To our analyst briefing for our results. Allow me to introduce to you who are at the head table. You all know very well our Executive Vice-chairman and General Manager, Mr. Adrian Cheng. Next to me, our Executive Director and CFO, [Mr. T.C. Yau]. Further down, our Director of Finance and Accounts, Mr. Jim Lam. I am Aldous Chiu for Investors Relations. We will start right away. Please do first switch off your handset. Allow me to invite Jim to talk about the financial stuff. Adrian will move on to talk about what we have done recently, which is very creative.
Good afternoon. For 2018 financial year, profit attributable to shareholders HKD 23.3 billion, up 204%, because of improvement of our segment results and the changes to fair value of investment property, and also improvement for other income.
For property development and infrastructure, the improvement was 25% and 15% respectively. For the change of fair value of investment property, the gradual completion of Victoria Dockside led to appreciation, and also other IP properties and Hong Kong offices also improved in terms of their rental. Earnings per share for 2018, HKD 2.34, up by 193%. Basic profit, HKD 8 billion, up by 12%. Net debt ratio 29.3%, down by 5.5 percentage points. Today at the board meeting, we decided that the final dividend should be HKD 0.34, which is HKD 0.01 higher compared to last year. So for the whole year dividend, it reaches HKD 0.48, up by 4.3%. So the dividend yield is about 4.6%. Next, let's look at our segment performance, HKD 15.8 billion in total, up by 12%. For Hong Kong property development, HKD 2.9 billion, up by 26%.
The contributions mainly come from a number of projects including Mount Pavilia, The Masterpiece, The Pavilia Hill, and Double Cove. We improved our gross margin from 27% to more than 40%. For Mainland property development, HKD 6.6 billion, up by 26%. Major contribution comes from Guangzhou Covent Garden and other Greater Bay Area projects, Shenyang New World Garden, Langfang New World Garden, and Wuhan New World International Trade Tower. Our improvement for gross margin, again, like the Hong Kong performance, is quite substantial. For 2018, it goes over 40%, while it was 30% last year. For investment property, Hong Kong segment performance HKD 1.2 billion, rental income HKD 1.8 billion, up by 16%, mainly because of K11 ATELIER, THE FOREST, started operations, and good performance for other important projects.
Mainland segment rental income CNY 800 million, up by 53%, mainly due to the operation being commenced for Wuhan K11 Art Mall.
After privatization, we have improved and optimized our internal structures, and that involves Shanghai Hong Kong New World Tower. We have seen very outstanding performance for infrastructure, especially highway and aircraft leasing. For services, it's a bit below expectation. Gleneagles Hospital Hong Kong involved a lot of fundamental expenses, and also Free Duty contribution is lesser. Also the bus business, due to competition from railway, the performance was a bit less than expected. Next slide. We have heard from some analysts that they would like to know how the net profit can be reconciled with our underlying profit. We prepared this chart for you. We have deducted MI from net profit and also IP revaluation gains, and also income from the selling of the asset, including the Beijing Capital International Airport by NWS. So the basic earnings, HKD 8 billion, up by 12%.
Our balance sheet up to the end of June 2018, total debt, HKD 138.3 billion. Fixed interest debt, 37%, floating 63%. 91% is in Hong Kong dollars or U.S. dollars, and the remaining would be renminbi debt. In order to cater for the risk of high interest rate and to sustain our solid financial policy in the foreseeable future, we will control the ratio for fixed interest rate debt at 30%-40%. Cash and bank savings, HKD 63.5 billion. And usable asset in total is HKD 92.1 billion. It is expected that no equity raising for the group in the foreseeable future. Net debt ratio, 29.3%, down by 5.5%. In order to be prudent, we will invest heavily on investment property. But having said that, we will continue to maintain our net debt ratio below 40%. Next. When the interest rate is rising, how does it affect our P&L?
As I have said, we have about HKD 140 billion in debt. If every percent of increase for the interest rate may lead to 40% of our debt profile, total expense will be HKD 450 million more. But actually, a lot of our interest expenses will be capitalized in our developments. So every percent will lead to a limited level of impact on our P&L. In the past 12 months, we have done multiple buybacks of our shares, covering more than 20 million shares. In a moment, Mr. Adrian Cheng will take us through how the group has gradually improved our segment performance and improved return for our shareholders.
Thank you, Jim. Perhaps very quickly, I can talk about value creation and for our shareholder in the company in terms of our strategies, what are they? In recent years, how have we optimized our plans?
We have set up this ecosystem with a lot of effective interaction among our stakeholders. We have robust management execution with pioneer vision. We are first in the market. We focus a lot on the Greater Bay Area, leading to outstanding performance. In the year, we obtained more than 100 international and local professional awards. At the same time, in terms of our targets, we reached HKD 25 billion contracted sales. Last time, it was HKD 10 billion. We are the first in the market because it was golden period between April and June, the best time to lock down our profit for 2019. So we sold about HKD 20 billion, which was 40% of the market level back in May and June, because it was the best time.
In May and June, the entire market will feel that many agents have to take their exams, so we did not have very fierce competition at the time, and we got a lot of the business at prices higher than other players. We will not follow them. Reporters asked a similar question. For example, Cheung Sha Wan land lots were quickly obtained at only about HKD 7,000. We are now selling at HKD 12,000. So I need to tell you, it is not just our brand. We even charge a very good premium. If you move to page 11, if you look at our ARTISAN HOUSE, Mount Pavilia, Fleur Pavilia projects, our brand has a premium of 5%-10% already in the market. So when we do pricing, we understand because of the brand effect, we can have that premium.
For ARTISAN HOUSE, the average was HKD 29,000, and Mount Pavilia, HKD 18,000, which is 5% and 25% in the same area, especially in Sai Kung. We sold more than 400 units in two months at a premium of 25% higher compared to the same area. I want to tell you, it is not just about execution capability. We can demand a premium, and I hope you understand that. Secondly, when we deliver our units, our score is 95 ± , meaning our quality is very outstanding. In recent years, we are able to maintain the same level of score. On page 13, HKD 20 billion, 40% of market share. After we obtained that, we locked down 80%-90% of our profit for 2019. When we launch our units, in terms of online sales, offline sales, collaboration with agents, we are doing everything in a pioneering way.
In Cheung Sha Wan, we bought the three land lots at about HKD 7,000, and now we are selling at HKD 12,000. That is 30%-40% of value creation. For Nam Cheong project, Sino Group purchased another lot at about HKD 17,000, and also the land for hotel development was about HKD 13,000 odd. We were the first mover to break down old boundaries. We use new technology and combine that with the traditional way of business to increase our productivity and save cost and improve gross margin. We have 27 IPs granted. We have development team in Guangzhou who are focusing on new technologies. You may wonder, how does that reflect in our P&L? I will tell you the details in a moment. With new technologies, our group launched Fleur Pavilia, and we were the first to launch online registration system. We were the first mover.
This is actually quite important. If you ask everyone in the industry, this is making a lot of difference because people do not need to hand write any forms. We do not need cashier checks. We do not need agents to pay to help facilitate a process. You can do this very quickly on your mobile handset. So quickly you can get the information of every single person who is interested. People can do it themselves, and you can also use your credit card. This is one example, and we saved 23 staff. We got IP for this, and on page 15, we are doing construction technology and SnagR unit handover digitization. Moving things online is very important.
We have BIM and CIM construction information modeling, which is in 3D, so that we are able to grasp all the information, differences, voids, and we can reduce VOs and shorten the cycles.
Because in the past you have to do a lot of mock-ups, and you have to read through many informations to know how to make things happen in reality. There are many maps and charts and diagrams flying around. There is a lagging behind situation on site and the project manager is trying to catch up. With BIM, we can see everything in 3D. We can see different departments, information coming from them, and then we can comprehensively see everything, and then on site, you can make modifications on your computer if you are not happy with any details. You do not need to run 10 different diagrams. We are able to reduce 125 workdays, and we are able to save CNY 13 million for six mainland projects, and we can save construction waste up to 120 cu m . On King's Road, we used the BIM modeling.
We reduced many VOs and shortened the cycle so things can move along more quickly. SnagR will facilitate delivery of the units. In the past, we have to do it manually to put labels on the defects. There could be 1,000 defects for each flat and no one is there to fix the problems. Today, that is no longer needed because we can digitize everything. All the departments can see the problems and execute right away to facilitate swift delivery and handover. This will shorten all the processes. In the past, we will have to spend six years to construct a project, and today we can do it within four years in pre-sale. After maximizing 13 months, we are able to achieve the CC - 13 months. That is the maximum achievable.
We have to consider if the waiting time is too long, which may lead to negative atmosphere. We have done design freeze early on. We know what we are going to construct. When we are doing the modules, it takes shorter time in Hong Kong and mainland China, so as to improve efficiency. About WELL, we have more than 40 professional certificates. For 2030 sustainable development, white paper guides our overall development and standards for sustainable development. We were the first to obtain WELL certification and also BEAM Plus Platinum certification. If you quantify everything, in the future for our major projects in Hong Kong, we would like to reduce 37% of kilowatt hours per square meter. In China, reduction of 22%. In 2017, through our energy center, we saved about HKD 2.34 million in terms of electricity fees.
In the future, we would like to achieve great reductions. We also show strong commitment. You probably want to ask about Victoria Dockside, what is the cash flow? How are things going? When is it going to be commissioned? What is the rental level? Allow me to answer them in one go. We have almost 1 million sq uare foot for retail. K11 ATELIER is the office, breaking all the previous records. The latest phase value, about 120. Effective, maybe you can think of it as 80. So efficiency level is about 90%. More than 70% already rented. Towards the end of the year, close to 90%. Perhaps I should slow down. Very recently, we opened K11 MUSEA for retail. Muse by the sea, that means. So it is the source of inspiration. It is about culture, things we love most.
Also to make money. Muse by the sea. So it is about culture, not art and everything. Anything spiritual, we can charge money for that. You want to ask about the rental situation? It is between 110 and 130. That is up to some fine-tuning. What is the percentage that is already rented? More than 60% at this moment, and towards the end of the year, should be more than 70%. It will be commissioned in summertime next year. The progress is very satisfactory. So we are doing very well. I do not talk about it all the time. I do not want to attract too much attention. Service apartments above, we call it ARTUS. A-R-T-U-S. K11 ARTUS. This is new service apartment. I do not have figures to share with you because they are not yet disclosed. For Rosewood, it will be commissioned in March next year.
Together with Rosewood Residences, about 600 rooms. After full commissioning, within three years, we expect to improve rental level to HKD 2 billion or HKD 2.5 billion. In a year? After the full year of operation and then two more years on top of that. That is the range I can give you. All right? I have answered all the questions. SKYCITY. I cannot share too much information because a partner is involved. But I can tell you, first of all, why we do this. For Greater Bay area, this is the node. It is the heart of the area. Greater Bay area is a key area for our development. Last year, it was 800,000 sq m of land purchased. This should be the biggest commercial complex in Hong Kong. 3.77 sq ft together with the car park. 2.1 million retail, 570 entertainment, and then another 500,000 office.
The rest will be car park space. It should radiate to a two-hour circle covering 70 million population. With Terminal two and a new runway, we are talking about 100 million potential tourists nearby. This is going to be a key project. The project should be completed by phases between 2023 and 2027. Offices should be completed first. I will not talk too much about the figures because we do have a partner. All right. Next, very quickly, our vision and strategy. We want to build an ecosystem which is unique to New World. We will have medical, education, D·PARK, hotel, K11 retail, and residential brands, and department stores, everything inside the same ecosystem. We want to be younger and more diversified. There are brand premiums involved, so obtaining land lots has been easier for us.
If you look at the 800,000 sq m of land, it was not particularly expensive. It was about HKD 5,000 per sq m. In Greater Bay area, it was about HKD 25,000. But we are talking about property prices at HKD 100,000 or even higher. Our gross margin for Hong Kong and Mainland China segment result GPM was about 40%, compared to 20%-odd in the past. It is a great improvement. I want to talk about inside the ecosystem. Technologies are very important. We have this big data platform. This is not about talking, it is about doing. New World CLUB, people would say, "Just rely on the agents." Actually, 10% of our buyers are club members. About 60% are post-1980s and post-1990s. Millennial strategy is one of our major visions and active ratio, 60%. So inside the New World CLUB, buyers, 60% of them are very active.
We always engage them, and every time we have a launch, we have about 10% of our buyers coming back to us. Nearly 60% belong to post-1980s and post-1990s. Engagement community building is very important because 75,000 club members may radiate to medical, hotel, and retail properties. This is one strategy for our next three years. KLUB 11 is about retail. We have 900,000 VIP members. Activation rate is 30%, which is very high, and 70% belong to post-1980s and post-1990s. We also need to optimize our brand. VIP engagement rate very high. From the New World CLUB, we have HKD 2.3 billion income from flat sale. Related consumption, HKD 14 million. We are able to cross-sell up to HKD 14 million. Hopefully in one profile, we can know everything about the members, and then we can launch different products targeting them. Let us talk about gross profit.
For Hong Kong, DP segment results, 23% in 2016, and for 2018, improved to 40%. China DP segment results improved from 20% to 41%. The property sector is improving. Prices are going up. We do have cost control measures. We have a number of new technologies allowing us to better control our construction cost. Marketing cost is down to 1% from 5% in the past. Now it is about 4%, but we will maintain that level. We have many guidelines. Financing cost for the entire group, we also cut that back by a few hundred millions. We are hedging against interest rate actively, and my colleague can share more about financing cost. Share price, you can do the math. Year-on-year improvement of 11%. Our competitors, you can see they are all single digits, so it means we maintain our momentum.
You should consider writing something rather positive about our shares because we have very good performance. Underlying profit is very good. HKD 8 billion is not bad at all. It was never a double digit in recent years, right? Dividend payout, isn't that great news? Last time we had a meal together, you all asked for better dividend payout. When we make more, we can pay more. It is about 60%-odd , and I think that is the highest for the entire industry. I hope everyone is happy. When we make more, we can share more with you. I know exactly what you want to ask. Creating shareholder value in the past 12 months, we have been buying back our shares. We have used HKD 250 million, involving about 22 million shares. We will do it whenever it is necessary to create more shareholder value.
We have only started this initiative in recent years. We hope you appreciate we are doing something new. The best news is that it is profit-making.