I just highlight a few numbers that perhaps illustrate something. I do not want to push my luck too far. For example, I am just wondering if the luxury sector may not be recovering finally. Or put it another way, has it really reached a new normal? Unfortunately, the new normal means it is going to come down, and at some point, it will level off because all the gifting are all gone. It is really the real end users. For many reasons, I think so. One is all the luxury brand owners or executives of those companies tend to indicate that the numbers, they all seem to say that it is improving in China, and that has been our experience. That is one. The underlying reason, perhaps, the luxury goods market have been weak for now for the last four and a half years, perhaps, and maybe some pent-up demand.
Salary growth in China is still very strong, especially for certain professions. You have a new breed, a new group, a new cohort of new purchasers rising, especially in the first-tier cities, such as Beijing and Shanghai. There are other signs that are less directly related to it. I just need one more that is directly related to it, and that is the, what do you call it, normalization, what do you call it, of prices between China and outside. I read a report somewhere that says that whereas in the past, it was something like, on average, 25% more expensive in China than outside, that the numbers today are more like 10%, 15%. So that must help the luxury sector. Also, there was a Bain report that says that whenever the RMB is strong, sales tend to flow outside, which makes sense.
Now that RMB is weak, a lot of purchasers have come back to the mainland of China. All those things, I think, come into play, I believe, that makes the luxury sector perhaps have some recovery. I do not know if it is a nationwide event, or will it flow into the other sectors. At least in what we have observed in our own Palace 66, luxury goods are doing very well. If you were to compare like with like this year and last year, that means take out the 13% basement that is taken out of the market because of refurbishment, not because of the AEI. You take that away, just compare like with like, retail sales was up 16%, one six percent. That is darn good. Our rent is also up, what, 5%, 6%, or 7%? Taking out the basement. Takes out the basement, then 6%, 7%.
There are some positive signs somewhere. Let me give you a totally different picture somewhere else, and that is the northeast of China. Everybody say that northwest is a very economically troubled area, which is true. Some even say that it has real negative interest, GDP growth. I do not know if it is really true, but anyway, suffice to say that it is pretty tough. Yet, if you were to look at all the KPIs, all the Key Performance Indexes of Palace 66, everything is up. Footfall is up, retail sales is up, rent is up, unit price is up, occupancy rate is up, and also something else. Anyway, everything is up. So you say, how can it be in a tough market such as Shenyang?
Well, there's still a lot of purchasing power there. I also believe that knowing the Chinese government somewhat, that they would not allow any particular region, especially an important region such as northeastern part of the country, to suffer for long. You remember that 15 years ago, there was the Go West, the Western district. That was because they have been left behind. The reform was mostly in the coastal area. Actually, I was part of it in the sense that I was invited to speak, actually, in the first forum that they had was in Chengdu. That was the only time I've ever met Zhou Yongkang. He hosted dinner. It's a huge table, 30 people. I was just one of them because I was one of the keynote speakers.
That was because the Chinese leadership always try to take care of the part that is left behind. Especially a part like Northeast China, which is strategically very, very significant. It's the breadbasket in many ways. The soil is very rich. It is industrial-based. There are a lot of manufacturing companies there. It's militarily significant. The Air Force is in Shenyang, the Navy is in Dalian. Navy is becoming more and more important to China. The financial center of the Northeast is in Shenyang. It is close to Russia, Korea, and Japan. For all these reasons, I just don't think that the government can afford to not revive the economy there. They have many means to do that, right? There's a lot of here, a lot of policy measures that they can take.
Whereas in the long run, I'm not negative about that whole area, although right now it's slow. Even in the slow market, you look at Palace 66 and you say, "Wow, they're doing very, very well." Perhaps we're taking market share from others, maybe, but whatever market share you take, there has to be the market, and I think the market is there. Forum 66, on the other hand, has a totally different market dynamics, different sector, different circumstances. We opened late. That is still struggling. But Palace 66 is beautiful numbers-wise. You have, in the same city, in a very supposedly economically weak city, you have two very divergent story. I don't think that one can generalize and say that everything in the Northeast is bad. I'll never say these things to the journalists. They don't care.
But you guys are the experts, so I have to give you a little bit more color on how these things are working out. Just some comments. Philip, you want to add some comments of your own?
No. That's a very comprehensive summary. I think I have nothing really to add.
Okay. We now welcome any questions. Morgan Stanley.
Just speak.
Yeah, now it's working.
Good seeing you.
Hi, Ronnie. How are you?
Good.
I have two questions, one related to dividend.
What?
Dividend.
Oh, dividend. Yeah.
And one related to residential market.
Yeah.
The context of dividend is that there was a year when you cut your dividend by 1 cent, just to give an indication that things are tough. Now that you are saying that retail market may be recovering, why didn't you give indication by adding 1 cent? That is the first question.
I didn't know you are from Taiwan. You are the only one that suggested that, to my knowledge.
I didn't read Taiwan, but maybe we.
You should maybe.
The second question is related to residential market. You have been selling a lot. You have been obviously right all along in the timing. Question is, the interest rate cycle in the U.S. is about to start for the next three years. Just wanted to get your view, and do you genuinely think that this is a major downturn, or is it just another cyclical that we have seen for the last 10 years? Small cycle and comes back again in the market.
For the residential market.
Your personal view. Yeah. Thank you. Hong Kong residential.
In Hong Kong. Well, first of all, from what I have read, according to [Non English content] CCL, Centa-City Leading Index, right. The last three, four months, it is all-time high. For us to sell in the last three, four months is a very reasonable thing to do, isn't it? I do not think the interest rate is that big of a deal, frankly. The world has hardly ever seen a time when interest rate is so low for so long. So what if one country, albeit a very important one, the United States, may begin to, well, started to up interest rate, but I certainly do not see it in Japan. I do not see it in Europe. Ultimately, we are far more tied to China, as an economy, and certainly for our business, than to the United States.
I do not see that as neither here nor there, frankly, in my opinion. On the dividend issue, we discussed what some people wrote. Should we add 1 cent back? We noticed that a lot of other people have been upping dividend. Maybe that is why you like them, because you always like dividends. But on the other hand, our board feel that at that time, a year ago, that we should send a message that market is really weak, and hence cut the 1 cent. I told you already, that was not management's recommendation, but if all the board members feel so, we do it. But you look at it today's uncertainty is greater than before. Perhaps some good news notwithstanding. But as I said, is that good news nationwide? Is it sustainable?
Is it not just for the luxury market, because let us face it, luxury market is a very, very small market, although a very good market. So that is one point. Another one is that, we are selling our residential units in Hong Kong. We still have, what, 87 units left in The Long Beach, one unit left in The Harbourside. Any last taker? Duplex, great one. We will just add 5% if you buy it. Because you know the value much more than the average guy. Anyway, and 16 units of Blue Pool Road, right? Basically, that is it. I think that the chances of The Long Beach selling out in the coming year is pretty good. Blue Pool Road, if the price is right, it will sell. We demonstrated already that we could have sold. We did sell at reasonable prices. But hopefully, we will sell even higher.
If you want to buy now. It will be higher, okay? After that, then what is the gain? We always know that our long haul rely on rental in mainland China. We have residential in mainland China, but in terms of total amount, it is not going to be humongous, but still a meaningful one. We can always sell that. We still have a lot of investment properties in Hong Kong that, if necessary, can be sold. But if you are the board and you look at this whole overall picture and you say, "Hmm. Is this the time to give an optimistic signal to the market?" I argue not. After all, dividend yield is already, what, 4% roughly?
It is a reasonable dividend yield. It is still a very low interest rate environment. You get 4%, and buy Hang Lung, hey, you have got to be a fool not to buy, right? That is chairman's talk. We have just chosen to. By the way, the consensus is HKD 0.58. Not that we listen only to you guys.
Actually, on the residential sale, would you like to supplement information regarding how much we are going to recognize this year?
Actually, there are 95 units of Long Beach that we sold, meaning that purchase aside the provisional S&P just before the year-end, but the signing of the formal S&P was after the year-end. These 95 units have not been included in the 2016's result, and will have been included this year. The sales value of those 95 units is HKD 1 billion.
There are also some sold early this year.
Since early this year, we sold another 55 units. That is why we only have 80 odd units left now.
Altogether, it is about HKD 1.6 billion to be recognized in FY 2017. Yeah, UBS, you got-
Hi. I got two questions. First, when I look at the Tier 2 city rental income on a HoH basis, although the occupancy increased, the rental income actually declined, if I am correct. Do you see that the negative rental reversions in Tier 2 cities are already bottoming, or there is potentially some more pressure there? That is my first question. My second question, if you look at the statement on the announcement, you mentioned may further build land bank when opportunities arise. Are you looking to Hong Kong or China, or is there any opportunities that we might see concluding quite soon? Thanks.
Well, the land bank issue, obviously, we are very active looking in China. When we will be able to succeed, I do not know. In Hong Kong, we have never stopped looking. We look at everything out there. But as Hopewell Holdings said there two days ago, prices, other people are just willing to bid very high prices. That frankly, they have been beating the Hong Kong developers. So either they know something we do not know or they have a lot more money than we do. Right? Or they have a different motive for what they are doing than other than just purely profit, which we in the Hong Kong company, basically, we are just for profit and nothing else. They perhaps, for example, may want to go outside of mainland China, and hence Hong Kong is a very natural first step, first place to come. So why not?
Whatever it is, I think it's a sea change. I'm not the only one to have talked about it because other people have already said the same, and that is, we're going to see a lot more mainland Chinese companies coming to Hong Kong. It's just a fact. Do we want mainland China to do well? Yes, because if they do well, Hong Kong will do well. But corollary to that is that some of them is going to come to Hong Kong. And we are always a very open city as an economy, and we should welcome them. I don't quite like the fact that the prices are so high, not just because Hang Lung cannot buy, but from a purely social perspective, putting aside my businessman's hat, from just purely social perspective, I think I don't like to see prices too high.
If it is a business enterprise, if this is not a public sector activity, meaning land sales in Hong Kong, I would be a very happy man. You guys want to buy at crazy prices? Hey, I'm going to give you more land. As we all know, we're having a big debate on whether we should and how can we get more land, right? But, hey, if there's a will, there's a way. If it is purely a private sector activity, bingo. You guys are so willing to pay high prices, I'll feed you tons of it, right? Whether you make money or not, that's your problem, because nobody have a gun to your head to say that you have to buy. And you're willing buyers, you bear the consequences. And then when enough land is being sold, prices will come down. If they lose money, that's their problem, right?
But unfortunately, government doesn't work that way. And in the case of Hong Kong, the government controls basically all the unused land. So it's a complicated situation, but I hope that prices will not get out of hand. As far as the second-tier cities in the mainland is concerned, your first question, Clifford, I think that it depends on the city, and it depends on the competitive landscape of a particular market niche, as I illustrated, using the two shopping centers in Shenyang. One thing I would say, and I would be interested to hear what Philip have to say, and that is, we are pretty well-positioned in each of the market in which we play. We are usually number one, and at worst, number two in each of the market in which we play. As I wrote previously, number one, number two, it's a big difference.
The fight is to become number one, because the return characteristic is very different. And so, in some cases, in Palace 66, we were not the first to hit the market. But the competition was not as keen. There's a lot of space on Zhongjie, on the street, but good ones are not that many. And hence, we were able to eat other people's breakfast, so to speak, right? And some even closed shop. But on the other hand, in the high-end, in the five-star luxury segment, there are other existing players that are very good. Basically, there are two. One, I think is definitely disappearing, but you still have one. And so when we started, we were number three. I like to think that we're now number two, right? But even then, you still have to fight and work harder in order to benefit from it.
The second-tier city one, it is a very different picture, and it is quite mixed. Like Parc 66 in Jinan. Basically, it is a very healthy kind of a place. It is quite big. It is 1.7 million sq ft. We have to have some changes of tenant mix. In the process of which there will be a little bit of a vacancy, but that is really just transitional time. Then rent, total rent may not grow as much, because the so-called experience type of facilities, they do not pay rent. At least they do not pay good rent. But on the other hand, footfall is good. It is really dependent on city to city, and even within the city, you really have to drill down into the specific segment that you are in, and your own competitive position vis-à-vis the market.
I think you pretty much covered all the main points. I will just add that it is a very mixed bag, and it really depends on the cities. But I think in general, you would appreciate that in this situation, against this kind of headwind, you will have to be very flexible and you have to ensure that there is a viable occupancy rate. Obviously be very able and willing to negotiate on the rental terms, including the lease rates. That is what we are facing. Do we get some signs from the big brand names? A lot of them obviously listen to general instructions from Rome or Paris. The point really is, they seem to look at each other a lot. They want to wait for the other guy to move first. Once that happens, then obviously you will find a lot of people knocking on doors.
But at this point in time, I think the management has been strengthened. The malls, actually, we take the opportunity obviously to upgrade many of the malls, including, of course, most visibly Shanghai and some places in Hong Kong. That was a perfect timing looking back, when we initiated those enhancement initiatives. Actually, they are well-poised for the next wave of growth. When would that be? I cannot tell you. I have been very cautious at this point in time. But we are actually making sure that we fit the market and exercise whatever we can do very well at this point in time.
Thank you, Philip. Coleman, you have a question?
Can I add one other thing, and that is the office. The office has been really quite good. Not only are we gradually filling up in terms of more higher occupancy, but the rents are also doing quite well in terms of growth. But equally important, if not more, is really the quality of our tenant has really improved in the last one year. You know that we had a lot of P2P at the beginning. They are willing to pay high rent. Hey, you're willing to pay the high rent, I welcome you. But we also know the risk that's involved, and government cracked down, a lot of them went bust. Who's replacing them? UBS is replacing them. Bank of China is replacing them. Some of the biggest life insurance companies in China is replacing them. Some of the top accounting professional firms are replacing them.
It's pretty good. I'm encouraged.
Do you want to read out those names amongst us here who have not come to our office yet?
Okay. Coleman.
Thanks. Justin from Coleman. I guess a follow-on, you also kind of mentioned in the statement that the expansion of occupancies for malls outside of Shanghai would be one of the key focus for this year. How are you going to achieve that? Would it be something like you think there are some green shoots in Shanghai, so you think there will be some spillover into secondary cities? Would it be the fact that you want to, say, revamp the trade mix massively or negotiate much lower lease term or what kind of rental rates? What kind of strategies you have in mind that you want in order to achieve these high occupancies? Thanks.
It may very well be said that you can use a lot of leverage because people want your Shanghai space on the retail front end. Therefore, you must get into one of the malls. But actually, the tenants are sensible people, too. They will have their own books to look at, and they won't just listen to what you suggest. Of course, we can say whatever we like, but obviously, they have their own minds, too. More practically, we have strengthened our leasing team. There's a very strong central leasing function now established in head office, and their job is to coordinate all these needs, and they talk to various possible tenants. They include, for example, tenants who are never in China. Tenant number one. Number two, tenants who are in China, but not necessarily in the mall in our city or in our mall in that city.
Number three, where there are cyber tenants who can actually come down and become physical brick-and-mortar tenants. So actually, we have a very clear plan on what we should be aiming at, how we approach that, and how we measure our performances. So far, actually, there's been some very good progress on that front. Because actually, it is very important that we refresh our tenants and enhance the good tenants because they are really the content of your retail, and that's what we're doing. At the same time, the local teams are actually being reviewed and strengthened, and obviously, they're given targets on how do you manage the occupancy rate as well as the lease rental levels. We have very tight measurements and methods actually to monitor and strengthen that.
If you look at some of these malls, because of these dedicated efforts, many of them have grown in occupancy rate in the year 2016. Many of them actually are saying, or several of them are saying, "Actually, we have no real major concern that the occupancy will drop significantly in the coming year." That's what they say, of course. Later in 2017, we'll be monitoring what they tell us. But one or two have actually shown interesting prospect. The one thing I want to emphasize is Shanghai in the mainland. Now, if you look at Plaza 66, obviously, the occupancy rate obviously has come down a bit. That's because of renovation, as just mentioned by Ronnie. We should be opening the basement. We have just opened the basement this week, as promised, before Chinese New Year.
The rest of the mall basically will be in operation, all of it, very soon. The office tower one basically has been completed. Office tower two is actually undergoing upgrading. Everything is on schedule, and therefore, in 2016, I would expect a better result. Sorry. In 2017, I would expect a better result than 2016. Obviously, Grand Gateway will be impacted by the renovation, which will begin in the second half of March.
We have a question from the webcast here. What are the cap rates adopted in the valuation? Can I have Hau Cheong?
They are the same as previous years. For the malls in Shanghai Plaza 66, it's 7.5%, and Grand Gateway is 7.75%. All the other malls outside Shanghai is 8%. There's no change in cap rate whatsoever between the years.
Thank you. CLSA, Nicole?
Yeah, I've got a few questions. The first one is about Plaza 66. I think you said that retail sales were up 16% year-on-year, ex that basement area. But could you break it down into first half, second half? Because I noticed that your rental income was actually down 7% in the first half, but only down 5% for the full -year, which means acceleration in rental growth in the second half.
So regarding the half-on-half, right?
The retail sales number for Plaza, is it?
Yeah. Year-on-year for first half 2016 and second half 2016.
Someone will have to answer that question. I don't know the first half versus second half. I only know it for Hong Kong. But the numbers you cited are in HKD terms, the -7%, -5%. Because of the -6% devaluation of RMB. So, like for like in RMB terms, it was okay. It's not -7%, -5%.
You've got a revaluation loss in two of your China properties. What percentage of revaluation loss was it for each property?
It's around 8% to 9%.
The third question is, how is your Hong Kong retail sales in your Hong Kong shopping malls doing, in terms of different segment?
[inaudible]I don't think we have the breakdown for Hong Kong retail sales. I would, in general, describe as flat for Hong Kong retail sales number. Answer your question regarding the Plaza 66 retail sales half-on-half. In fact, our second half compared to the first half was up 15%. You see that the second half really strong in terms of our retail sales number.
Particularly during the last quarter of last year.
Yeah.
So half -on -half is .
Yes.
That's even though having your basement area not opening yet?
Correct.
Thank you.
Is this same-store sales?
Yeah, the whole mall.
Yeah, same-store.
Yes, correct.
Any other questions?
Hong Kong is the opposite. The first half of Hong Kong did better than the second half.
The second half is.
Yeah. Is that what you find in other companies? Second half worse than the first half last year.
I think the retail.
You agree, Cliff?
Any further questions?
Catherine from Macquarie. I have a question. What is your CapEx plan for the remaining projects under development in mainland China, and what is the plan now for the development progress? The second is that, how about for the Plaza 66, even when the retail sales growth and completion of AEI, and for the rental reversion, what is the performance for that one, and what the future or the pre-leased one after the opening of basement? Thank you.
I answer the question on the CapEx.
CapEx, yes.
The CapEx for 2016 was only HKD 2.5 billion, which is relatively low compared to a normal year, for the reasons that both Kunming and Wuhan had a significant change in the local fire regulations that necessitate us to change and modify the design of the properties under construction in Kunming and Wuhan. Overlooking the next few years, our CapEx will still be running at about HKD 5 billion-HKD 6 billion each year. And mainly because of the construction of the Kunming and Wuhan's shopping mall, offices, and apartments, together with other bits and pieces.
Yee-Lai.
Maybe I will add on the development plan. Basically, it is still full speed ahead. Kunming, Wuhan, we are still moving ahead as planned. And in Wuxi and Shenyang, where we have second phases, we are also moving ahead as planned.
There is a question here from an investor overseas. Do we have any plans to sell Hong Kong investment prop, which have lower yielding properties?
Not for the time being. The company has very low gearing at this point in time. Our gearing ratio is only about a bit over 2%.
2%.
Just over 2%. We see absolutely no urge to really go for desperate funding. I think, really, Hong Kong assets are still quite valuable.
Thank you. Eva, UBS?
Yeah. We just want to understand a little bit about Grand Gateway renovation. We understand it will start in second half this year. Just want to know how long would it take to complete. We know that your friendly peers is completing another big mall there, but not now, but a few years from now. What is the impact of space that will be refurbished during the period of renovation?
The impact will actually be on the whole mall. We are redoing virtually the whole mall. Of course, they will be in operation during the time, just as we have kept Plaza 66 in operation as well. We do expect an impact to business. But at the same time, we are doing what we can to minimize that impact.
Ronnie?
Actually, its impact on Grand Gateway's business had already been started. As you can imagine, we communicated clearly to our Grand Gateway tenants that the mall will be going into a major renovation. So we renew some of the leases in a very short term, so on and so forth. That is why the rental growth of the Grand Gateway Mall in 2016 is only 1%, even under that kind of circumstances, okay. I think the entire renovation of the mall will run for about 30 months. Right? We do it bit by bit because we cannot do all this major work during the normal business hours. That is why it takes such a long time to complete the renovation by phases.
Also, you may like to refer to the announcement on page five, we also stated that about 28% of the leasable floor area of the mall will be closed in phases for the renovation in Grand Gateway.
The renovation will begin end of Q1, not second half. It really takes 30 months?
It's going to be by 2019.
Huh?
It's a huge thing.
I thought what the report I read from you guys was less, but anyway.
Ultimate facts.
Please use the mic. All right. Any other questions?
Anyone saw the Plaza 66, new Plaza 66?
The new one.
Some of them.
You saw it. Good. I hope you bought that too.
It is good, huh? Yeah, I think it is very good. I think the Grand Gateway 66 one is even more extensive, whereas 13% was closed in Plaza 66, it is going to be 28% in Grand Gateway 66. So, in that sense, it is a little bit even more painful. And the luxury goods, thank God, was quite strong in the last year while we are doing refurbishment. And as a result, the whole mall was still able to up the rent and so forth. Not just for the like for like basis, even covering the rent growth was enough to cover the part that is not in operation and yet still produce a slight growth. But Grand Gateway 66 may be a slightly less pleasing situation. I think the end result will be beautiful too. But I think the process will be maybe a little bit more complicated.
After all, the mall is 2 basis points some times bigger than Plaza 66.
I will add that the feedback from the tenants and the customers, as well as the office tenants, has all been very positive. So far everyone is very happy with what we have done.
Don't you think that you should buy more then?
One question here is, any chances for share buyback?
I think the company is, first of all, the company is operating in China, and China is the ultimate growth story. I know that India is growing very fast, too. I know that Philippines has been growing very fast in the last 12 months. But those are much smaller markets, and China is a really huge market that is growing at a very fast clip. Consider the fact that I think last year, this is one study I read. I do not know how accurate it is. But it says that private consumption grew by 10.4% last year, whereas the two years before that, it was 9.3% or 9.5% or something like that. Even the overall consumption is picking up. We are operating, we are just fortunate to be operating in a very good market. We think that there still are plenty of opportunities to grow.
I do not mind having more capital rather than a buyback, which has the opposite effect. Obviously, we are not going to have share placement or anything like that anytime soon, given today's very weak share price. We do not need the money. We are 2.1% net debt to equity ratio. Do not count on buybacks. But Hang Lung Group-
Group has been buying.
-have been buying Hang Lung Properties. We are now at 55%.
Yeah, 55%.
We have been going from 49 point some percent now up to 55%, all within what? two and a half years?
When you look at Hang Lung's financial positions, you may also like to bear in mind that over the past six years, we have built out six major malls and two Grade A offices. Altogether, we spent more than HKD 30 billion. As of the year end last year, we still have such a low net debt situation and gearing. That shows our financial strength, which would enable us to continue to build out all our other projects in mainland China, together with whatever investment opportunities that may arise.
In view of the time, we can allow two more questions. One already here. Will Hang Lung become a pure rental company after all flats in Hong Kong are sold? In other words, are there any plans to also refurbish land bank in Hong Kong?
There's a Chinese saying, or at least a Cantonese saying, "A lovely young lady changes all the time." We do investment property, and we do property for sale. It just so happened that we perhaps are entering into a phase where we finish selling off all the property for sale. That doesn't mean that tomorrow we will not pick up some other opportunities here or there, more like in mainland China, or we already have a couple of thousand units that are not yet built inside mainland of China. We have Forum 66, and Center 66 in Wuxi is also coming on pretty fast, the phase two. We're building the second office tower, but there is still another piece behind. We can build anything we want there, basically. We have Kunming and we have Wuhan, which all have a residential element to it.
If for the next, call it two years, three years, we finish selling up all the property for sale, that doesn't mean that we are going to be a purely rental company forever. We may build out and sell some of the residential in the mainland of China. At that time, we will become, again, a dual aspect company. But I think when I say that we change over time, it's a very rational one, and it's very easy to understand. A very transparent one.
Okay, any last question? Nicole?
Just to understand, is second half sales acceleration a one-off phenomenon just in Plaza 66, or do you see it in your other malls? That's number one question. Number two question is that your operating margin for your China rental business has come down a bit.
What business?
China rental business. The operating margin for China rental business has come down a bit. That is probably a bit of Plaza 66 and Dalian. Is that operating margin going to improve in FY 2017? Thank you.
Let me first of all supplement some information regarding half-on-half retail sales numbers for different malls. I would generally describe that they are all up, not just Plaza 66. On average, they are talking about high single digit to about 10% up for most of the malls. In general, second half, the retail sales numbers are pretty promising for all the malls in China. Thank you.
At this point of time, I do not see there would be much change in the mainland's overall leasing margin. Particularly, our emphasis this year is to further enhance the occupancy rate of various properties. That should also help the leasing margin too.
Okay, thank you very much. That ends the analyst presentation.[Non-English content] Wish you a wonderful year ahead and a very healthy. Thank you.