A8 |
We will analyse every available opportunity in the market, either through Government tenders or urban redevelopments. We will continue to acquire new land if they make financial sense, fit well with our selection criteria and are offered at a reasonable price.
In 2014, a total of 1.5 million square feet was added through the acquisitions at Kai Tak and LOHAS Park. |
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| Q9
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How do you see the value of O¡¦South (Tseung Kwan O South)?
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| A9 |
O¡¦South is one of our key developments in the next few years. It is geographically different from the traditional Tseung Kwan O area. The new Tseung Kwan O South is planned to develop into a low density, green residential area, where we believe it¡¦s a tranquil living environment in Hong Kong¡¦s urban area with strong development potential.
The three waterfront residential sites, totalling 1.9 million square feet, will provide over 1,900 residential units. They are served by 2.2 million square feet of green area and over 10 kilometres of waterfront promenade and cycling paths, enjoying the panoramic views of Victoria Harbour. The sites are well connected to the Tseung Kwan O MTR Station which is only three stops from Quarry Bay and a 20-minute commute from Central.
All sites are proceeding in accordance with plan. O¡¦South Lot 125, the second site acquired in the region and located at harbourfront, is tentatively scheduled for launch in 2015, subject to presale consent approval. |
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| Q10
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For the Peak Portfolio, will Wheelock consider property development of medium-to-small scale as it is popular in recent market?
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| A10 |
We will assess market demand and consider reviewing land banking or product strategies. |
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| Q11
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Wheelock has acquired Hotel Properties Limited ("HPL") in Singapore, is the Group planning to have more business development plans in the market and create synergy with the business of own company?
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| A11 |
HPL has both hotel and property development businesses. Wheelock previously owned 20% of HPL¡¦s shares and now owns 22% after re-organisation. The Group will analyze if there is partnership opportunity. |
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| Q12
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Why did Wheelock increase its shareholding in Wharf?
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| A12 |
Acquisition of additional Wharf¡¦s shares was due to its attractive investment return and underlying value. |
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| Q13
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What is Wheelock's own gearing and financial position?
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| A13 |
Excluding Wharf and WPSL¡¦s debt which are all on non-recourse basis, Wheelock¡¦s own net debt was HK$35.9 billion and Wheelock¡¦s own net gearing was reduced to 18.8% as at 31 December 2014. |
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| Q14
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Does Wheelock have immediate debt repayment or refinancing pressure?
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| A14 |
Wheelock has no immediate refinancing pressure. No debt is maturing in 2015. There will also be healthy and stable cash inflow, as HK$13.2 billion of sales receivables will be recouped in the next 24 months, together with HK$3.2 billion steady dividend cash income from Wharf and WPSL in 2014. |
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| Q15
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Will rising construction cost affect Wheelock¡¦s profit margin in the long-term?
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| A15 |
Construction cost is one of the major factors, but we also consider the prospect of market. For O¡¦South, the average land cost is HK$4,200 per square foot. We believe O¡¦South has strong development potential and we will keep analyzing the market in the coming year. |
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| Q16
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What is Wheelock's dividend policy?
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| A16 |
We do not have a fixed dividend policy. However, we aim to reward our shareholders if operating performance is satisfactory.
For the year ended 31 December 2014, the full year dividend increased by 6.75% to HK$1.0675 per share. |
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| Q17
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Does Wheelock support sustainable development?
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| A17 |
Wheelock is committed to sustainable development. On construction sites, a total of seven property developments have been rated Provisional BEAM Plus Gold so far. This reflects compliance with international standards in terms of design, construction and property management, aiming to minimize construction waste, pollution and energy inefficiency. In the office environment, Wheelock Properties Limited (¡§WPL¡¨) achieved a 22.8% reduction in carbon emission, which exceeded our 15% reduction target three years ahead of schedule. This effort is well recognised by WWF Hong Kong¡¦s Gold Label Award for the third consecutive year. Further, the Woo Wheelock Green Fund funded 10 new environment-related research projects in 2014.
In August 2014, WPL published its third Corporate Social Responsibility Report, reporting for the first time according to Global Reporting Initiative (GRI) G4 sustainability reporting guidelines. Wheelock will be publishing its first independent Environment, Social and Governance Report in August 2015. |
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| Q18
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Does Wheelock support Corporate Social Responsibility (¡§CSR¡¨)?
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| A18 |
Business-in-community is a critical aspect of CSR. Project WeCan has entered its second stage with a total of 44 participating schools, benefiting over 40,000 underprivileged students. Through activities such as company visits, career sharing and job tasting, this initiative helps students to expand their exposure and assists in their career planning.
In 2014, WPL¡¦s staff volunteers organised and participated in 55 CSR events, devoting more than 900 volunteer hours. A total of HK$4.2 million was raised for charities through various events including the second annual Swim For a Million, co-organised with The Community Chest of Hong Kong. In art and culture, The Peak Photo Competition, Tseung Kwan O Photo Competition and The Peak Exhibition were organised to promote Hong Kong¡¦s natural beauty and to support photography talents.
WPL was granted the Social Responsibility Award of the Year by the Royal Institution of Chartered Surveyors to recognise its commitment to community service. WPL has also been awarded Caring Company by the Hong Kong Council of Social Services for the second consecutive year. |
