Core Viewpoint - The article discusses the upcoming transformation of the Meilong Town Plaza in Shanghai, which has been under scrutiny since its closure in August 2024. The operational rights are expected to be acquired by Hang Lung Group, with plans for significant redevelopment to enhance the commercial landscape of the area [3][4][6]. Group 1: Project Overview - The Meilong Town Plaza is located in the core commercial area of Nanjing West Road, with a total construction area of approximately 125,000 square meters, consisting of three underground levels and thirty-three above-ground levels. The renovation is set to begin in 2025 and is expected to take three years [6][9]. - The project aims to elevate the regional commercial capacity and establish an international consumption center in the "billion-dollar" commercial district [6][9]. Group 2: Partnership and Investment - Hang Lung Group's subsidiary, Hangyi Commercial Management (Shanghai) Co., Ltd., has been recommended as the commercial operation partner for the project, with plans to form a joint venture for operational management [6][9]. - The joint venture will be responsible for managing commercial, hotel, and office operations, with a minimum commercial area of 50,000 square meters. The commercial section is expected to open in early 2027, while the hotel and office spaces are projected to be operational by May 2028 [9][10]. - A minimum investment of 500 million yuan is required for the renovation of the hotel, shopping mall, and office areas, with the Shanghai Jiubai Group also contributing based on the final shareholding ratio [9][10]. Group 3: Strategic Implications - Following the completion of the Meilong Town Plaza renovation, Hang Lung Group's total managed commercial area on Nanjing West Road will approach 120,000 square meters, enhancing its competitive position in the market [10]. - In addition to acquiring the Meilong Town Plaza, Hang Lung Group has also secured a 20-year operational right for the Hangzhou Department Store, with a total rent of approximately 3.3 billion yuan, reflecting its strategy to expand project scale and visibility [10].

Core Insights - The renovated Meilong Town Plaza is set to open in early 2027, following its closure in August 2024, with significant interest from the market regarding its operational rights, which are expected to be acquired by Hang Lung Group [1][5] - The project is located in the core commercial area of Nanjing West Road and will undergo a comprehensive renovation starting in 2025, with a total construction area of approximately 125,000 square meters [5][7] Group 1 - The construction is scheduled to begin on July 4, 2025, and is expected to be completed by July 3, 2028, with Shanghai Jiubai Group as the designated construction unit [3] - The bidding results for the commercial operation cooperation project were announced on August 7, 2023, with Hang Lung's subsidiary, Hangyi Commercial Management (Shanghai) Co., Ltd., being recommended as the commercial operation partner [5][7] - The project will include a commercial area of no less than 50,000 square meters, with the commercial section opening in early 2027 and the office and hotel sections operational by May 2028 [7][8] Group 2 - The joint venture company formed for the project will be responsible for commercial, hotel, office operations, and property management, with an investment of no less than 500 million yuan for renovations [7] - Following the completion of the Meilong Town Plaza renovation, Hang Lung Group's total managed commercial area on Nanjing West Road will approach 120,000 square meters, enhancing its competitive position in the market [8] - Hang Lung Group has also secured a 20-year operational right for the Hangzhou Department Store, with a total rent of approximately 3.3 billion yuan, as part of its V.3 strategy to expand project scale and visibility [8]

Core Viewpoint - The real estate market continues to face challenges in 2023, with many companies reporting a year-on-year decline in revenue and net profit attributable to shareholders. However, there are signs of recovery, particularly in the retail sector, with expectations for gradual improvement in tenant sales as market conditions stabilize. Group 1: Financial Performance - In the first half of 2023, Hang Lung Group and Hang Lung Properties reported a 3% year-on-year decline in total property leasing income, amounting to HKD 4.912 billion and HKD 4.678 billion respectively, due to challenges in the Hong Kong and mainland operating environments [1] - The overall income and occupancy rates in the mainland office and retail markets have also decreased [1] Group 2: Market Outlook - CEO Lu Weibo expressed cautious optimism for the retail market in the second half of the year, anticipating a more sustained recovery in the fourth quarter as tenant sales improve following project adjustments and a rebound in consumer spending [1][2] - Chairman Chen Wenbo noted that while the mainland market faces pressure, operational data has shown growth in recent months [1] Group 3: Investment Strategy - The company focuses on operating super-grade, internationally-standard office buildings, which continue to see stable demand and higher occupancy rates compared to market averages. However, rental adjustments may be necessary [2] - Lu Weibo emphasized that China remains one of the best investment markets globally, citing political stability and a growing consumer base as key factors for long-term growth [2] Group 4: Financial Management - The company has maintained a conservative approach to financing, holding onto a significant cash reserve to navigate market uncertainties without being forced to sell assets at unfavorable prices [3] - Following the completion of the Hangzhou project, the company expects a significant reduction in capital expenditures, allowing for debt repayment through operational income [4] Group 5: Strategic Focus - The company has shifted its strategy from aggressive expansion to enhancing the value of existing assets, recognizing that the era of relying solely on quantity expansion is over [7] - Lu Weibo highlighted the importance of collaboration within commercial districts to enhance overall market value, as seen in the positive impact of nearby high-profile projects on sales performance [7]