Is coordinating this year. We don't have typhoon or black storm black ring storm to interrupt. As in previous years, I'll begin by sharing a summary of our financial results and business performance. After which, our senior management will join the q and a section. Let's start with the group's financial review.
Please note that all figures are in Hong Kong dollars unless stated otherwise. For the year ended thirtieth June twenty twenty five, the group's underlying profit amounted to about 21,900,000,000.0, which increased by 0.5% year on year. The amount increase is primarily driven by high underlying profits from sale of trading and investment properties as well as lower finance costs, which partially offset by impairment provisions of four development properties. Including a net effect of revaluation loss of around GBP 700,000,000.0 on investment properties and fair value gains of around GBP 1,800,000,000.0 realized on sale of investment properties. The reported profit was GBP 19,300,000,000.0, an increase of 1.2% year on year.
The underlying earnings per share was up 0.5% to 7.54 while reported earnings per share was up 1.2% to $6.65 As for dividend, the Board of Directors has recommended a final dividend of $2.80 per share. Together with the interim dividend of 95¢, total dividend per share for the full year will be CAD3.75. Moving on to the profit breakdown by segment. The Group's Property Development profit increased by 5.6% to around GBP 8,300,000,000.0 mainly due to higher contribution from the Mainland. On Property Rental, the group's net rental income decreased by 3.2% to around GBP 18,400,000,000.0, mainly due to a 3.5% drop in net rental income from Hong Kong portfolio and a 3.2% decrease in net rental income from the Mainland portfolio.
As for hotel performance, an operating profit of $615,000,000 was recorded from the group's hotel business, down from $615,000,000 in FY 2024. Profit from other businesses rose by 0.7% to around GBP 4,900,000,000.0. So altogether, the group's total operating profit for FY 2025 was down slightly to about GBP 32,200,000,000.0. On our financial position, as of the June, the group's net debt was GBP 93,300,000,000.0. The net gearing ratio was 15.1%, a significant improvement from 17.8% as at the December.
Interest coverage for the period was around six times compared to 4.6 times a year ago. The Group will continue its prudent financial management. As seen from the graph, we have further reduced our net debt as it comes down from its peak in December 2023. Net finance costs dropped by 24% year on year driven by lower debt and borrowing costs. During the year, Moody's upgrade the Group's outlook to stable from negative, affirming A1 rating.
The group will continue to maintain a stable base of recurring income. We will also make use of our quality brand and products to drive sales. The Group has raised sufficient RMB denominated funding to better align its asset and liabilities denominated in RMB. As of June 2025, about 55 of the Group's total borrowing were either at fixed rate or tied to RMB floating rates. We also achieved a well balanced debt maturity profile.
Let's turn our attention to the Group's different business segments. In Hong Kong, as at the June, the Group's total land bank was about 57,400,000 square feet of attributable GFA. This includes 37,700,000 square feet of completed properties and 19,700,000 square feet of property under development. Among the completed properties, retail accounts for 33% while offices accounts for 29% of total. For properties under development, about 13,200,000 square feet were residential properties under development for sale.
During the year, the Group added five residential sites with attributable GFA of about 1,600,000 square feet to its land bank. After the end of financial year, the group settled the land premium for our redevelopment in Changsha Wan, spending 460,000 square feet. Regarding land resumption, landlords in Hongshui, Keohachin area were resumed with a compensation of about 3,000,000,000 during the year. The corresponding gains have been recognized in FY 2025. Land loss primarily in Santeen and along the Lofton Lane Mainline will also be resumed.
Compensation of about $1,200,000,000 will be recognized in FY 2026. Next, let's look into Property Development business in Hong Kong. For the period, the Group's recognized property sales in Hong Kong increased at 6% year on year to $26,000,000,000 Major contributors of operating profit $3,200,000,000 included Yoho West Phase 1, the Yoho Hub 2 and Novo Land Phase 3B. Additionally, about GBP 2,200,000,000.0 of underlying profit were recorded from the disposal of Dynasty Court. Including this, the overall profit margin was 19%.
During the year, about 1,500,000 square feet of attributable residential GFA was completed. Contracted sales not yet recognized amount to GBP 35,600,000,000.0, of which around GBP 30,100,000,000.0 is expected to be recognized in FY 2026. Hong Kong's residential market show further signs of stabilization. Sales in the primary market has been active. The group achieved the contracted sales of GBP 42,300,000,000.0.
The major contributors included Kuala Lumpur Phase 1 in Kai Tak, Sierra Sea in Sidesha, Victoria Harbour 2 in North Point, Do You And You Ho West Phase 1 and Phase 2 in Tinshai Wai. In addition, the sale of premium units at Dynasty Court in Mid Level Central continue to receive positive market response. This map shows our diverse mix of new projects. In the next ten months, projects to be launched will include Saissa Residence Phase 2a And 2b, the completed units from the second phase of Kuala Lumpur Sky and Kuala Lumpur Harbour in Kai Tak, a project near MTR Chun Wan West Station and the first phase of a large scale development near MTR Kutong Station. Moving on to our Hong Kong rental portfolio.
During the year, the group's rental portfolio in Hong Kong recorded a gross rental income of 500,000,000.0, a decrease of 2.3 percent year on year. Overall occupancy remained stable at around 92%. There was a modest decrease in gross rental income from the retail portfolio while office market remains challenging. The Group's residential leasing saw a solid increase in revenue driven by higher rents raised and a full year contribution from Towne Place West Kowloon. Performance of the Group's Hong Kong retail portfolio was resilient with a stable occupancy of about 95%.
The Group proactively strengthens the competitive edge of its malls. This include exploring new opportunities with pioneering formats and refining tenants and train mix to bring novelty. We also develop close and long term relationships with tenants which helps with their retention. The group offers a diverse retail portfolio with distinct positioning which includes flagship and regional malls. To enhance shopper experience, we refine our tenant mix and shop layouts to introduce debut stores and popular shops.
More family and pet friendly facilities and services were introduced to our malls. We also offer innovative retail formats. GoPass Leisha, our sporting commercial complex is the first of its kind in Hong Kong. The Points, our integrated loyalty program has introduced a VIP program, The Points Go during the year. There was a steady increase in spending by active members and high value customers.
The new programs provide members with unique privileges by integrating resources from the group's malls and various businesses creating synergies. The Point Go members can now enjoy reservation of superfast EV charging services. Moving on to Office Rental performance. Despite the challenges, we maintain stable occupancy. Our portfolio benefits from flight from the flight to quality trend.
Key strengths include high green building standards, professional property management, excellent transport and comprehensive amenities. The occupancy of our landmarks, IFC and ICC was about 92%. Our expanding property investment portfolio will strengthen our recurring income base. Our highlight is the High Speed Rail West Kowloon Terminus development, which comes with high green building spec, a nature oriented design and wellness elements. It's Grey office towers called the International Gateway Centre IGC is scheduled for handover starting in early two thousand twenty six.
Policing is ongoing. A mall underneath IGC will introduce diverse lifestyle and F and B offerings. This project together with the Artist Square Towers project also under construction will create strong synergy with the ICC Cluster. In the next two to three years, the Group's recurring income base will be further expanded as new investment properties come on stream. In addition to West Kowloon developments, other projects include Kuala Lunen Sky Mall in Kai Tak, Scramble Hill in Kuntong and a commercial complex in Mong Kok.
Now regarding our property business on The Mainland. As of the June, the Group's land bank on The Mainland was 65,300,000 square feet of GFA on attributable basis. There were 21,100,000 square feet of completed properties and 44,200,000 square feet of properties under development. Among completed properties, 43 were shopping centers and 38% were premium office. Regarding our property development business on The Mainland.
During the year, the Group's recognized the property sales on The Mainland rose by 214% year on year to about GBP 8,400,000,000.0 mainly due to higher sale volume of residential units. Development margins were robust. As of the June year, about RMB8 billion of contracted sales had yet to be recognized. Most of them will be recognized in FY 2026. During the year, the group achieved the contracted sales of about RMB 4,000,000,000 on the Mainland.
Major contributors include the detached houses in Lake Geneva in Suzhou and new batches at Park Royal and Forest Park in Guangzhou. Over the next ten months, four projects will be launched on the Mainland. You may refer to the table here for details. Moving to our Mainland rental portfolio. During the year, the Group's gross rental income from the Mainland rental portfolio decreased by 2.1% year on year to about 6,200,000,000.0.
In RMB terms, it was down 1.9%. Incremental contribution from newly completed projects partially offset the drop in turnover rent of retail portfolio and downward pressure on office rents. For the group's integrated projects, they include the different components that are complementary to each other. The projects also enjoy convenient access to transport. An example would be IFC in Shanghai.
Thanks to our unique positioning and proactive approach. The retail portfolio saw resilient performance. Occupancy for major malls remained high despite competition. Our office portfolio is known for excellent building standard, great transport and professional management services. Office tenants also enjoy comprehensive amenities offered by the group's mall and hotels within the same integrated complexes.
Our property investment portfolio on the Mainland will be further expanded upon the completion of a landmark project ITC in Shanghai. The remaining portion of three ITC will be completed later this year. Office Tower A, which was completed earlier, has ramped up its occupancy to nearly 80% contributing positively to the results. Shopping mall ITC Mason will open its first phase in the second half of this year featuring trendy FNB. A hotel and this Shanghai ITC will further enhance the variety of amenities within the complex.
The project will be linked to the surrounding community by pedestrian bridges and plazas enhancing its connectivity. Let's turn to our hotel business. During the year, the group's hotel portfolio in Hong Kong has seen improvement in room revenue and high occupancies. The changing spending pattern weighed on the revenue from F and B. Operating profit of this segment decreased at 5.4% year on year to $615,000,000, down from GBP $650,000,000 in the same period last year.
As we mentioned earlier, our new hotel enters Shanghai ITC will open at three ITC late this year. Moving on to ESG initiative. The Group's commitment to ESG is well recognized by the industry. For example, the Group's MSGI ESG rating was upgraded to AA during the year. In other highlights, ICC become the first building in Asia to secure a top green search.
The group also provided rent free space for operation of a community living room. GoPak Saishan was officially launched earlier this year. It served as a venue for charity events and also allow families to spend quality time with their kids and pets. A new destination, Mile 11868 has opened to the public. Our next session is the market and business prospects.
On market prospect, globally, the environment is expected to remain volatile and uncertain. Monetary easing by major economies and higher chances for US interest rate cut will favor economic growth. In Hong Kong, an active financial markets and a growing tourism industry will drive moderate economic growth. With rising home rents and expectations of lower interest rate, buyer confidence and transaction volumes in residential market are expected to continue improving. For The Mainland, the economy is expected to maintain steady growth with proactive fiscal and monetary measures.
Efforts to drive high quality development and opening up will build resilience. Supportive policies will help drive consumption. On our business prospects, the Group will build on the solid foundation and continue with prudent financial discipline. It will maintain a sizable and stable base of recurring income from rental and non property businesses by the following strategies. The Group will adopt a proactive leasing approach to strengthen its competitive edge.
We will cultivate long term relationship with tenants and customers. Also, we will strive for incremental contributions from newly completed projects. In Hong Kong, our new projects include Kuala Lumpur Sky Mall, Scramble Hill and High Speed Rail West Kowloon Terminus development. In Shanghai, we have three ITC. With our premium brands and products, the group will aim for high asset turnover in Property Development business.
We will continue to launch new project for sale when ready. We will review our portfolio regularly to enhance returns and asset turnover. To conclude my presentation, I would like to highlight this passage, which is an excerpt from the Chairman's statement. In navigating through the current economic transformation, the group will build on its solid foundation and extensive experience while adhering to prudent financial discipline as always. With strong execution capabilities, the group's management and team will put into practice is long standing principles and time tested strategies to strive for sustainable growth while exploring potential application of AI to better understand market trends and further enhance both efficiency and service quality.
Leveraging its strong financial position, the Group is able to make investments for its long term development when opportunities arise. As in the past, the Group will continue to support the city's evolving needs and build properties that prioritize quality of life for all. This is the end of my presentation. Thank you.
Thank you for joining today's briefing again. Let me first introduce the panel members. Starting from your left, mister k w Lowe, member of the executive committee. Ms. Maureen Feng, Executive Director.
Mr. Alan Feng, Executive Director. Mr. Christopher Kwok, Executive Director. Mr. Victor Loy, Deputy Managing Director Mr. Raymond Kwok, Chairman and Managing Director Mr. Mike Wong, Deputy Managing Director Mr. Adam Kwok, Executive Director Mr. Eric Tung, Executive Director Mr. Frederick Lee, Group Chief Accountant. I would now like to invite Chairman and Managing Director, Mr. Raymond Kwok, to share the key messages from today's results announcement. Mr. Kwok, please.
Thank you. Good afternoon, ladies and gentlemen. Thank you for joining today's briefing. Let me highlight our key developments and strategy. During the year, the group maintained stable business performance despite an uncertain global economic environment.
Over the past six months, Hong Kong's residential market showed further signs of stabilizing. During the year in attributable terms, the group recorded contracted sales of about billion in HKD. This is the highest level over the past five financial years. Major contributors include Kadinan Sky phase one in Kitek, Sierra Sea phases one a two and one b of site of Seysha Residences, Victoria Harbor 2 in North Point, and Yoho West Parkside atop Tin Wing Station. In addition, the sale of our luxury units at Dynasty Court in Mid Levels Central continued to receive a positive market response.
As residential market sentiment improves, we would continue to pursue high asset turnover in our property development business. In July, we launched Novo Land Phase 3A in Tin Moon and achieved an encouraging sales performance. Over the past ten months, the group will launch the completed units from the second phases of Kuala Lumpur Sky and Kuala Lumpur Harbor in Kaietek. We shall also launch other new residential projects including Sai Shah Residences Phases 2a and 2b, a project near MTR Chinwan West Station, and the first phase of a large scale development near MTR Kutong Station. Sideshaw Residences is a prime example which showcases our strength in delivering large scale integrated projects, landing nature with modern living.
The project offers wellness, family and pet friendly features. Also comes with comprehensive facilities like the sports and commercial complex Gold Park, Sai Shah nearby. Sales of Sierra Sea was very encouraging and we achieved the highest subscription rate in recent years. This demonstrates the popularity of a coastal lifestyle among our Hong Kong people. For property investment business in Hong Kong, the overall occupancy of our rental portfolio remained satisfactory.
Despite the challenging economic environment, our office portfolio achieved a high retention rate and benefited from the flight to quality trend. The average occupancy of our IFC and ICC was 92% during the year. We shall continue to strengthen and expand the commercial hub in West Kowloon as another CBD beyond Central for the two projects now under development. First project that IGC offices atop the high speed rail wide West Cowan Terminus will be ready for handover to tenants starting in early twenty twenty six. And the second one, construction of the Artist Square Towers project next to the M plus Museum is underway.
These two new projects together with the group's ICC and our hotels on top of Kowrin Station will form a prominent commercial hub with a GFA of over 7,000,000 square feet. For our retail portfolio in Hong Kong, our malls maintained high occupancy during the year by refining the tenant mix and embracing innovation. The drop in tenant sales has narrowed in the first half of this year. The Point, our mall loyalty program has recorded a steady increase in spending by active members and our high value customers. Meanwhile, we recently launched the Point Gold VIP program to reward these high value members to enhance their loyalty.
Looking forward, our retail portfolio will be further expanded when new projects come on stream. First one, Scramble Hill, a shopping mall near APM in Kuntong will start opening in phases. This new mall will create synergy with both our APM and the group's office clusters in the Kuntong area. The second one would be the Kuala Lumpur Sky Mall in Kitek. It will open in phases starting from the fourth quarter of this year.
Moving on to our Mainland business. During the year, our group launched detached houses from Phase two of Lake Geneva in Suzhou, which quickly was sold out. For the rental portfolio, the group has proactively enhanced its services and tenant mix. Major malls continued to achieve high occupancy, while our premium office portfolio maintained its competitive edge to ride on the trend of flight to quality for our tenants. In the year ahead, the completion of three ITC in Shanghai will mark a major milestone for the group's Mainland business.
The remaining portion of the project includes the office skyscraper Tower B, the flagship mall ITC Maison and the Hotel Enders Shanghai ITC. Construction has come to the final stage and this project will be completed later this year. Looking ahead, as the Hong Kong economy undergoes transformation and active financial market and a growing tourism industry will drive moderate economic growth in the near term. With the support of the motherland and under the framework of one country to systems, Hong Kong will continue to attract both talent and capital, serving as a springboard for Mainland enterprises to go global. The group remains confident in the long prospects of the Mainland and Hong Kong.
With our solid foundation and in line with our prudent financial discipline, the group is well positioned to make investments for long term growth when opportunities arise. In addition, we shall review our portfolio regularly to enhance returns and improve our asset turnover. As always, we should continue to support the city's evolving needs and develop properties that prioritize quality of life for everybody. Thank you.
Thank you, Mr. Kwok. Now we open the floor for questions. So before you raise your questions, could you please introduce yourself and your company? So may I have the first question?
So the gentleman in the third row in a black blazer on the third seat.
Thank you very much. This is Karl Chen from JPMorgan. I have four questions about the residential market. So my first question, it's about your outlook for the Hong Kong residential market. Do you think that the market has bottomed?
For the pricing strategy, I think for the recent launches by Sun Hong Kong, think that the pricing has still been rather conservative. So just wondering, for our upcoming launches, do you think you'll get more aggressive in terms of pricing, especially for Koolen and Sky in Kitech? So that's my first question. And the second question is, what's your contract sales target for Hong Kong DP in the financial year 2026? And, do you have any colors on how your launch plan will be, for Sideshot as well as other major Hong Kong residential market, projects for 2026?
So that's my second question. And my third question is on the upcoming policy address. Do you expect any further policy support measures from the government? I think recently there has been more speculations on how the government may do the property con next, right? Or maybe easing in a stamp duty.
So from your perspective, what kind of measures do you think the government might introduce, in the policy address? So that's my third question. And my last question is on land banking. Just curious, right now, what's your land banking appetite? What's your plan?
Any preferences in terms of geography or sector? So say for example, are you interested in reinvesting more in commercial or your focus on reinvestment will still be mostly on residential? So that's my four questions. Thank you.
Yes. On the residential market, although the hyper rebounds recently, I think the trend of low interest rate will continue backed by the possible interest rate reduction in this month or end of the year. And due to the influx of talents and students, we have seen that residential rents are wise and quite rapidly in the summer and the trend is continuing. This will induce a lot of renters becoming home buyers. We have also seen a lot of common cases on positive carries, especially on the new projects that as the monthly as the rental collected is exceeding the mortgage payment.
They will also attract more investors buying an apartment for rental purpose. Adding to the robust performance of the stock market, I think the residential market will continue to do well in the rest of the year, while our inventory level is dropping continuously. We can absorb 1,502 units per month. So all these factors are supporting that the market is now proceeding to a bottom up situation very soon. Regarding Sierra Sea, you may aware that we have an overwhelming sales earlier this year.
We have collect a total registration of over 40,000, which is a record in the public history in Hong Kong. The project is a very unique project, blending with leisure and beautiful environment and also we have comprehensive facilities, also we have coastal scenery. The prices we achieved for the first phase is good and reasonable. I think we can have some room to increase our price when we market the second phase in the first quarter of next year. Regarding on the sales, we have a very good take up on local land in the past two months.
And in the next ten months, we shall have a number of projects to be launched namely Phase two of Kulin and Sky and Kulin and Harbor, both on complete projects. In earlier next year that would be Sierra Sea Phase two, also with our Kinmen residential project, which is close to the West Rail Station. In the middle of the year, that would be our Phase one of Kutong project, next to the future station. So you can see we can have quite a number of projects to be launched. We have good sales in last financial year over RMB40 billion, which is exceeding our target.
For this year, we set our target of RMB30 billion mainly due to the fact that there may be some uncertainties of P cell consent approvals for some projects. Certainly, we hope we can get all our sales concern on time so that we can book more revenue on sales later. On margin, I think every developer have their own sales strategy considering their lending position, financial position. For us, we are always trying to aiming at a quicker turnover on mass project like local land, Yoho West and for luxury project, which are normally difficult to replace, we shall dispose our units at our pace. Having said that, we have sold quite a number of units in Victoria Harbor and Dynasty Court in the past few months.
They are at very good margin. In fact, the coming months, we shall have two luxury projects in Kaietek that is Kulin and Sky and Kulin and Harbor. We are very confident that we can still create a lot of eye catching transactions when we market these two projects in the coming months. On the government policy, I think it is not easy to predict whether there will be any supporting measure on the potential market. But the closed loop public connect and also the relaxation of stamp duty under discussion will certainly benefit the residential market.
Recently, the relaxation of stamp duty to $4,000,000 did attract the secondary market a lot. If the relaxation can extend to $5,000,000 or even $6,000,000 I think that would also create additional transaction to the primary market and also strengthen the public letter for replacement and also upgrading. On land banking, we're very happy that we can acquire three beautiful sites in last financial year. Both Silhouette Union and the Taiwan side are situated very close to the MTL station and located in a mature community, while the Dongchong side is putting the coast with Panorama Seaview. We have also acquired two sites through land exchange and premium negotiation that is the Feng Neng Loft and also the Hong Seo Q site.
Both can be redevelop into small to medium sized units, which are very suitable for today's market. As for commercial size, I think as you know, we have some sizable integrated project on hand still under development. So at this moment, we shall focus our service and on the execution of this project. Thank you.
Thank you, Mr. Loy. So could I have the second question or the gentleman in the third row at the second seat? Thanks.
Yes. Thank you. This is Christian from Citi. So I have four questions. The first one is on investment.
So giving a lower gearing and as far as the lower interest rates, we will see more room for more active investment this year. How would you prioritize between new investment, paying down the debt or the shareholders returns? So the second question is on dividend. Would you consider to change your dividend policy, for example, to a more aggressive dividend policy or paid out ratio based on the recurring income base? And what is the management view on the buyback, on the share buyback?
The third question is on the interest cost. So given the recent Hypo move, how would you adjust your financing strategies? And how much do we expect for the lower interest cost in financial year of 2026? The last one will be on the land, the land investment. So how would you allocate the land investment between government option as well as on the farmland conversion?
Yes.
We I think we'll just wait for the right opportunity. I think for the moment, as you noticed, we have been paying down our debt and improve our liquidity and debt ratio. So at the right time, at the right moment, we'll well, I think for the past twelve months, we'll be already buying residential land, right? So I think for the moment, we'll focus on buying residential land, but has to be the right location and has to be the project has to be sizable enough, yes. Your second question is on the dividend.
I think we've always been telling the shareholders that we'll be paying 50% of the underlying profit, right, which we are paying this year, 50%. So we won't consider any buyback because at the moment, I think it's important to keep our dry powder and so that we can buy at the right opportunity. For interest cost, I think for $2.00 $2.04 $2.00 5, we are paying 3% overall, right?
Right. Interest cost has been reduced from 4.4% last year to 3.7% this year. That's right.
And 60% are either fixed rate or R and D, right?
Right, yes.
So I think that seems to be a good ratio, yes. On the land acquisition, I think we don't really distinguish between buying from auction or buying from private individual or buying from farming conversion. Of course, holding of the agricultural land, we would hope we can convert more to residential. We always wanna buy agricultural land for ultimate development. And but if the government really wants to speed up, think, of course, we'll we'll comply with their wish. Yeah. Thank you.
Thank you, mister Kwok. So could I have the third question? So the gentleman in the third row, the second seat in the blazer.
Thank you, management. This is Mark Leung from UBS. I got three questions. First of all, is regarding on the 2026 earnings. Just want to check with management what is our thoughts on next year earnings.
You mentioned we focus on asset turnover and also not sure what kind of capital recycling plan we are targeting in next year. And also what is the long term growth for Sennong Kai? Yes, I think that's the first question regarding on earnings and capital recycling. Secondly, will be on the Hong Kong retail. So can we check about what how sustainable do you see for the recent Hong Kong retail sales recovery?
What kind of rental reversion we achieved it in previous months and also our outlook for that one? And also on the leasing strategy side, because we still have some threats coming from cross border online e platform as well as maybe outbound travel. So keen to hear your thoughts about that. Lastly, maybe on the Mainland side. So what is the preleasing rates for Shanghai ITC?
I think one of our anchor tenants has been moved out. So what is the replacement plan for the ITC? And also on the ITC retail part, any colors on the preleasing and also maybe some housekeeping on the IFC tenant sales and reversion? Thank you.
The only answer Yes.
I'll answer that question on the retail market first. I think the retail sector has seen major changes and challenges over the past two years. But I think the correction in retail sales at our malls has been narrowing down. And so is and the occupancy costs have remained stable, while the rent reversion is largely in line with the overall market. And as you have said, there's been we think there's been signs of improvement.
And indeed, over the summer holiday, tenant sales at our malls have continued to improve. And from January to June of this calendar year, our malls have performed slightly better than market in terms of the retail sales. In terms of the momentum of this improvement, I think there are a few factors that are reinforcing this positive trend. One is that the there's an upward trend in the stock index. The IPO market is quite strong.
Usually, that leads to wealth creation and benefits consumption. And second of all, the resumption of the multiple entry individual business scheme, I think that has led to we've observed more Mainland visitors at our shopping malls, and we hope that if the government can expand that to more cities beyond Shenzhen, that will be a big positive for Hong Kong. And finally, Hong Kong in the past half year or so has placed has played host to an increasing number of successful mega events, which has brought in more tourists. As I'm sure all of you are aware that over the past two months, there have been a meaningful increase in tourist arrivals, and we attribute that significantly to the increase in number of mega events. So these are all positive factors to the retail sector in Hong Kong.
And for us, I think we continue on the operations side, I think we continue to work on refining our tenant mix by refining the redesigning our shop size and layouts to bring more popular shops, including kind of Mainland and Japanese F and B brands, which are first to Hong Kong and in our malls. And we also make sure that most of them will have strong track records in Guangdong and in our malls in China Mainland China, so also leveraging our network in Mainland China. We also try to continue to improve our customer experiences, for example, by introducing more family and pet friendly amenities and making better use of the open spaces at our malls. We're also experimenting with newer retail formats that combine shopping and lifestyle elements, such as our new spotting complex Opak in Saixa, which opened earlier this year with strong success and which I encourage all of you to visit when you have the chance. Yes.
And in terms of the IFC Shanghai, our Mainland portfolio, think overall consumption sentiment in Shanghai have shown meaningful improvement this summer. And for our Shanghai IFC malls, we have seen strong recovery in sales starting June year, thanks to introducing of new tenants such as Laopo Gold and also the continued expansion of some of our luxury retail tenants. I think right now, the environment, I think, in Shanghai is that tenants are generally more cautious about expansions, but they are also similar to the office market. There's a flight to quality, right? So they go to shopping malls that are located in prime CBD locations with good transport connectivity, and they also like to stick with landlords who they can trust.
And I think we believe that our experience operating malls in Shanghai and also in the Greater Bay Area region have enabled us to gain the trust of these brands. So we are able to leverage this relationship, right, as you can see, both in our Shanghai IFC Mall, which actually, in the next year or so, we have plans to convert some of our maybe some of our hotel spaces into for retail uses, right? That's being discussed closely with our tenants. And also, I think this we have also for managing IFC Mall as well that has kind of bringing in Moby Du Wei in Shanghai and expanding that to other cities in Mainland China. So we're confident that we can keep up that.
Of course, have to work hard, right? But I think so far Mainland China sales have recovered and we've we've been working hard. And then also, think, going forward, I think, again, for on the on the broader macro side, I think retail such in China also have some positive factors, right, especially because the central government has been has rolled out different measures to advance the opening up of the market to foreign visitors and also to stimulate the domestic consumption. So if those are to continue, right, I think the trends are of stabilization and growth is there for Mainland.
Okay. KGB, would you like to answer on the Shanghai office here?
Yeah. Our, you know, Shanghai ITC project is progressing. The construction of that, the the tallest tower is progressing with full steam, and it will be ready by the end of this year. And you may notice that the Tower A has already been completed, and we are now at around 80% occupancy. I mean, this is a is a good proof of, you know, the resilience of, you know, our quality project and is superior quality as well because of the you will look at the connectivity, you know, the amenities.
And also, we're gonna have a hotel, and this hotel going to be open later this year and the big shopping mall. And these all that, you know, will, underpin the future success of our project. Now Tau B, as I said, is in full steam and will be ready. And we've been talking to a number of big users in particular who have shown great interest and, you know, of the project. And and about the departure of, you know, one of our tenants there, you know, I'm pleased to say to let you know that, you know, we've been already, you know, in in talks with a couple of SOEs and big corporations who are looking for either on block or at least, you know, a significant portion of the block.
So we are confident that the leasing of the space will take shape and we'll be welcoming, you know, new tenants for that block in the very recent future.
Barry, I think on the I ITC towers, right, we we would like to just share with you that the two towers are just on top of the railway station, and the hotel is just adjoining. It's a very good location, comparable to our IFC Hong Kong, like hotel and two office towers on top, right? It's very good for tenants that require that would like to accommodate their staff for easy access, They don't need to walk fifteen minutes in the open air to get to the office, right? So it's a very prime office and this is the kind of integrated project that we would we are building. Right?
So hotel plus good access for the staff for for MTR. Right?
Yeah.
And so, actually, we are just just combining all the our experience, right, into this ITC project. And by the way, you know, we were in Shanghai two weeks ago. The risk counting was completely full. So I haven't seen so many foreign faces in our risk counting. So clearly, the foreigners are coming back.
As you know, when the foreigners come back, they can see Shanghai and even Tianjin is a Tier one city, right? It's better than a lot of the Western financial centers, right? It's so well developed. Anyway, so once they are in, they will know that China is back, yes. So I'm happy to say, I think the ITC will come out at the right time, yes.
Yes.
But on the on your question about the earnings, I think we can't forecast our earnings too publicly. But I could say our recurring income skip on rising because we are building 3,000,000, 4,000,000 square feet on the IGC project, right, on the office and on the retail. So we can assure that over time, our recurring rental income will go up. And also we'll be acquiring land at the right time. Of course, we are waiting for the right time to buy land on residential, yes.
So please be assured that on the recurring income side, it will just keep on going up for the development profit for sale. We're just looking for the right opportunity to buy, yes. Maureen, would you do you have something to add on the retail side?
For the retail part, Sun Hong Kong has been in Shanghai for over twenty years. We with our partners, the brands up and down. So don't worry about the chain because they are now consolidating and come back. We talk to them. We're on the ground talk to them on daily basis about the global development and also the strategy in China.
So, for our more, we work in the tenant side for many years. So for this ITC Maison, we've all just opened about a 100,000 square feet, main main is the FNB to serve the population above. We are on the right path to roll our enrollment to catch the retail market in in China because we do see that in the this summer. Thank you for the central government have a lot of initiative including that of the and it could be a free visa, the test refund, all this initiative. We do see a lot of the foreign coming to to China and also spend a lot here.
So, it's a matter of time that we need to on the ground. We act proactively at the same time to micro management, every service in details to provide them a a to embrace them from the bottom of our user practice. So, for the coming ITC, Maison, do welcome all of you to come there and and shop there as a global landmark in Asia. Thank you.
Thank you, miss Feng. So, the lady in the third row, please.
Thank you. This is Cindy Lee from Citi. I have three questions regarding your Mainland China business. So the first one is on the general market comments. So how's your view for using Mainland residential market, specifically in the cities that you operate?
Second question is regarding your Mainland China product and land banking strategy. So we know the luxury residential sales in Mainland China Tier one cities are actually doing very well. So do you see this as an opportunity for Shanghai as you have been known for having doing strong in high end residential projects? And what will be your land banking strategy in Mainland China, say, in the near future? The third question is on C rate.
What do you think of the C rate market? Will you consider launching C rate to further capture the onshore opportunities? Thank you.
Sorry, what was your first question again? Sorry. Go ahead.
Your general view on the Mainland China residential market, especially the key cities that you locate.
Victor, would you Adam. Oh, okay. Adam. Okay. Yeah. Okay.
Thank you. Thank you. I think, obviously, you know that we operate in a lot of the major first tier or second tier cities. And I think you see in the market, especially this year, there's a more of a polarization, right, between the tier one and strong tier two cities versus the rest. And, thankfully, you know, as you've seen in our contract sales this year, we've thankfully in quite a bit of them.
Actually, if you I think the team has done a very good job in showcasing some of our properties here. And for example, this year, we have sold quite well our Suzhou Lake Villa, and they are independent Dudong, BSU, right? And so that has sold out what what we've launched 50 and it's sold out. And then, obviously, this year, we booked a lot of our Shanghai Arch Phase 3 residents, which gave us a lot of handsome development profit margin. So I think, thankfully, we win that.
And then next coming up, we encourage all of you to see is our Shanghai IFC service department. I think also our team has done a great, great job, and this picture here shows it is at the intersection of the Zhang and and the He, right, and and and Chen Hanjiang. And so it is a unique location, this picture doesn't do it justice. If you go up there and look at the view, it is spectacular. And I think it is perfect to capture the Hongzhou, especially the booming tech markets and all the four, six, eight dragons in there and all all of them, and all those, who work in there.
I think so thankfully, we're in a lot of these first year cities, and we'll continue to capture that. Of course, we also have some projects that are some minor ones in, say, Foshan, which we partner with our mainland developers that are still churning and doing fine. And so as you said, I think our and and then that answers your first question. Right? And so we'll actively continue to sell.
And the last thing we'll sell actually is our Shanghai Arch has these very beautiful last phase villas, and they're very rare in Pudong looking at the bun. And so Victor and the team will will launch it this year, and it is quite unique in Pudong. And so that answers the first question. I think your second question is on land banking. Right?
I think, as you see, we have a sizable land bank in Mainland already, and a lot of our focus now is on executing, not only developing it, but leasing it up well. Right? As you hear from our colleagues on Shanghai ITC, you know, Hangzhou IFC is also coming online and then, you know, Guangzhou also substation ICC is coming online. So I think a lot of our focus is gonna be on just, you know, developing, executing that well first. And then also, the last thing we will do is control the timing of our CapEx in China.
And for some projects that if the commercial demand or office demand is weaker than we expect, then we will face our projects to that and match the timing. So we could we will only build what we can lease up or sell. Thank you.
Yes. And on the Seaweed side, think we are not continuing at all. We're just focusing on just letting up all the properties now we are constructing here. Because frankly, the cost of borrowing in China is quite cheap, only 2% or 3%, right? So therefore, we'll just focus on finding good tenants for our properties. Yes. Thank you.
So thank you. Sir, could I have the next question? So the gentleman in the second row, please.
Thank you management. This is Raymond New from HSBC. Thank you for taking my questions. I have four questions, mostly in the Hong Kong business. So the first one is about the Hong Kong residential.
So if you look at the Hong Kong DB margin, I act actually has been contracting this for quite a while. So do you see the any signs of bottoming out given the improvement in sales?
Mhmm.
What's like the resi DB margin outlook here? And any signs of, like, potential rebound or actually, what would this like the level of stabilizing or normalized margin down the road? And looking ahead, given us by the good like the leveraging process here, would company prioritize the margin over the volume in the coming few years time? And the second question is actually about student accommodations opportunities in Hong Kong. So how's your view on the student accommodation here in Hong Kong?
And would you consider the converting some like residential units or commercial buildings into the student apartments here? And the third quadrant, it will be about, Hong Kong office. So with the, like, very vibrant financial affidavities here in the cities, How do you see the office leasing demand in your portfolios? Do you see that there will slight stabilization in the near terms? And can management also share with us what's the latest office rental reversion in the for this year and what's the expectation on next year? So it will be great if you can also provide some hints on the your the level of Hong Kong rental income for the office portfolio next year because there we are like quite a lot of new completions? And the last one is actually about the West Collins IGC project. Can management share for us like the policing status here and your target occupancy rate by the 2026?
And would there be any update on the retail portion that will be great? Thank you.
Yes.
Maybe I'll answer the first part on residential and cater on the second part. And as I just said, for our sales, we are always trying to strike a balance between our volume and margin for mass project like Lofo Land and Yoho West and even recently the CRC, we normally seek for a quicker asset turnover. But having said that, we have saw quite a large number of units in Victoria Harbor and Dundas Secord, they're producing high margin. And in the coming months, there are two very exciting projects in Kaita, the Kulin and Sky and Kulin Harbor. I think we can produce a lot of eye catching transaction too.
So overall, I think we can maintain our profit margin quite well in the coming financial year. Regarding the student apartment, due to the huge demand on student accommodation, we have seen that a lot of small units close to the MTR station are being sought after in the rental market. In our portfolio, we are also benefited like Town Pace West Kowloon and also the Alpha Hotel in Satin. Both properties for both properties, we can attract a lot of more affordable students and post graduates. The government have recently allowed the conversion of office building to student apartment.
I think this will only benefit what we call the crazy office building. Usually they are having a low rental, high vacancy and those better quality office building may not have the incentive to do so. And at the same time, I think to maintain a qualified conversion then they also involve a lot of renovation costs and CapEx. So the impact on this is yet to be seen on the office market. Thank you.
Can I just add on the student housing part? I think we have to look at the yes, we all know the non local students expanding, but we also have to look at the number of talents coming in. I think the rental market is way more than just student. And if you look at we actually, our team has made a very good list. Maybe they can share some public data of the past two years, how many people have come to Hong Kong.
Right? And this is not just student visas, but the top talent pass, the capital scheme, the you know, as you guys know, the IANG program, which is graduates staying in non local graduates staying in Hong Kong getting for job visas. And all this, each year, my team has made each year, we have already brought in around a 135,000 visas approvals. And I would say quite a few of them come to Hong Kong. Right?
So my team did a study. And from 2023 to now, so two years and a half, the total number of visa approvals among all these schemes, students, talents, capitalists, and all that is 328,000. So there's 328,000 who's come in. And as Victor was saying, a lot of the obviously, the very top end guys, some they will buy, but some they would rent from our very signature residential portfolio. But a lot of them actually rents in our town place collections.
And then then on top of that, we see a lot more and then on the, say, the students which are more price sensitive, actually, even students are not we cannot classify all of those price sensitive. A lot of them actually, Victor would add, have come in and bought apartment already. We could well, I mean, with help from the parents, of course. Right? And the property Konecksky maybe will even help them further.
And then on top of the more price sensitive ones, you see, you know, a lot of competitors doing it. Right? You see Sunny House by Wenglaon, you see others. But, we are also, actively converting some of our hotels to more long stay products, especially those near the universities. I think the hotels, if you add beds, if you, you know, give the students what they like, social elements, convenience, shuttle bus, and so on, well, our hotels will also become very popular, and it will also drive down our operating costs.
On the Hong Kong office with KW, would like
to Yes. Sure. Recent uptick in financial market activity has spurred a noticeable increase in office leasing inquiries. We see this is a very significant indication in the office market. And also Hong Kong's role as a strategic springboard for you know, mainland corporations, you know, expanding overseas.
This will and should bode well for the Hong Kong, you know, overall office market. As many of these, you know, companies would like to have a presence in Hong Kong, we are already seeing signs of them coming. In the second quarter of this year, we also have witnessed positive net take up. So we believe this is also an encouraging sign of, you know, which direction the market is going. We also have seen pretty robust occupancy rates, you know, in our premier, you know, assets like the IIFC and also ICC.
Both all these three buildings, you know, occupancy stay at around 92%. On the other side, we also see a demand, an expansion demand from financial services companies, including some government related institutions as well. And also, you know, the flight quality definitely is a, you know, ongoing trend we have seen, you know, in Hong Kong, but also, of course, you know, in other, you know, cities around the world. So with all these, you know, positive signs, we believe the market is beginning to stabilize, the office market. And I think, of course, we have to observe.
We will respond to the market changes, but we believe this is happening in Hong Kong now. On rental reversions, negative rental reversion definitely weighed on our office portfolio last financial year. There's no doubt. But, you know, we are pleased to let you know that we successfully achieved very high tenants retention as, you know, we did in the past. And I think this resilience is underpinned by the strong cost range of our portfolio.
Alright. Excellent accessibility, you know, meticulous property management, high green building standards, integrated retail and amenities, including hotels, integrated projects that we have, a couple of them, you know, big ones in Hong Kong. These all, you know, enhance tenants experience, you know, when they are in our office buildings. So we believe this is, you know, a very strong competence for us and we'll continue to going forward, you know, sort of improving, you know, our core competencies. I'll give you an example.
We are planning to upgrade our flagship hotels such as Four Seasons and Viscounting. These enhancement, when they are completed, we definitely, you know, elevate, you know, occupants, visitors, you know, and tenants, you know, experience as well because, you know, that will provide them with even better quality amenities, convenience, you know, for their business, you know, associates as well as their, you know, their guests as well. So we are very optimistic about the emerging, you know, positive positive trends we have, you know, witnessed, and that will, again, bring to broader market stabilization. So we see the future is is coming back, you know, in a very positive way, of course, gradually. And so, you know, this is a very good thing for, I think, every one of us.
Thank you. Yeah. Think, yeah, we are very positive towards the future of the West Kowloon. It's just Central 2, right? Where else in the world do you have office, museum, entertainment
Water.
House, water, water with a view of the sunset, right? So and well, it's everything there, right? In fact, it seems for the tourists that the number one destination is right? And therefore, there's a tool, museums and there's everything there. So I think Hong Kong will increase on their role as a wealth management center.
And therefore, I think we welcome more Mainland companies or mainland wealthy people to set up their accounts in Hong Kong, yes. Thank you. We don't want you to tell our competitors to steal our tenants. So on that very final stage of negotiation, I would recommend HSBC is going to set up a wealth management office at ICC.
In ICC, yes.
But you're fortunate enough to
move to IC And office, also in IFC as well. Yes. Right. So welcome HSBC. But if I may, on my point about the leasing progress as a whole, of course, don't I won't mention names, but number one, on the completion, I think this is important, I mean, for our already signed up tenants and all those coming to commit.
The lead the construction progress has been going on very well, and we are in the final stage of, you know, inspections to be done by various government departments, including fire services and also buildings department. We are very close to, you know, finishing all this. And I think we we can, you know, pretty we are pretty we can affirm that we're gonna gap the OP before the end of the year. So we're opening the door to tenants. On the leasing side, there's some of, you know, tenants some of the tenants, they prefer to see the real thing, the the building that's completed or now it's close to completion.
So these days, we've been very busy in bringing people to the site. So on one hand, we we ensure people going there, you know, safely. But on the other hand, you know, we don't want to interrupt any, you know, the ongoing, you know, final bit of the construction, not to mention the the inspection held by the government. But, anyway, we see momentum picking up. I mean, to our chairman, you know, you know, comment made earlier, you know, the the facility there, you know you know, it would definitely be a world class, you know, financial hub, commercial hub, and as well as, you know, well, know, wealth management center.
You know, globally, Hong Kong is kind of is set to be, you know, number one in the world in the very near future. So I think with all this and the facility, the green and everything, we believe the West Kowloon, you know, project, IGC in particular, and also ICC and AST project, we got over 7,000,000 square feet. Commercial space, got over almost 6,000,000 square feet. So that will become the Central District Of Hong Kong. Well, in fact, that has already been the case.
So we are further strengthening it by adding the two new members, which is IGC and AST in the very near future.
Well, in fact, for that location, where you are direct link to the airport to all the the high speed railway. Right? Actually, someone told me they are going to to Hangzhou only six hours by train, and you can still work on the train and still call your wife or call your boss, say you are still working.
Like statistics, Jim, statistics already show us that there are more people, you know, long haul, so we call it long haul, right, from Hangzhou or even Shanghai, they come to Hong Kong via the high speed rail instead of, you know, traveling, you know, on the air, which, you know, has a lot of uncertainties, delays, and and so on and so forth. So in fact, the connectivity of the West Kowloon, you know, district, you know, is superb. If you look at how many trading lines are, you know, running through that, you know, neighborhood, you know, and also the different parts of Hong Kong, of course, and then regionally, you know, through XRL or even, you know, globally, you know, by taking the the airport express, you know, which is only, you know, less than thirty minutes away from Moscow Road. So with all these, you know, we strongly believe we are confident that location, will become the world class and Hong Kong's second CBD as Chairman has said earlier.
So add to a final point, All these IPOs coming to Hong Kong, they are almost all Mainland companies, right? They just want to raise money to go out to the world, right? This is a perfect place because you can go back to China, you can go airport, and and then you can keep keep a lot of wealth for investment. Keep in Hong Kong, it's a perfect place. And then you can go to the museum after work. Yeah. Thank you. Yeah.
Okay. Thank you. So let's have the last question, the gentleman in the third row, please.
Hi. I have three questions. First, Northern Metropolis, I think the government is ready to sell land towards the end of this year. Just want to ask about the Shanghai's interest level in Northern Metropolis. And if you do if you're interested, do you plan to bid for land by yourself or do you plan to partner?
And if you're a partner, what kind of partners would you be looking for? And second, want to ask about China DP. Is that a contract to sales target for fiscal twenty twenty six? And also want to drill down a little bit deeper. I think I just want to get an update on the Guangzhou South Station project, ICC there because Guangzhou is one of the weakest probably Tier one cities there.
I just want to see how we're doing there. And third is going back to China, Mainland China IP. I think it's no secret that the a lot of the main luxury retailers have pulled back on the expansion plans as pointed out before. I mean, there's a flight to quality, but when it comes to expanding, they're not quite as willing. Would that cut into the initial year end costs that you were planning for some of your new IPs in Mainland China?
And also, you give us some sense about the rental income uplift that we can get from the Mainland projects when they are all completed and ramped up? Thanks.
So your question about luxury retailers, can you repeat? Yes. In terms
of return on your investments, would that cut back on your returns expected return given the reluctance of the luxury retailers to expand?
Okay. Yes.
Okay. I'll take the question on the North and China. Indeed, this is a very grand visionary project as promulgated by government. And indeed, it's gigantic scale. It's actually spend spending over 30,000 hectares, which is equivalent to one third of the total land area of Hong Kong.
It's going to be a multi decade development project. And I'm sure the government is taking the lead to actively go out and to accelerate the project by steering all the major transport infrastructure projects, housing, and the emphasis is on the the economic projects and paying emphasis on the innovation and and technology companies to settle to to to settle in this region being close to the border. Obviously, this is, as I understand, is a huge amount of land will be resumed by government to facilitate the implementation of this gigantic new town or new development area. Indeed, we are currently have several projects in these location already because it's not just completely new. It's actually built on the existing and often new towns and other developed areas.
We have several projects across across the, NM, including Yunlong, Yunlong East, Hongshui Qiu, Kutong, and Fening as well. We have already committed a couple of residential projects already. And while we will still closely monitor and review opportunity arise, and we remain very committed to maintain a prudent financial discipline in all these investment.
Adam, would you like to answer the South project?
Yes. Thank you. I think with South Station, we've recently handed over over a 100 units, first phase to our buyers. And I think they've honestly, you can ask them, but they've been very happy with our product. And, they actually would say they would love to refer to friends.
I think, more importantly for the project, obviously, I think, something different from SXKPU or or we're unique at is, you know, a lot of developers can promise in the presales or can sell it at at at in marketing and branding, we, hopefully, we strive at delivering just what we promised or even better. That's our Yisam Kin Gao, our building home of hearts. And I think it's also reflected in substation. Not only is the hardware good, but, we are focused on building the community too and our mall actually, there is ICC mall around 20,000 square meters and some office will come online next year that will greatly enrich the whole area and the amenities. And then also, we're bringing in kindergarten and famous schools that, Chu Rong Ji, our ex prime minister, went to.
And so the the education schools will open next year. And finally, I would like to say a big football stadium is opening in our area. I think when it opens next year, it's the biggest in China for now. It's 75,000 seats. It's going be the Guangzhou football stadium.
So actually more than almost two times of our Kitek. So I think as we hand it over with good praise and as the area matures by next year with a lot of infrastructure coming by the government, and I thank the government for putting in the infrastructure. And on top, a lot of intercity rails will have the last thing is we'll have a similar to an airport express actually. The new rail will open by end of this year. It's called the intercity rail and it will connect South Station to the Bayon Airport in thirty minutes and it will connect South Station to the city center in fifteen minutes.
And so it's a little bit like our airport express with Dongsho Line. So hopefully with all that, the sales momentum will continue to pick up. Thank you.
Luxury Malls? Yes, Luxury Malls, I think
Luxury brands, right?
Luxury brands, yes. I think I'll again, I think I'll reiterate that kind of the goodwill we've built with the luxury brands through our Shanghai IFC Mall, I think we've been able to leverage and extend that to the Nanjing IFC Mall. Currently, it's the mall occupancy is already over 90% with stabilized tenant sales. And the mall itself, I think, has established itself as a new destination, right, for luxury shopping beyond the traditional the dirty mall, right, in the in the traditional area. And for looking forward, right, I think for our ITC projects of our other of our 100 projects, I think generally, internally, we're quite conservative with making rental forecasts.
Right? Normally, it's based on we always would check based on historical numbers, never never quite forward looking, right? So I don't think I think in terms of meeting budgets, I think it will not be a big issue. But in terms of adjusting to the market, I think we are always very follow the we follow trends very closely, right, of the market. And so I think a few things, right, I'll react to your question.
One is that for both the ITC project and the Hangzhou project, which are two of our biggest IP projects coming up in the next few years. I think they are all located in some of the best locations in the city with multiple railway lines connecting and also integrated projects being with office, retail, hotel, apartments or service apartments, elements nearby or on top of the projects. So in this market, I think the brands, they're very concerned about traffic, right, if you can generate natural traffic in your site. And we believe these inherent elements in the transportation connectivity and the location of the site and the multiple mixes, property mixes, right. Those are kind of what we can offer to our tenants to give them confidence about our ability to drive traffic, right?
And in terms of my point about trend following, right? I think in China, there's a lot of talk about nature and just like evolution, right? And I think in a way, they are moving very fast, right, with and also with preferences and taste of our customers. And so I think for these new mega projects, we will also actively try to bring in new brands and experiment new trades. For example, new entertainment options, right?
I mean the cinema industry is not doing very well. So but there are also new up and coming entertainment options, right, that are emerging in the market, which we will bring in an experiment for these new projects. And I think we are able to do that because, one, of our experience two, also, I think on the hardware, we're also very thoughtful in the design, meaning maximizing high ceiling infrastructure both above and below ground and also ensuring that you have maximized connectivity, right? Each floor will have vehicular and pedestrian access or public transport access, right, on each floor. I think this is something that our project teams are very active.
Good. Okay.
So thank you. So this concludes today's analyst briefing. So thank you all for coming. Thanks. We have some refreshments outside. Please stay and enjoy. Thank you.