Investment Rating - The report indicates a stable but cautious outlook for Kampala's property market entering 2026, with long-term fundamentals remaining supportive, particularly for industrial, suburban office, and convenience-led retail assets [9]. Core Insights - Kampala's real estate market showed resilience in H2 2025, driven by macroeconomic stability, contained inflation, and sustained infrastructure investment, with economic growth strengthening to 6.3% in FY 2024/25 [4][12]. - The residential sector experienced modest softening, particularly in prime expatriate neighborhoods, due to increased apartment supply and shifting tenant demographics [5][54]. - The office sector transitioned into a tenant-favorable cycle, with rising vacancy levels in older buildings and stable rental rates for Grade A+ offices [6][78]. - The retail sector remained resilient, supported by strong footfall growth, although average spending per visit declined [7][100]. - The industrial sector outperformed all asset classes, with occupancy levels consistently above 80% and firm rental rates driven by record coffee exports and preparations for oil production [8][9]. Economic Overview - Economic growth rate for FY 2024/25 was recorded at 6.3%, with inflation remaining below the Bank of Uganda's target of 5% [10][15]. - Uganda achieved a Balance of Payments surplus of US$2.37 billion for the year ending October 2025, the highest in over 15 years [11][14]. Residential Sector Summary - The prime residential market saw a decline in rental rates for two-bedroom and three-bedroom units by approximately 10% and 9% respectively, with occupancy levels stable at around 83% [55][60]. - Increased supply of one-bedroom units has intensified competition, leading to downward pressure on rental levels for larger units [56][67]. - The short-let market continued to grow, particularly in secondary neighborhoods, supported by lower entry costs and improved building quality [54][69]. Office Sector Summary - The office market faced rising vacancy levels, particularly in lower-grade buildings, with Grade A+ rents remaining stable at approximately US$18 per square meter [79][80]. - Demand for smaller office spaces remained strong, driven by startups and SMEs adapting to hybrid working models [88][92]. - The supply pipeline includes over 200,000 sqm of office space expected to be delivered over the next two years, despite a slowdown in new developments due to political uncertainty [91][94]. Retail Sector Summary - Retail footfall increased by 15% year-on-year, although average spending per visit declined by 1% [105][111]. - The transition from informal trading to formal retail developments is evident, with suburban retail markets gaining traction [102][100]. - International brands outperformed smaller retailers, benefiting from stronger brand recognition and structured promotional strategies [113][112].

Financial Data and Key Metrics Changes - The core rental business saw a decline of 3%, which was anticipated at the beginning of the year, with hopes for improvement in the second half [7][9] - Overall revenue contribution from property sales and hotel business accounted for 33% of total revenue, down 6% [9] - The net gearing of Hang Lung Properties stood at 33.5%, reflecting a slight increase of 0.1% compared to December [37] - The average borrowing cost decreased to 3.9%, a decline of around 40 basis points from the previous year [39] Business Line Data and Key Metrics Changes - Rental revenue in Mainland China decreased by 1% in the first half, an improvement from a 4% decline in 2024 [12] - Retail business remained flat compared to a 3% decline in 2024, with base rent increases offsetting sales rent drops [13] - Office rental revenue continued to face challenges, with a decline of 4% [12] - New letting increased by 36%, indicating a strong demand for new tenants despite market challenges [19] Market Data and Key Metrics Changes - Hong Kong's rental revenue decreased by 4%, while residential and service apartment rentals improved by 11% [34] - The retail sector in Hong Kong saw a decline of 7%, but the overall sales were down by only 2% compared to the market's 4% decline [34] - The Mainland retail landscape is evolving, with some athleisure brands performing better than luxury brands [17] Company Strategy and Development Direction - The company is focusing on enhancing its retail offerings through events and tenant management to adapt to the changing retail landscape [18] - A national program is being launched to improve operational efficiency and attract foot traffic in second-tier cities [18] - The company is exploring hybrid property models to expand its retail business in cities where it already has a presence [64] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about stability and potential growth in the second half of the year, with expectations for mild growth in retail sales [6][66] - The company is committed to maintaining its dividend policy, aiming for stability rather than frequent resets [75] - Management acknowledged the challenges in the office rental market but emphasized the retention of quality tenants as a key strategy [30] Other Important Information - The company has increased its exposure to renminbi-denominated loans, which helps manage finance costs and provides a natural hedge [39] - The company is committed to sustainability, with 80% of projects in Mainland China powered by renewable energy [43] Q&A Session Summary Question: Future of hybrid property models for retail expansion - Management indicated that hybrid models will be considered when there is demand and synergy with existing projects [64][65] Question: Tenant sales trends for the next twelve months - Management anticipates a potential improvement from negative sales to mild growth in the second half of the year [66] Question: Improvement in the second quarter despite trade war concerns - Management attributed the improvement to increased occupancy and traffic, along with external factors like stock market stabilization [70][72] Question: Dividend policy for the full year - Management intends to maintain a flat dividend, with no plans for cuts unless circumstances change [75] Question: Potential issuance of convertible bonds - Management is cautious about dilutive instruments and currently does not consider issuing convertible bonds [76][77] Question: Progress on transitioning properties in Shenyang and Wuhan - Management reported improvements in occupancy and traffic, with a focus on enhancing the tenant mix to attract customers [78][79]

Financial Performance - Q1 2025 - LVS Consolidated Net Revenue was $2862 million, a decrease of $97 million compared to Q1 2024[10] - Net Income Attributable to LVS was $352 million, a decrease of $142 million compared to Q1 2024[10] - Adjusted Property EBITDA was $1140 million, a decrease of $67 million compared to Q1 2024[10] - Adjusted Property EBITDA Margin was 398%, a decrease of 100 bps compared to Q1 2024[10] - Macao Operations Adjusted Property EBITDA was $535 million, a decrease of 123% compared to Q1 2024[13] - Marina Bay Sands Adjusted Property EBITDA was $605 million, an increase of 13% compared to Q1 2024[13] Capital Allocation - LVS repurchased $450 million of its stock in Q1 2025[10, 11] - LVS paid $179 million in dividends, which is $025 per share[11] - The LVS Board of Directors increased the share repurchase authorization to $20 billion on April 22, 2025[8, 11] Macao Market - Macao market generated gaming revenue of approximately $72 billion in 1Q25, up 1% from 1Q24[26] - Mass gaming revenue in Macao was approximately $63 billion, up 1% from 1Q24[26] - Visitation from China excluding Guangdong province remained at approximately 75% of 1Q19 levels[26] - Total visitation to Macao in 1Q25 was approximately 99 million people, which is approximately 95% of 1Q19 levels[57] Marina Bay Sands - Mass win at Marina Bay Sands was $778 million, up 13% from $687 million in 1Q24[29] - Marina Bay Sands Adjusted Property EBITDA margin was 520%[29]