PresentationNow I will hand the conference over to the speakers. CEO, Johanna Hult Rentsch; and CFO, Jakob Nilsson. Please go ahead.To begin with, I would like to welcome everyone who's tuning in and extend an especially warm welcome to you, Jakob, our new CFO.Johanna RentschChief Executive Officer And we will be co-presenting this presentation together. So my name is Johanna Hult Rentsch, and we will take you through this presentation. We are in a fairly similar market and economic climate as we were in th ...

Core Viewpoint - Hysan Development (00014) reported a mixed performance in its interim results, with revenue growth but a significant decline in profit attributable to shareholders [1] Financial Performance - The company reported a revenue of HKD 1.73 billion for the six months ending June 30, 2025, representing a year-on-year increase of 2.19% [1] - The recurring basic profit was HKD 1.031 billion, up 1.2% year-on-year [1] - Profit attributable to shareholders was HKD 75 million, showing a substantial decrease of 82.44% year-on-year [1] - The company proposed an interim dividend of HKD 0.27 per share [1] Operational Highlights - Revenue growth was attributed to portfolio optimization and improved sales performance [1] - The office rental rate increased from 90% to 92%, which helped mitigate the impact of rental reductions [1] - Strong expansion in Shanghai Li Yuan and recovery in the rental rate of Zhu Lin Yuan contributed to overall revenue and profit growth during the period [1]

Core Viewpoint - Hysan Development (00014) reported a slight increase in revenue and recurring profit for the six months ending June 30, 2025, despite a significant drop in profit attributable to shareholders [1] Financial Performance - Revenue reached HKD 1.73 billion, representing a year-on-year increase of 2.19% [1] - Recurring basic profit was HKD 1.031 billion, up 1.2% year-on-year [1] - Profit attributable to shareholders was HKD 75 million, a decrease of 82.44% year-on-year [1] Dividend Announcement - The company proposed a first interim dividend of HKD 0.27 per share [1] Operational Highlights - Revenue growth was attributed to portfolio optimization and improved sales performance [1] - Office rental occupancy rate increased from 90% to 92%, helping to mitigate the impact of rental reductions [1] - Strong expansion in Shanghai and recovery in rental rates at Zhulin Garden contributed to overall revenue and profit growth during the period [1]

Core Viewpoint - Hysan Development Company Limited (00014) reported its interim results for the six months ending June 30, 2025, showing a revenue increase of 2.19% year-on-year, but a significant decline in net profit attributable to shareholders by 82.44% [1] Financial Performance - Revenue reached HKD 1.73 billion, reflecting a year-on-year increase [1] - Net profit attributable to shareholders was HKD 75 million, a decrease of 82.44% compared to the previous year [1] - Basic earnings per share were HKD 0.07 [1] - The company proposed an interim dividend of HKD 0.27 per share [1] Operational Highlights - Revenue growth was attributed to portfolio optimization and improved sales performance [1] - The office rental rate increased from 90% to 92%, which helped mitigate the impact of rental reductions [1] - Strong expansion of Shanghai Li Yuan and recovery in the rental rate of Zhu Lin Yuan since last year contributed to overall revenue and profit growth during the period [1]

Core Insights - The report by JLL indicates that the rental prices for Grade A office spaces in Changsha have decreased, which has stimulated leasing activity in the market [1][2] Group 1: Market Overview - In the first half of 2025, there was no new supply of Grade A office buildings in Changsha, maintaining a total stock of 2.398 million square meters [1] - The average rental price for Grade A office spaces decreased by 4.51% to 74.6 yuan per square meter per month compared to the end of the previous year [1] - The net absorption of Grade A office spaces reached 32,902 square meters, a 59.4% increase year-on-year, while the vacancy rate decreased by 1.37 percentage points to 31.5% [1] Group 2: Leasing Activity - New leases accounted for 38.6% of the leasing transactions, surpassing the 37.2% from relocations, indicating that reduced rental costs are attractive to companies seeking quality office spaces [2] - Many landlords have proactively reduced rents for expiring leases to meet the demand for cost reduction and efficiency [2] Group 3: Industry Demand - The top three industries driving leasing demand were finance (22.2%), retail trade (16.1%), and professional services (15.8%) [6] - Traditional financial sectors, such as life insurance and pension insurance, showed active demand with multiple large-scale lease agreements [6] - The retail sector, including clothing brands, liquor companies, and e-commerce, is also experiencing a trend of quality upgrades and expansion [6] Group 4: Future Outlook - The supply of Grade A office spaces in Changsha is expected to slow down in the second half of the year, leading to a gradual decrease in the vacancy rate [6] - The average rental prices are anticipated to continue declining due to cautious leasing decisions influenced by macroeconomic conditions [6] - Approximately 200,000 square meters of new supply is projected to enter the market in 2026, which may continue to exert pressure on rental prices and vacancy rates [6]

Market Overview - The Suzhou office market is under significant pressure in the first half of 2025 due to the aftermath of a supply peak in 2024, with multiple projects delayed and only one new project, Nissin Center, launched in Q2 [3][4] - The overall net absorption in the first half of 2025 was 33,900 square meters, with a vacancy rate reaching 29.7%, the highest in five years [4][6] Rental Market Dynamics - Rental prices have decreased, with the average rent recorded at 69.30 yuan per square meter per month, the lowest in nearly three years [6] - Landlords are offering various incentives such as rent discounts and extended rent-free periods to retain existing tenants and attract new ones [6][11] Demand and Supply Trends - The demand side remains weak, with some companies downsizing or vacating spaces, leading to a contraction in overall transaction volume compared to the previous year [4][8] - The supply of new office space has slowed, with only 37,000 square meters of quality commercial space added in Q2 [4] Sector-Specific Insights - The electronics and technology sectors, along with professional services, have shown active transaction volumes, while emerging manufacturing companies have also seen a year-on-year increase in transactions [8] - Large transactions over 1,000 square meters have been limited, with professional services and finance being the main sources of demand [8] Future Outlook - The second half of 2025 is expected to see the introduction of over 1.7 million square meters of high-quality office projects, intensifying market competition [11] - The focus for office operators will shift from price competition to enhancing the value of office spaces through integration of industry resources and creating a supportive ecosystem for tenants [11][12] Policy and Economic Development - Suzhou has introduced multiple industry policies targeting advanced fields such as AI and biomedicine, aiming to create an attractive industrial development ecosystem [12] - The city signed 417 key projects with a total investment exceeding 341.57 billion yuan, indicating strong industrial aggregation effects [12]

Core Viewpoint - The Hong Kong office market, particularly in the Central business district, is showing signs of recovery driven by a resurgence in the capital market and IPO activities, despite challenges such as high vacancy rates and new supply [1][2][3]. Group 1: Market Trends - The Hong Kong Exchange's acquisition of a commercial building for HKD 6.3 billion signifies a major transaction in the office market, reflecting confidence in the sector [1]. - Reports indicate that while the office market faces pressure from new supply and high vacancy rates, there are emerging signs of recovery, especially in Central [2][3]. - As of June 2025, Grade A office rents in Central are expected to have dropped nearly 45% from their peak in 2019, making it an attractive option for financial institutions [2]. Group 2: Demand Drivers - The demand for premium office space in Central is primarily driven by financial institutions, particularly as more mainland companies list in Hong Kong, which is expected to boost leasing activity [2][4]. - The first half of the year saw a notable demand from mainland financial, insurance, real estate, and professional services firms for quality office spaces in core business districts [3]. - Smaller tech companies and startups are also entering the market, seeking affordable office spaces ranging from 200 to 500 square feet [3]. Group 3: Future Outlook - The recovery of the Hong Kong capital market is attracting more Western financial institutions to the office market, with several large leasing contracts signed recently [4]. - The IPO market's activity is anticipated to positively influence the demand for office spaces, particularly in Central, with expectations of rental stabilization in the second half of the year [4]. - A differentiated market trend is expected, with core areas stabilizing while non-core areas may continue to face pressure, dependent on global economic conditions and the absorption of new supply [4].

Core Viewpoint - The Beijing office market is experiencing a slight decrease in vacancy rates, ongoing rental declines, and heightened activity from technology companies [1][2]. Group 1: Vacancy Rates and Market Demand - As of the end of Q2 2025, the vacancy rate for Grade A office buildings in Beijing decreased by 0.2 percentage points to 18.4%, reversing the upward trend seen in Q1 [1]. - The net absorption turned positive, recording 12,960 square meters, indicating a recovery in market demand [1]. - Major leasing activities in Zhongguancun and Lize contributed to the stabilization of vacancy rates [1][2]. Group 2: Rental Trends - In Q2 2025, the rental price for Grade A office buildings decreased by 1.6% to RMB 233.1 per square meter per month, marking a 7.4% decline compared to Q4 2024 [2]. - The Financial Street area, known for its high rental rates, saw a rental drop of 6.1% to RMB 389.2 per square meter per month, down 8.7% from Q4 2024 [2]. - Zhongguancun's rental price was RMB 258.2 per square meter per month, with a 1.0% decrease, while its vacancy rate fell by 3.2 percentage points to 12.8%, the largest decline among districts [3]. Group 3: Future Market Outlook - The rental trend is expected to continue downward, with a forecasted annual decline of 14.8% for 2025 [4]. - Despite no new supply expected in the second half of 2025, a supply peak is anticipated in 2026, with 757,000 square meters of office space expected to enter the market, potentially leading to further rental declines [4]. - The market is currently in a stabilization phase, with limited room for landlords to reduce rents further, while future industries identified by the Beijing government may drive demand for office space [4].

Core Insights - The report indicates that the rental demand for commercial real estate in key cities is gradually recovering, with a noticeable reduction in rental declines for both retail and office spaces in the first half of 2025 [1][2] Group 1: Commercial Retail Rental Trends - In the first half of 2025, the average rental price for shops in the top 100 commercial streets was 24.16 yuan per square meter per day, reflecting a 0.35% decrease compared to the previous period, which is a 0.16 percentage point improvement from the second half of 2024 [1] - The average rental price for shops in the top 100 shopping malls was 27.05 yuan per square meter per day, with a 0.12% decrease, showing a 0.19 percentage point improvement from the second half of 2024 [1] Group 2: Office Rental Trends - In Q2 2025, the average rental price for office spaces in major business districts of key cities was 4.57 yuan per square meter per day, with a 0.34% decrease, leading to a cumulative decline of 1.06% in the first half of the year [2] - The outlook for the second half of 2025 suggests that macroeconomic policies will become more proactive, potentially leading to a sustained recovery in rental demand for retail spaces, while the office market may experience structural adjustments with growth in demand from high-tech manufacturing and information services [2]

Group 1: Core Insights - Jane Street has signed the largest Grade A office lease in Hong Kong since the pandemic, leasing a building in Central with a total area of 223,000 square feet at a monthly rent exceeding HKD 30 million (approximately USD 3.8 million), which is a 50% premium over the current average rent [1] - The lease will commence in 2028 for a duration of five years, with an option to renew for an additional four years at market rates [1] - This transaction is considered the largest office leasing deal in Hong Kong's Central business district in decades [1] Group 2: Company Expansion - Jane Street is actively expanding its office space globally, planning to double its office area in London to approximately 500,000 square feet and increase its New York office space to about 1 million square feet [2] - The recent lease in Hong Kong is part of Jane Street's global expansion strategy [2] - Jane Street, established in 2000, is recognized as one of the strongest market-making firms globally, with trading revenues expected to exceed USD 20 billion in 2024, ranking just behind Goldman Sachs and JPMorgan [2] Group 3: Market Context - The timing of Jane Street's lease coincides with a shift in perception regarding Hong Kong's status as a global financial center, following a period of weak demand and oversupply in Grade A office space [3] - Since 2022, rental prices for Grade A offices in Central have dropped over 20%, with the current average rent at approximately HKD 89.8 per square foot [3] - Recent significant IPOs, such as CATL's USD 5.3 billion listing, have enhanced Hong Kong's position as a leading listing venue, contributing to increased market activity [3]