Financial Data and Key Metrics Changes - The company reported a recurring underlying profit of HKD 6.5 billion, a decrease of 11% year on year, primarily due to higher net finance charges and reduced office rental income in Hong Kong [4][23] - Attributable gross rental income decreased slightly by 2% year on year [4][24] - The full year dividend per share was declared at HKD 1.10, an increase of 5% [5][25] - The valuation of investment properties at the end of 2024 was RMB 271.5 billion, a 3% decrease compared to the end of 2023 [27][28] Business Line Data and Key Metrics Changes - In Hong Kong, gross rental income for the office sector decreased by 4% year on year, while retail gross rental income decreased by 3% [24][12] - The Chinese Mainland retail portfolio achieved a 2% increase in gross rental income in Hong Kong dollar terms and a 4% increase in renminbi terms [24][13] - The office portfolio in the Chinese Mainland had a steady performance with a 1% increase in gross rental income in renminbi terms [17][25] Market Data and Key Metrics Changes - The Hong Kong office market remains soft due to oversupply, with overall occupancy at 93% [10][11] - Retail sales growth in the Chinese Mainland stabilized in Q4 2024, with an overall decline of 7% in retail sales, except for Taiguli Tian Tan in Shanghai, which reported positive sales growth [14][15] - In Miami, retail sales increased by 3% year on year, with occupancy at 100% [18] Company Strategy and Development Direction - The company aims to achieve long-term growth targets through an active capital recycling strategy and a diverse development pipeline [6][7] - The company plans to invest HKD 100 billion across three core markets, with 67% already committed [7][9] - The strategy includes maintaining a balanced portfolio mix between retail and office sectors to support sustainable annual dividend growth [7][36] Management Comments on Operating Environment and Future Outlook - Management described the outlook as positive despite market headwinds, emphasizing the resilience of the business [36][39] - The company anticipates a gradual recovery in the premium office sector and expects improved consumer sentiment in the Chinese Mainland retail market [38][39] - Management remains cautious about the Hong Kong office market due to high vacancy rates and new supply pressures [58][59] Other Important Information - The company achieved the number one ranking in the global Dow Jones Best in Class World Index, reflecting its commitment to sustainability [5][31] - The green financing ratio increased to approximately 70%, exceeding the 2025 target of 50% [30] Q&A Session Summary Question: About the buyback program and Mainland China retail outlook - Management confirmed the buyback program will be assessed closer to May, considering market conditions and liquidity [44] - Retail sales in the Chinese Mainland showed mild positive growth in Q1 2025, with expectations for positive rental reversions over time [46] Question: Confidence in luxury retailers' commitments and remuneration structure - Management expressed confidence in luxury brands' commitment to new developments, emphasizing strong partnerships [51] - There are no current plans to change the remuneration structure, maintaining a balance between financial and operational incentives [52] Question: Capital allocation and Hong Kong office market outlook - Management highlighted significant cash flow from residential projects expected in 2025 and 2026, supporting capital allocation [56] - The outlook for the Hong Kong office market remains under pressure, with expectations for stronger demand in 2026 and 2027 [59] Question: Payout ratio and capital recycling - The cumulative payout ratio since listing is 50%, with a commitment to maintain this ratio despite current high levels [65] - Management is actively pursuing capital recycling opportunities to support future investments [67] Question: Asset held for sale and CapEx rationale - The transfer of investment properties to assets held for sale relates to Miami and a project in Hong Kong, with active divestment opportunities being explored [75] - The long-term gearing target is around 20%, with confidence in maintaining credit ratings while managing capital commitments [76]

Financial Data and Key Metrics Changes - The portfolio finished 2024 strong with full-year adjusted EBITDA at $230 million and adjusted FFO per diluted share at $0.80, both at the high end of guidance [33][36] - The company expects total portfolio RevPAR growth to range from 7% to 10% in 2025 compared to 2024, with adjusted EBITDAre projected between $245 million to $270 million and adjusted FFO per diluted share between $0.86 to $0.98 [36][37] Business Line Data and Key Metrics Changes - Group business performed well, with the Westin Washington D.C. Downtown achieving 30% RevPAR growth driven by an 18% increase in group room nights [16] - The recently acquired Hyatt Regency San Antonio Riverwalk saw group room nights grow nearly 7% in the quarter, with an 18% increase in banquet contribution [17] - The Marriott Long Beach Downtown showed solid early performance post-renovation, reinforcing the value created from better brand alignment [19] Market Data and Key Metrics Changes - Urban markets showed strength, with New Orleans hotels experiencing a 23% increase in group room nights, leading to nearly 20% combined RevPAR growth [18] - Boston hotels reported a 39% increase in group room nights, focusing on filling open patterns and driving occupancy [19] Company Strategy and Development Direction - The company is focused on three strategic objectives: recycling capital, investing in the portfolio, and returning capital to shareholders [8] - In 2024, nearly $100 million was returned to shareholders through dividends and share repurchases, with a disciplined approach to capital allocation expected to continue in 2025 [14][24] - The company plans to enhance its capital returns and continue investing in high-quality assets while maintaining a strong balance sheet and liquidity position [25][34] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2025, citing a compelling setup for total revenue growth and improved margins compared to the previous year [22] - The company anticipates a balanced distribution of quarterly growth in 2025, with expectations for RevPAR growth to accelerate in the second half of the year [38] - Management acknowledged challenges in the transaction market in 2024 but remains committed to disciplined capital allocation and exploring new opportunities [24][32] Other Important Information - The company invested $157 million into its portfolio in 2024, with ongoing renovations expected to yield earnings benefits [27][30] - The Andaz Miami Beach is set to open in mid-March 2025, expected to contribute $8 million to $9 million in EBITDA for the year [39] Q&A Session Summary Question: Demand segment assumptions within the 7% to 10% RevPAR guide - Management indicated that group performance is expected to remain solid, pacing above 10% for the year, with business transient strength and slight improvement anticipated [46][47] Question: Pace of wages and benefits increase in 2024 - Wages and benefits increased in the mid-fours in 2024, with expectations to be closer to the higher end of the 4% to 6% range in 2025 due to collective bargaining agreements [54][55] Question: Andaz EBITDA ramp in 2026 - The ramp for Andaz Miami Beach is expected to start at around 20% in March 2025, potentially doubling EBITDA in 2026 as occupancy increases [60] Question: Update on Napa assets and operational improvements - Management reported good EBITDA growth at Napa hotels, with ongoing efforts to optimize group mix and cost management [66][71] Question: Recovery in Maui and guidance range - Management expects solid group demand in Maui, with a potential lift in leisure in the second half of the year as recovery progresses [75][78] Question: Renaissance Orlando's future plans - Management noted that while Renaissance Orlando is not in the 2025 capital plan, they are open to exploring rebranding opportunities in the future [90][91] Question: Total expense growth baked into guidance - Total expense growth is expected to be in the 4% to 4.5% range, with higher wage growth anticipated [108][109]