COVID-19 Devastated Economies the World Over...Wharf Real Estate Investment Company Limited – 1H20 Interim Results 3 $33.7B $37.7B $48.1B $35.2B $26.5B 20 25 30 35 40 45 50 l g Sep

Wharf Real Estate Investment Company Limited

1H20 Interim Results

30 July 2020

COVID-19 Devastated

Economies the World Over

2 Wharf Real Estate Investment Company Limited – 1H20 Interim Results

Highlights

The Group is No Exception to Being a Victim of this Unprecedented Outbreak

$1B+ of Rent Relief Already Extended to Tenants in 1H20

Lease Renewals Face Harsh Market Reality & Hard Reductions

The Mainland Situation is Better than the Rest of the World with Noticeable Economic Activity Restarted

However, No Reliable Forecast as to When the Pandemic would End until a Vaccine is Found

Interim Dividend Payout Ratio Maintained in the Meantime


$33.7B

$37.7B

$48.1B

$35.2B

$26.5B

20

25

30

35

40

45

50

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

2016/17 2017/18 2018/19 2019/20

4.2M

4.7M

6.8M

5.1M

15k

0

1

2

3

4

5

6

7

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Market Trend

Victim of this Outbreak

Unprecedented Crisis for IP & Hotel Sectors

– Cross-border Travel Virtually Halted

– Local Consumption Crushed by Social Distancing

Significant IP Revaluation Loss (Non-Cash)

Source: Census and Statistics Department, Hong Kong Tourism Board

HK Visitor Arrivals HK Retail Sales

Million HK$B


Retail Demand Dives; Impact on Rent Lags

Turnover Rent Reduction Provides Immediate &

Automatic Rent Relief

Lagging Impact on Base Rent

– Additional Relief for Existing Leases

– Hard Reductions on New Leases

Source: Company Data, Census and Statistics Department

HC Revenue vs HK Retail Sales (YoY Chg)

13%

20% 15% 15%

17%

5% 5% 5%

10%

-1%

-30%

18%

25%

10% 11%

0%

-4%

-8%

2%

9%

-11%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 1H20

HC Retail Revenue HK Retail Sales

-33%


IP Revenue Bears the Brunt

Retail Revenue (58% Weighting to Total)

– YoY Decrease of $1.5B or 27%

– 2H Impact Still Uncertain

Less Affected Offices Mitigated Retail Rental

Decline

HKIP Revenue Breakdown

Retail

66%

Office

32%

Serviced Apts

2%

HKIP Revenue

$6.0B


Proactive Initiatives to Harsh Market Environment

Despite $1.5B or 27% Decrease in Retail Revenue

Significant Investment in Marketing Programmes

– Stimulate Shoppers’ Footfall & Consumption

– Strong Activities in our Malls in May/ Jun

Continue to Enhance Location Advantage & Critical

Mass

HC & TS Shopper-drawing Marketing Campaigns


Financial Highlights

Group Revenue -20% & UNP -26%

IP Revaluation Deficit $7.4B (1H19: $1.8B Surplus)

Interim Dividend Payout Ratio Maintained

– DPS $0.78 (65% of Core UNP)

Sound Balance Sheet

HK$M 1H20 1H19

Group Revenue 6,775 8,498

Operating Profit 4,966 6,722

Underlying Net Profit (UNP)* 3,844 5,184

Net IP Fair Value Change (7,350) 1,805

(Loss)/ Profit After IP Fair Value Change (4,454) 6,989

(Loss)/ Earnings Per Share (HK$)

- Attributable to Shareholders

- Underlying*

(1.47)

1.27

2.30

1.71

Dividend Per Share (HK$) 0.78 1.10

*Excl. IP Revaluation Surplus / Loss and Exceptional Items


Harbour City


Trend to be Observed

Proactive Initiatives to Counter Economic Hit

Retailers Paused Expansion & Consolidated Stores

Slow Office Take Up amid Wait-and-see Sentiment

Occupancy*: Retail 90% & Office 86% 5.9 6.2 6.6

7.6 7.5

4.0

2.8

2.3 2.4

2.5

2.6 2.7

1.4

1.4

1.3 1.3

1.3

1.5 1.2

0.7

0.2

0.3 0.3

0.3

0.2 0.2

0.1

0.1

0

2

4

6

8

10

12

14

2015 2016 2017 2018 2019 1H19 1H20

Retail Office Hotels & Club S.A.

HC Revenue Breakdown

1H20: $4.5B (-28%)

* As at 30 Jun 2020

HK$B


Comprehensive Mix Eases Pressure on Tenants

500+ Tenants Constitute Unrivalled Power Centres

Coveted Partner of Best-in-class Retailers

Diversification & Balanced Mix Alleviate Mkt Risk

to Tenants

Fashion

40% Kid's Related

3%

Jewellery,

Beauty &

Accs.

20%

Sports Wear

3%

Dept. Store

5% Electronics

1%

Leather Goods

21%

Others

2%

F&B & Ent.

5%

Rental Income

$2.5B

Rental Income Category Breakdown


On-going Trade Mix Optimisation

20+ Committed New Brands & Restaurants

Hermès (Expansion) - Open by End-2020 Lululemon - Largest Flagship Store in HK

By Kilian - HK Debut Thom Browne – Kowloon Debut Dang Wen Li by Dominique Ansel –

HK Debut

Christian Louboutin - Expansion

Cole Haan GrandShøp – HK Debut


6.8

5.6 5.9

5.6 5.9

5.1 5.2

3.6

3.1 3.3

2.6

3.2 3.2

0.2 82k 4k 8k 15k

89%

May-2020:

14%

0%

25%

50%

75%

100%

0

1

2

3

4

5

6

7

8

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Mill

ion

s

Visitor Arrivals High Tariff A Hotel* Occupancy

Canton Road Hotels

Occupancy & Room Rate Depressed amid Travel

Restriction

Prince Hotel Closed for Major Renovation

Serious Operating Deficits despite Stringent Cost

Control Incl. No Pay Leave

*High Tariff A is the Highest Standard of Hotel Classification by HKTB for Hotels in HK of a

Total of Four Ratings

Source: Hong Kong Tourism Board

HK Visitor Arrivals & Hotel Occupancy

2019 2020

Million


Times Square


Navigating through Tough Times

Challenging Market: Lack of Feel-good Factors

Competitive Landscape w/ Higher Vacancy Nearby

Immediate Measures to Weather Downturn

Occupancy*: Retail 92% & Office 91%

2.0 2.1 2.1 2.1 2.0

1.1

0.8

0.7 0.7 0.7 0.7 0.8

0.4

0.4

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2015 2016 2017 2018 2019 1H19 1H20

Retail Office

TS Revenue Breakdown

1H20: $1.2B (-19%)

* As at 30 Jun 2020

HK$B


Plaza Hollywood


Enhanced Geographical Reach

Largely Local Consumption-driven

Relatively Stable Demand & Footfall

Atop Diamond Hill MTR Station

Interchange for Tuen Ma Line & Kwun Tong Line

Retail Revenue -13% to $248M

Various Customer-driving Marketing Initiatives


Central Portfolio


Premium Commercial (WH & CH)

Wheelock House: Sturdy Demand at Prime Location

Crawford House: Cost-effective Quality Properties

Occupancy* Office Retail

Wheelock House 94% 100%

Crawford House 98% 95%

Wheelock House Crawford House

* As at 30 Jun 2020


The Murray

Depressed Occupancy & Room Rate

Focuses on Local Mkt to Encourage Business Flow

Serious Operating Deficits despite Stringent Cost

Control Incl. No Pay Leave

Internationally-acclaimed

The Heritage Tourism Brands Group

The Only HK Hotel in

“The Leading Hotels of the World”

Collection

https://www.youtube.com/watch?v=-XBLOD7TrH4


Singapore Portfolio


Singapore Portfolio

Located in Prime Orchard Road Shopping Belt

Disrupted by Gov’t-enforced ‘Circuit-breaker’

Restriction

Occupancy* GFA (s.f)

Wheelock Place 93% 465,700

Scotts Square 96% 130,900

* As at 30 Jun 2020


Financial Management


Prudent Financial Management

Net Debt $52.6B (Total Asset: $287.0B)

Low Interest Cost 2.3%

Comfortable Gearing 24.8%

Moody’s A2 Issuer Rating: Outlook Stable

16.7

0.5

14.8

3.0

9.5

13.6

0

2

4

6

8

10

12

14

16

18

2020/21 2021/22 2022/23 2023/24 2024/25 Jul25 & After

Debt Maturity

As at 30 Jun 2020

Jul – Jun:

HK$B


Outlook


Lasting Economic Storm

Combination of Uncertainties

Continuing Spread of Covid-19

Fragile Global & Local Economy

Geo-political Tension

Tourism Industry Remained Paralysed

Near-term Outlook

Long Road to Post-COVID Economic Recovery

Retail & Hospitality Sectors Reset to New Normal

Office Market Remains Under Pressure

All Subject to When the Vaccine is Ready


Sustainability


Key Sustainability Performance

Constituent Member of Hang Seng Corporate

Sustainability Index

Awarded Caring Company Logo, CSR Index Plus,

Social Capital Builder Logo Award

Published the 3rd Standalone Sustainability Report,

which is Prepared in Accordance with Core Option of

the GRI Standards, and HKEX ESG Reporting Guide

Aligned with 11 of 17 UNSDGs

Completed a Preliminary Climate Risk Mapping

Exercise with Reference to the TCFD Framework

Business Units are Partnering with 16 WeCan Schools

to Provide Support


Data at a Glimpse

*Reporting Scope Covers Operations as Identified in WREIC’s Sustainability Report 2019.

https://www.wharfreic.com/en/sustainability/reports

Participate in Wharf

Emergency Relief

Fund to Provide Instant

Support to the Needy

Affected by COVID-19

Pandemic, Including

- HK$1 million to the

Aaron Kwok Love and

Concern International

Charity Fund

- HK$5 million to the

Community Chest’s Anti-

NCP Rainbow Fund


Appendix


HC/TS/PH Performance

Harbour City Times Square Plaza Hollywood

1H20 (HK$M) Revenue % Chg Revenue % Chg Revenue % Chg

Retail 2,780 -30% 816 -23% 248 -13%

Office 1,403 +4% 347 -6% - -

Hotels & Club 181 -74% - - - -

Serviced Apt. 96 -14% - - - -

Total 4,460 -28% 1,163 -19% 248 -13%

Valuation* as of 30 Jun 2020 $175.2B $54.6B $9.4B

1H20 Avg. Retail Passing Rent

(HK$ psf per Month)

$375 $227 $90

* Incl. Hotels at Valuation as of 30 Jun 2020


Premium Quality Portfolio

The Above Refers to the 6 Key Properties in Hong Kong; Central Portfolio: Incl. Crawford House, Wheelock House & The Murray, Hong Kong, as well as Scotts Square & Wheelock

Place in Singapore.

*Valuation of All Hotels are Booked at Cost in Wharf REIC’s Balance Sheet

Revenue Valuation* GFA

Harbour City

70.6%

Times Square

18.4%

Central

Portfolio

5.1%

Plaza

Hollywood

3.9%

Singapore

Portfolio

2.0%

1H20 Revenue

$6.3B

Harbour City

66.3%

Times Square

20.7% Central

Portfolio

7.3%

Plaza

Hollywood

3.5%

Singapore

Portfolio

2.2%

Valuation

$265B

Harbour City

68.5%

Times Square

16.1% Central

Portfolio

6.0%

Plaza

Hollywood

4.6%

Singapore

Portfolio

4.8%

GFA

12.3M s.f


Overview of Application of Funds

Major Capital & Development Expenditure

HK$ 1H20

(Actual)

2020

(Projected)

HKIP 86M 525M

Singapore IP 20M 20M

Mainland Properties 389M 1,509M

Hotels & Others 34M 151M

Total 529M 2,205M

Thank You

COVID-19 Devastated

Economies the World Over

End of Presentation

Wharf Real Estate Investment Company Limited [HKEx Stock Code: 1997.HK]

Disclaimer

All information and data are provided for information purposes only. All opinions included herein

constitute our judgment as of the date hereof and are subject to change without notice. The Group, its

subsidiaries and affiliates hereby disclaim (i) all express, implied, and statutory warranties of any kind to

user and/or any third party including warranties as to accuracy, timeliness, completeness, or fitness for

any particular purpose; and (ii) any liability whatsoever for any loss howsoever arising from or in reliance

upon the whole or any part of the information and data contained herein.

Documents

COVID-19 Devastated Economies the World Over...Wharf Real Estate Investment Company Limited – 1H20 Interim Results 3 $33.7B $37.7B $48.1B $35.2B $26.5B 20 25 30 35 40 45 50 l g Sep