Morning, ladies and gentlemen. Welcome to Far East Consortium International Limited 2023-2024 interim results presentation. Before we begin, let me introduce the management representatives. They are Executive Director and Managing Director, Mr. Chris Hoong. Executive Director, Ms. Winnie Chiu. Managing Director Global Project, Ms. Wendy Chiu. Chief Financial Officer and Company Secretary, Mr. Boswell Cheung. May I invite Mr. Hoong to start the presentation. Mr. Hoong, please.
Good morning, ladies and gentlemen. My name is Chris Hoong. I am the MD of the company. May I just maybe give a bit of overview as to the backdrop of the environment which we operated in the first half of the financial year. It has been a pretty challenging first half financial year with a very difficult global environment in term of interest rate, in term of inflation, in term of also human resources supply. So we have been operating under pretty challenging market conditions in the first half. But I am glad to say that despite that, I think we managed to sail through the first half with very remarkable results.
There are really a few key themes which I like to go through in term of our first half results. I will also walk through in term of our financial position, how we are looking at it, and then I will pass on to Wendy, who is our Managing Director of Global Projects, to talk about the projects. Then Winnie will talk about the hotel side and then also to give everyone an update on how we look at the outlook, and then followed by a Q&A after that. Now, if I may just start with the key themes for the first half results.
I think you see that despite the challenging environment that I mentioned, our revenue actually was up over 100%, HKD 6.3 billion in the first half, with adjusted cash profit of over HKD 500 million. This is the figure that I would like our investors, the bankers to focus on, because this is after the deduction of interest and also after the deduction of tax. So this is actually quite a remarkable results, especially comparing ourself to a lot of our peer group. I think it is something which we are very proud of. On the property development side, we recorded a revenue of HKD 4.7 billion.
We benefited from the strong pre-sales that we previously recorded for West Side Place. Also, we started to book revenue for our Hyll on Holland project, which will be completed in the coming year also. Hotel, we did record an increase in revenue. We opened two hotel in the first half. It was the Dorsett Melbourne, as well as Ritz-Carlton, Melbourne. I will let Winnie talk about hotel operations a bit later on. But overall, we recorded a revenue growth of 3.4% in the first half. Car park, there is a drop of 5.2% on the top line. However, the underlying profitability has improved.
The drop in revenue was primarily due to the fact that we sold a New Zealand car park during the year. We have spent a lot of effort in phasing out some of the underperforming car park. Despite that, you will see later on when I talk about our car park operations in term of number of bays that we are managing and all that, we are still recording a positive organic growth. The gaming revenue was up 14%. It is actually quite remarkable to see the very big turnaround of gaming post-COVID. We have also submitted our application for the spin-off of our gaming division, Palasino.
That was done in September, and there is actually a very detailed prospectus that is on the Stock Exchange website, outlining the detailed results of our gaming company, Palasino. The other key themes that I like to say is on the recurring business. The recurring revenue business, comprising mainly Hotel, Car park, as well as Gaming, benefited from the back to normal operations.
The revenue in the first half for the recurring business was HKD 1.5 billion. I think the second half, if I may just give a bit of my projection, I think it will be even higher than this figure, given that a number of hotels which are on the ramp up period is actually coming to give more full period contribution in the second half. Also seasonality-wise, it is typically second half will perform better than first half, given there are more holidays like Chinese New Year, Christmas and all that.
These are all in the second half of our financial year. The other thing which I think we need to talk about is, of course, the Hong Kong business, which is an important part of our hotel business. The organic growth in car park I mentioned just now, and I will go through the detail bay by bay number a bit later on, and it is still demonstrating good organic growth. Demonstrating that we are actually a company that can keep. It has been 15 years of growth, right?
I mean, I remember when I first joined the car park business, I think we have less than 50,000 bays, and now we have over 120,000. The other key themes that I would like to say about the first half is the recycling of non-core. I think we made a statement when we published our last annual result to say that we are determined to basically bring down the gearing level by selling some of what we regard as non-core assets. We did complete the sale of the Grand Mirage Sheraton.
It is a joint venture hotel for AUD 192 million, and we expect that we will record a gain of HKD 58 million in the second half because the transaction was actually closed in the second half of the financial year. We also sold a block of apartments, Dorsett Bukit Bintang via a block deal raising about MYR 120 million. We have also commenced the disposal of our for-rental residential blocks in Shanghai. We have essentially run a process, and there are a couple of parties that we have selected for final negotiation now.
This is not a small disposal. If we are able to get that concluded, it is quite a good monetization that we are able to get. There is also a small office deal that we did. We actually acquired it in, I remember it was May this year, and then we got an offer for about HKD 30 million more, right? Just in the short space of two months, and we decided to also sell that. That is going to be completed in the second half of the financial year. That is also part of the process that we, on monetization that we are doing.
Moving on to the next theme that I would like to say is the implementation of the initiatives to lower the gearing level and interest. I think you will see that actually from a number perspective, we did manage to bring down the net debt level in the first half. Going into the coming 6- 12 months, right? There are actually quite a large number of projects reaching a completion stage, and Wendy will talk a bit more about that later on. We still have unbooked pre-sales of HKD 14.1 billion. These are basically sales that we have contracted, which are not booked or the money has not come onto our balance sheet yet.
A substantial portion of that has not come onto the balance sheet yet. So this represent basically a good visibility on cash flow stream in the coming 12 months- 24 months. So it is quite a big number of large projects coming to fruition. There was significant settlement in West Side Place, as you can see from the result, but we still are settling it because it is such a big project. The settlements are spread over a period of time. I would say that the rate of settlement that we are seeing is encouraging.
There was some default, but we did manage to also resell it as well. The momentum seems to be pretty good. We are accelerating the completion of Kai Tak Office. If you remember, I think a lot of you were here when I last presented the results. It is a project that we pre-sold to China Light & Power . This is located next to the spot stadium. We sold it for HKD 3.38 billion. We still have 80% of that we have not received.
By accelerating that, there will be quite good cash flow stream coming back on our balance sheet. The active sell-down of our inventory. There is HKD 7.2 billion of inventory, and relative to basically our liability, if we are able to monetize this quickly, this also represent good cash flow stream that will be coming back on our balance sheet. So very big focus on the sale down of inventory. Of course, the continued sale of the non-core car parks, as well as hotel assets.
These are ongoing and we have selected the sales agent for Ritz-Carlton and process is being run at the moment. The other key theme I would like to say is also about the unlocking of the value on the strategic investment. Palasino is a business that we acquired a number of years ago. In fact, it's got actually quite good opportunities in Europe in term of acquisition targets. From a FEC group perspective, we would rather the business is spun off into a separate vehicle so that the vehicle itself can use its own balance sheet to facilitate those acquisitions.
That's really a very core part of the rationale to spin that off. We will, at the same time, raise capital for FEC as well. Also convert basically unlisted shares into listed shares. That's really what we think the strategic benefits are by doing that. BC Invest, which is our mortgage lending platform, I'll talk a bit more about that later on, but we are reviewing the strategic option there as well. The business actually, in the first half was doing well despite the market conditions.
We completed two RMBS deals raising about AUD 963 million in the last six months or so. The AUM number was AUD 5.3 billion. So it's actually quite a sizable AUM that we are able to get to with only about seven years of operations. Moving to the next page seven, is just to give you some numbers. There's really a few numbers that I'd like to mention. One is the top line, 108% growth. Gross profit was up 75%, HKD 2.1 billion in total. Margin dropped a little, but that's primarily due to a number of reasons, in particular the Hong Kong hotel operations, which Winn ie will talk about.
The cash profit, and this is the number, which again, I mentioned this just now, we should focus on. If you adjust the cash profit for some of the one-off item, for example, the listing expenses of Palasino, and if you take out the one-time gain last year in relation to the compensation income that we got in relation to our joint venture. The cash profit was HKD 531 million, which is up 24%. This is what I like to basically kind of highlight to everyone because, in my view, despite the challenges that I mentioned, it's quite a remarkable result.
In particular, this is after the interest charge, which we almost doubled. Also the higher selling and marketing expenses, which was a result of the completion of West Side Place. So, that's really the cash profit in the first half. So HKD 531 million. The dividend we decided yesterday that we'll maintain the dividend at HKD 0.04 per share. That's really some of the numbers that I'd like to mention. The next page is about really our pipeline. I think I did mention about in the coming year, there are a number of actually very large projects coming to fruition.
Kai Tak Development, I think if you go past the new stadium in Kai Tak at the moment, you'll see that next to it, there's this hotel and office block. So that's going to be completed soon. Hyll on Holland, Cascadian, Dorsett Place in K.L., Victoria Riverside, Aspen in London, Collyhurst, Queen's Wharf Residences. These are all the big projects that are actually coming on stream. So when you analyze the balance sheet, our construction loan during the end phase will typically be higher, and then after we complete, the loan will be repaid down.
The important thing is that we are able to basically keep the momentum going and as we complete, the gearing number will improve further. Moving on to the next page, if you look at the margin of the various businesses, the number that I'd like to focus you on is really the gross profit number before depreciation. Because the depreciation charge is more an accounting charge, no cash flow. The number that we should look at is really the before depreciation cost profit. Across the board, you'll see it's pretty steady with the exception of hotel.
That's primarily due to a change in revenue structure in Hong Kong and the ramp-up of new hotels that I mentioned. The one in Australia, and I'll let Winnie talk about that a bit later on. Now, exchange rate. Because we are a business that we operate in different countries and region, and we report in Hong Kong dollar, we have to translate all the operations, operational results, financial results back to Hong Kong dollar. The first half has not been favorable to us. All currencies actually suffered versus U.S. dollar. Looking at the current, today's rate, I think a lot of the foreign currencies have also recovered.
If we adjust the number and assume that there is constant exchange rate during the last six months, in fact, our equity position would have been HKD 810 million higher compared to the reported balance sheet number. So there is an impact, and hopefully when we see the dollar and some of dollar move in our favor, or foreign currencies move in our favor, when we report back in the Hong Kong dollar, you'll see that the equity will go back up. Also in term of revenue contribution, everything that is reported back in Hong Kong dollar will also be more favorable in term of absolute number.
I think the next few slides is about our balance sheet, which I like to go through it. In particular, I see a lot of bankers as well as debt investors. One message is that we do pay very close attention to how we manage our balance sheet. In the first half, we did manage to reduce the short-term debt by HKD 6.3 billion. It's quite a big number. Some of it is because of West Side Place completion. We were able to then repay down a lot of debt, and then we financed a lot of the short-term debt into longer-term debt. We also reduced the net debt by HKD 1.4 billion.
So overall, you see that our total debt number was HKD 28 billion, and then the net debt number is about HKD 24 billion. The equity side, as I mentioned, we did have a markdown of equity because of FX movement. If you were to keep that number unchanged, say you add back the HKD 810 million to our equity position, in fact, our net gearing ratio would have been 2% down from 73.8%- 71.5%. That was a quick calculation that I did just now. So it did have an impact, and it's quite only a slight movement in FX.
Changes the gearing levels quite a fair bit. That is something which you should bear in mind, right? But the good news is that the underlying trend is improving, and we do have quite a big completion coming up. The initiatives to reduce debt level and finance cost. We did set a target of reducing the debt of HKD 6 billion- HKD 7 billion in our last report. I think we have done HKD 1.4 billion, and then there is another HKD 4.6 billion- HKD 5.6 billion that we are targeting to reduce the debt by. If you actually study our number, right?
The Kai Tak deal is about HKD 2 billion+ that will be coming back, and we also locked in over HKD 1 billion+ of pre-sale on completed inventory. That is not even subject to construction costs anymore. That will be about HKD 4 billion. We can bring that down by HKD 4 billion quite easily, in my view. That is something which I think you should be aware of. The number of initiative many of these I have basically mentioned before, but just to summarize.
Focusing on monetization of existing completed inventory. HKD 14 billion of pre-sale. We still have the West Side Place to settle, and still going on. We have completed the disposal of Bukit Bintang block. We are also actively selling down the inventory. There is over HKD 7 billion of inventory. Active sell-down on core. The completion of Sheraton, which was done in November. The cash actually came in then, so it is in the second half number. We are also embarking to look at some other non-core minority stakes in hotel and all that.
That will not have a big impact on the underlying business, but actually from a cash flow perspective, can bring in the cash to then reduce the gearing. There are some mature car parks we are in negotiation to sell as well. This, I think, is probably mature, and there is not much upside to it, so we will consider doing that. The big one is the sale of the residential plots in for rental residential plots in Baoshan. I mentioned that just now as well. Recognition of other significant contractor sales. Kai Tak, I mentioned.
Hyll on Holland, that is actually coming to completion as well, so that you will see basically that there is still, I think, on both pre-sales of over HKD 1 billion. All that money will over time come back in as we complete that project. Last but not least, I mentioned about the spin-off of Palasino. That hopefully will also bring in some cash as well. In term of the short-term debt analysis, you see that we already repaid the 4.5% note, which was outstanding as March 31st, 2023.
We have a note which is due HKD 2.9 billion due in January. We have arranged financing for this. That will be essentially refinanced and maybe some of it is from our internal resources, but the majority will be refinanced. The rest, right? Honestly, many of the development loans are already covered by the pre-sales. There are some corporate loans which are being rolled over. There is about HKD 2 billion, which is really not due within a year, but it is classified as short-term because of the terms and conditions that is in the loan doc.
It is pretty much under control, and you can see that the level has come down quite dramatically. In terms of access to liquidity, I must say that we continue to receive very good support from our bankers friend, I think partly because of our strong track record in operation in all across our different divisions. We have a liquidity position of about HKD 11 billion on-hand, of which HKD 4.6 billion is basically cash and short-term liquidity.
There is undrawn bank lines as well of about HKD 6 billion. There are actually six hotel assets, which is completely unencumbered. When we need additional bank financing, there is about six hotels which we can pledge and get financing, and also sell the HKD 7.2 billion of inventory, right, that we have in-hand, that can be used as collateral if we need to, or basically just sell down and get the cash back quickly, right?
That is really the access to liquidity point that I would like to make. Also the capital commitment side, you will see that in fact, we bring that down quite dramatically, to now about HKD 1.3 billion. I think it was about HKD 2 billion as of March 31st. This is well-covered by the facility that we have. With that, I would just like to maybe just pass on to Wendy, just to talk about the property development, and then Winnie will talk about the rest. Thank you.
Thank you, Chris. Morning, everyone. I will now take you through property developments and updates. Referring back to what Chris have said, FEC has a very healthy pipeline of over HKD 60 billion of sellable residential inventory, close to 10 million SFA, and a cumulative pre-sales of HKD 14.1 billion. I would like to highlight major projects globally. First, let us go to our hometown, Hong Kong. Kai Tak mixed-use development with total GFA of 344,000 sq ft, comprising of hotel, retail, and office, with excellent connection to sports park.
Office with a GFA of 173,000 sq ft, sold to CLP, as what Chris has said, at HKD 3.3 billion. These will all be completing next year. Another project also in Kai Tak, all residential, 1,300 apartments. We will be launching pre-sales first half of next year. Very efficient layout, value for money, beautiful clubhouse. GDV of HKD 6.6 billion. Now we will take you to Australia, West Side Place, one of the largest, actually, in fact, it is the largest mixed-use development in Melbourne, with a 31 plot ratio. We have topped up 80 floor with Ritz-Carlton on the 80th floor.
Two towers, Tower III and Tower IV, over 1,500 apartments with Dorsett also in another tower. Completed this year despite of COVID previously. Right now, we have settled up to HKD 3 billion. Star Residence, Tower II. This is part of the five towers. Tower II, 440 apartments. It is all 99% sold out, will be complete in two phases. First phase expected last quarter 2024. In Perth Hub, we are over 85% sold, 314 apartments. In fact, this is a self-delivery project. Right now, we are on time and under budget. Queen's Wharf, Brisbane, Tower IV.
This is actually within the whole Queen's Wharf precinct. It's in the middle of the Brisbane CBD. We have 667 apartments. It's all sold out. Expected completion, FY 2025. Tower V, which is right next to Tower IV, again, in the same precinct with Hotel Rosewood, Dorsett, Star Casino, luxury retail, entertainment, and F&B. Tower V, we actually pre-sold 92% during COVID period. It actually was record price and our expected attributable GDV of HKD 2.3 billion. Now we go to U.K., London. It's Canary Wharf, in the heart of Canary Wharf.
This is the top three tallest residential building in U.K. We just topped out in August on the 65th floor. Completion in two phases. First phase, ground floor to 20th floor, complete first half of next year. Moving to Manchester, Victoria Riverside, over 90% sold, topped up early this month, actually. Phase I, Tower B and C, 340 apartments will be finishing 2025, January, and phase II will be in mid-January-- mid-2025, sorry. Collyhurst, also in Manchester.
We actually just launched the pre-sale this year. First two sectional completions all sold out. First section complete July 2024. Again in Manchester, Victoria North NT02, NT03, we will be starting pre-sale launch March 2024. First phase completion will be Q2 2027. These are one of the few projects in our pipeline for the 20,000 residential apartments that we will be delivering in Manchester. That's all from me, and now I'll pass to Winnie for hotel operations and management update. Thank you.
Thank you. Regarding the hotel side, hotel operation update, the performance is supported by global economy reopening. In fact, our revenue have increased by 3.4% to HKD 942 million, mainly actually due to two openings. One is the Dorsett Melbourne, as well as Ritz-Carlton, Melbourne, and also a full period of Dorsett West London's performance. Due to the economic climate where the Hong Kong dollar still remains strong, we do suffer from a bit of exchange.
Our total number at Dorsett when we're being converted from foreign currency to Hong Kong dollars, as mentioned by Chris earlier. Regarding different segments, let's talk about Hong Kong. Our hotels have switched from serving quarantine guests to normal travelers, and business has not fully recovered. I think we have, as a group, we really benefited from first-mover advantage, and we have had a tremendous three years, during quarantine period.
So of course, when the business is now being normalized, this is kind of what the numbers is reflecting. Despite the impact on a different revenue structure, our hotel did grow 9% on total revenue, 12% on RevPAR comparing-- If we want to compare, I would recommend our investors to also look at comparing ourselves towards, prior to quarantine time, so really first half of financial year 2020. During that time, there's no COVID, but social unrest. So with the Hong Kong tourism arrival number, that's 47 million in the first nine months of 2019.
On the bright side, the total visitor arriving Hong Kong in the first nine months of 2023 is 23 million, of which 19 million are visitors from mainland China, representing, in both cases, year-on-year increase of 93 times. So all in all, similar to what Chris has presented, looking at my year-end and half now numbers, I am actually quite confident that our numbers are on an increase, especially Hong Kong is a big part of our geographical location of hotels.
Most recently, our October and November month-to-date number already outperformed last year, having an ADR of HKD 800- HKD 2,002 for Dorsett, and for our Silka's, it is really from HKD 500- HKD 700. So really, I have quite confidence in our later year. Regarding mainland, our performance has improved as travel restriction have lifted and if you look at our, actually, not just mainland, but Singapore, Malaysia, and U.K., we have actually a high kind of momentum of growth during this period.
The segment on the profit has dropped, mainly due to the finance cost, as well as I think TWC at the moment, the casino hotels, there is stable recovery in our Europe hotels. What I do want to highlight today is also about our hotel disposal. I think, again, the main theme that we are talking during this session is the ongoing interest rate and that our team is really fully aware and really actively reducing our debt. So on the hotel disposal, in May 2023, we have disposed remaining of 130 units of Dorsett Bukit Bintang via block deal, and that is approximately MYR 120 million .
June 2023, we have already appointed some sales agents to really look at exploring disposal of Ritz-Carlton. Later I will talk a little bit about Ritz-Carlton. Of course, I think they are very nice trophy assets, but I think if the timing is right, there is no harm realizing some of our profit. Again, that is really not our core. But everything is really also pricing, because at the end of the day, we would not want to suffer a loss when we dispose our assets.
Hopefully, like what we have done with Aldgate, really capitalize on kind of the growth, and what we have had value on during the time that we manage. Also, I would like to highlight the completion of Grand Mirage Resort, Gold Coast. That will be on the Gold Coast. We own 25% of that, so that is about AUD 192 million. Pre-tax gain is about HKD 58 million, and we will be hoping that next-
Second half.
...second half, yeah. I think the group, this is actually one that will be our main focus. The group has earmarked the disposal of a long lease residential block in Baoshan. This is typically in the [FX] world, it is called multi-family units. It is kind of like a, yeah, it is a long lease residential block. It is like a social housing, but the lump sum is fairly good for this one. Talking about the hotels that is open, we have opened Ritz-Carlton, Melbourne. It is actually the leading hotel in Melbourne. In fact, yesterday, we have just won the best luxury hotel and the best new hotel in Australia.
We are leading the market rate by about. Our ADR is about AUD 600, which is leading for the Australian market. We have also opened Dorsett Melbourne, and that is a 316-room hotel that opened April 18th, 2023, and we have already reached an occupancy rate of 80% in November. We are ahead of our competitors in terms of ADR. In terms of pipeline to add to kind of our growth momentum, as the global travel industry rebounded, our upcoming hotels are expected to make substantial contribution to the growth and profitability of the group recurring income business.
With the increased demand for travel and hospitality service, I do believe that we are well-positioned to capitalize on the opportunities and further strengthening our key markets. Going to our upcoming hotel completion, we have our Kai Tak, t hat is 373 rooms, and that will be opening middle of next year. Again, I feel very strong about this hotel being next to the biggest stadium. I do feel that when Hong Kong market recovers, MICE is really a big push, and as all from the years before, MICE has continued to be a strong business flow for Hong Kong.
MICE meaning meetings, incentive, as well as events and all that. I do believe being next to the stadium, and the only hotel in the Kai Tak strip, will benefit from this. Regarding the upcoming hotel completion, there is also a service apartment, Dao by Dorsett, Hornsey, and as well as another one in the U.K., both in the U.K. So one is Hornsey and one is Melbourne. With this, I pass it to Chris to further our car park update.
Thank you. Thank you, Winnie. Just very quickly, I am just mindful of time. The car park business, as you can see, in term of number of bays where we manage as well as own, continue to trend up. We were at 134,000 bays now. We did sell a New Zealand car park during the period. The model there, I think, is that we want to focus more on the profitable bays. In the past, we have taken on some marginal ones, but we have made the strategic decision to pay a lot more attention and phasing out some of the more marginal ones.
This will continue to allow us to benefit so far as bottom line is concerned, and I am seeing very good momentum there. Longer term, this is pretty much a standalone business. We do see that there is tremendous growth opportunity in this car park. We did have a change in the senior management of the group as well. I am feeling very good about the new team, and we hope that we will continue to see even stronger growth compared to the past years.
In so far as gaming business is concerned, I think the big one will be the Queen's Wharf opening. I think you will see from the picture that, in fact, I think this picture is probably not the latest, but the sky deck is now basically built. In term of superstructure, it is almost finished. In fact, the gaming floor is already done as well. Just to remind everyone, I think we have a 99-year license with 25 year of exclusivity in the casino. We do have 2,500 slots machine quota, which is actually very important for Australia.
It is very difficult to get a slot quota in Australia, and unlimited gaming tables allowed for the casino. We have 25% stake. This is earmarked to open next year. Hopefully, once it is open, when we ramp up, we will start to see good cash flow stream coming as well. The other operation is, of course, the Palasino gaming operation. This is the one that we are spinning off. It has eight properties in Europe. In the first half, we saw 14% top line growth in gaming, and this is excluding the hotel component, but just gaming alone is up 14%.
I think the overall growth is even higher if you include the hotel that Palasino or Trans World own. It is demonstrating actually pretty remarkable resilience, especially we have a very good base of loyal customers. We submitted the A1 filing on September 27th. I think you will see that once it is spun off, there is actually quite good opportunities for further growth. We do see actually a lot of new opportunities in Europe, in both organic growth as well as potential acquisitions as well. In term of other operations, BC Invest, I think, I mentioned this last time.
You see the AUM growth rate has been 139% per annum for the last five, six years. So quite remarkable growth rate. I do not expect the growth rate can be sustained at that level because we have a much larger base now. But it is still, in term of demand for our product, we are competing with banks, of course.
So at the end of the day, it is about actually how cheap your cost of financing is. The non-bank sector is actually a growing sector. In Australia, for residential mortgages, I think it is half the market size for non-bank. So there is still going to be quite good room for us to capture more market share in that business. I think that is basically what I want to cover in term of other businesses. I will hand back to Winnie just to conclude with our outlook.
Okay, thank you. I just again want to emphasize about the future outlook of the company and summarize Far East Consortium's next year or two. First off, our whole management team is very aware of the high interest rate. I do think that our investors should feel confident with what we have promised. Our debt, we have reduced our debt within one year from HKD 21 billion- HKD 15 billion, reduced by HKD 6.3 billion. Again, I think this really demonstrates the initiative and the activeness of our management team. Regarding our total bank loan and notes, it is reduced from HKD 32 billion- HKD 28 billion.
That is a reduction of HKD 3.4 billion. Our net debt reduced by HKD 1.4 billion. This will remain to be the emphasis on our management team. I know a lot of you have worked closely with Boswell and Chris and looking at how our group can manage this, and it is much appreciated. Again, I think, just going through summarizing what my sister as well as Chris has talked about with the spinoff of Palasino, there is also some M&A. I do think that Palasino will have some M&A opportunities, given it is the only Europe gaming business listed, will be listed in Hong Kong.
So definitely it is good to have a kind of a life of its own in Europe. I think what I want to also highlight is that we do have a strong unbooked pre-sale as well as pipeline with good visibility of our cash flow. As my sister has said, in terms of strong unbooked pre-sale and pipeline, we are expecting to launch the Melbourne Monument, Manchester Collyhurst Village as well as the Kai Tak Residential. I think, again, what should be highlighted is our expected settlement.
We do have HKD 14.1 billion unbooked pre-sale that will be coming in the next half. That will be namely the HKD 14.1 billion is really the kind of the strong cash flow stream. West Side Place, Tower III and IV, as Chris has mentioned, is slowly coming in as well as Hornsey Town Hall . In London and Manchester, New Cross Central, as well as Singapore Hyll on Holland. Our Singapore Hyll on Holland is a project where it is fully sold. That is in fact quite incredible from our Singapore team.
In terms of outlook in other sector, in our recurrent, our hotel sector, again with more hotels, definitely our numbers will be better. I think car park operation, as Chris has mentioned, our quality of management contract have improved in the last six months. I foresee that the margins will actually reflect. I think Chris has talked a lot about gaming as well as BC Invest. So I will leave that to the Q&A sessions. I am also aware of time, but I also want to bring our colleagues as well as investors really into our ESG efforts.
I do chair the ESG Governance Committee and a lot of you may know that this is really our group's passion, and also recognizing the enduring effects of climate change. Our group has dedicated our past year in calculating our carbon emission, and we are formulating a comprehensive net zero roadmap. And steering our. I think what is important is really what we are doing in steering our. Because FEC do have different business segments, from hotel, residential, construction, to VC finance, all that.
So I think it is important that we steer, actually, my colleague, Natalie who is our Head of Sustainability, is here, if you guys want to chat more, is to steer our business-specific kind of subcommittees on the sustainability. And I think importance is the awareness training as well as the education, then followed by action. In addition to these efforts, we have also successfully secured two sustainability linked bank loans. One is collateralized on our Silka Hotel. That is in fact the first bank loan from this China from.
From there.
China-
Yeah.
From one of Chinese bank.
Yes.
As well as, we have an uncollateralized loan, which is. We will be putting in more effort, hopefully we can benefit and launch more of this sustainability loan. With the latest government initiative into the water conversion and waste management in Hong Kong, this is what our group will definitely, and the hotel side too, will be focusing on. They are not just, I think, of course, sustainability, but I do think also in terms of cost saving, when we talk about waste management, because coming forward, there will be policies on this.
Talking about our key initiatives, slide two. I want to bring our attention to what our group's passion is really the positive as well as social impact. A lot of you may have actually joined us on two initiatives that we have worked very closely on. One is that we have created a co-creation lab within the VTC. Again, our group's passion towards education lies with all. Our hotels really lies with the mass market. For VTC, the combined salary for the parents are below HKD 20,000.
This is what we really feel very strongly, not just in terms of monetary support, but also the support from our team members in going into the students. In fact, for our co-creation lab that we have launched at VTC, it is the third year that we have. I mean, Dorsett is about invested positive impact. It is the third year that we have run that, not just building a lab, but actually having a program with it, giving a bit of a seed money. I am also trying to pitch if any banks want to support this.
It has been very successful because a lot of our students really design things for social impact. A lot, it has actually been very humbling and eye-opening for us. Two or three of our projects has actually gotten HKD 3 million-HKD 4 million government funding and is now embark their journey into the science park. Again, this is really our efforts, our group's efforts to promote and actually just really going back to basic and supporting our education.
Another social impact that we have launched in the last few months is that, we have a Chinese herbal research center, research garden. Since that, we have launched. Some of you, actually, a lot of you will be receiving our Chinese herbal tea. Again, I think, herbal sparkling tea. Again, I think this initiative has been incredible, on three- folds. First, it is very much into conversion, like conservation of our Chinese culture. Chinese medicine, I believe, is really what our Chinese culture is about.
Our group has lent a piece of our land out to a school, and with that, we have actually combined to get some government funding, and on the piece of land for the Chinese medicinal research. In fact, the land itself already have 20 different kind of Chinese medicine. Again, that really shows, I think, for us, it is just the conservation of Chinese culture. Secondly, is really giving back to the education, because we will be having workshops with students as well as younger kids, to make, I do not know, lip balm, sparkling tea, and really also, getting more support from other businesses. I do think that our initiatives has been very well-recognized.
I mean, our ongoing promotion in art and culture and internship opportunities has been actually setting our group a little bit aside from others, and it has been very well-recognized. I think on page 48, you can see the number of awards that we have won as a small group. I mean, it is really very humbling, because we are not exactly a very big group, but, in terms of our efforts into the sustainability, it is really very well-recognized. Again, I would also like to take this opportunity to thank our supporters, and there are many conversations with a lot of you, to talk more about our efforts into sustainability. With this, I will open up ourselves to a Q&A session. Thank you very much for all, for joining us. Thank you.
We will now come to the Q&A session. If you have any questions, please raise your hand. For online investors, if you have any questions, please type it in the Q&A box. We will read it out one by one.
Well, I start up with the Q&A online. Yeah, some question from here. Any refinancing plan for the bond maturity in January next year. How about the perpetual callable bond, October next year?
Maybe, let me take that question. I think as I mentioned just now, right? The January one, I think is refinanced. We are not going to be doing another bond issue in this market conditions. This is pretty unfavorable. Having said that, it is our longer-term goal to maintain an active participant in the capital market. It's just that the market conditions have to be conducive for that.
We do see actually on the bank aspect is actually more favorable in terms of pricing and all that. So that's more the path that we'll take to refinance the January deal. As to the perpetual, I think we are making steps to basically work on the core. We are selling down some of the assets, so that is the direction that we're heading. Thank you.
There's some more question online as well. I think your question is a little bit incorrect. The, which is the perpetual bond, is not the beginning of the year. Anyway, any repurchase plan on it?
Well, I don't want to really give away our plan. Of course, from my perspective, we are always looking at opportunities.
I want to supplement something on this. During the first half, we actually acquired, repurchase, and canceled some bonds maturity in January next year, for about HKD 41 million the first half, and canceled as well. So after period end in October, November, and so on, I think we have actually acquired from the market about HKD 30 million as well. And we do the cancellation as well. So I think, if the market price of this bond is reasonable, I think we'll go ahead and do the bond repurchase from the market.
Any more questions?
Any-
Any questions on the-
On the floor?
On the floor? No.
I think the man asked how many liabilities in the off of balance sheet. Most of our projects are under our own control. As for the off-balance sheet, there are just a few of them as equity related. Usually they are controlled by subsidiaries or associate companies. I think we are a bit different from a lot of domestic developers. Most of our projects, we do not do it in the off-balance sheet manner. If we want to control it, we do not put it off-balance sheet.
Thank you. I just want to check for the West Side Place. I think it is expected to get delivered next year. How much cash proceed we can actually get out of it?
Actually, West Side Place is being delivered since April this year.
Stage II.
Stage II.
You are talking about Stage II, right?
Yes.
There are really four blocks in West Side Place. It is actually a very big development, about 3,000+ apartments. We completed the second stage, which is Tower III and IV, in April, and it is being settled as we speak. I mean, almost every day, there is settlement.
I think as of yesterday, settled HKD 3 billion.
That's after mid-year. I want to know-
Accumulated.
During our financial year, from April onwards It's been settling, right? What Wendy was saying is, as of today, the cumulative settlement was about HKD 3 billion already.
Got you. Let me rephrase my question. How much cash are you expecting to get from pre-sales for the next year?
When we settle, 100% of the cash will come back, because 100% of the pre-sale money is actually escrowed. Unlike the Chinese developers where you do pre-sale, you get your cash upfront, in our case is you get the cash only when you settle.
Basically it is based on how much product they sell going forward.
No, there is also pre-sales locked in as well, of course. I think if you look at our numbers, I think we have about-
We have HKD 14 billion-- I think-
HKD 14.1 billion.
Yeah.
HKD 14 billion.
We have HKD 14.1 billion. I just take as a general question. For our real estate development, normally, we have what we call unbooked pre-sale, and we currently have HKD 14.1 billion. The unbooked pre-sale is like we pre-sell it, we have pre-sold it. For example, even like Hyll on Holland, we have sold all, but we only book it when we hand over. This is the common practice. Yeah.
I think- Sorry.
Maybe I made a correction. For Singapore and Malaysia, it is a little different, because for Singapore and Malaysia, it is typically done on a stage basis. That is just the practice in term of the contractual rights where the consumer actually financed the construction. In the case of U.K. and Australia And to some extent Hong Kong as well, is typically done at completion. So off-balance sheet until completion. So a little different between the countries, but I would say that the majority of the HKD 14 billion is actually to be received upon completion.
Yeah. So about that HKD 14 billion, how much is going to be received next year?
I will say, first, next year?
Yeah.
Just to give you some big project number, Kai Tak, I think that will be over, and this is in the course of the next few months, will be in the region of HKD 2 billion+. Just one project. And the counterparty is China Light & Power Company, Limited. So it is a pretty strong counterparty. I think on the in-inventory, sold but not settled, is about, and this is not talking about the others, sold but not settled, I think we have over HKD 1.5 billion. So the two added together is over HKD 4 billion. So you will see that from a cash flow stream perspective, in the coming few months, we are talking about months, it is over HKD 4 billion.
That is actually-
Just on two, just on the two items.
Got you. And that is attributable already to-
That is attributable 100% to us, yeah.
Got you. Thank you.
Good morning, management. My question about the sales in overseas. The domestic buyers and overseas buyers, what is the composition percentage? Hong Kong, U.K., and Hong Kong, you have the Kai Tak projects. The market acceptance is based on the situation. What is the outlook for the U.K.?
If you look at the Kai Tak project, the lump sum is much smaller than other projects. We don't have any worries that we have the confidence on that. For the clubhouse and the facilities, they're all top-notch and the joint venture now with the New World. For Australia, earlier, we used to have a lot of China market elements, but now because of shortage of residential supplies, that's why a lot of local buyers and everyone is happy.
Now we are approaching, we are trying to attract more local buyers, local buyers in Australia. U.K., we went to Nigeria, India, and different countries to sell our apartments because we have lesser Chinese buyers. That's why we go to different areas. We are trying to global buyers. The mid next year is when the first phase is complete. Actually, over 90% is already sold. International buyers, even for Nigeria buyers, they're very international, the composite.
I just want to make a comment on Australian. Australia, in terms of revenue or in terms of inventory, Australia is more important to us. Australia, of course, we sell our products and we're having international buyers and the local buyers. Particularly, after the Chinese buyers in Sydney, Melbourne, Perth, and Brisbane, a lot of the buyers are the user. They buy for themselves or the youth, they buy for their children and so forth. Compared with the 2020 rental growth, great a lot. Great a lot. Some reports say that over 30%, over 30% of a rental increase. Wendy mentioned, the yield is 6%-8%. It's very easy to get 6%-8% of the yield.
In Australia, Singapore, U.K., the same, London, Manchester, especially Manchester. Some overseas buyers, they are gradually paying more attention to Australia because the recent market is very good, particularly in 2020-2023. From the end of last year, beginning of this year, we gradually see then Victoria. When it was reopened, a lot of overseas students going back to Australia, working from home, going back to schools and so forth. That's why the more people, a lot of our investors went back to Australia as well. Which helped with our sales of inventory.
To answer your question, Wendy asked about inventory. On the matter. Actually, for the matter, sure. The apartment market in Australia and the U.K., we have seen that in the past few years, the new suppliers are getting less in the property market. In the property market. You can demand the supply after all. The demand side, we have seen that population is still growing, particularly in some big cities in Australia, some big cities in U.K., London, and Manchester. If you read news, you will see that for the housing supply is in short.
To answer your question and to add to your question, where are the buyers from? Actually, for the investment market, actually some the end users, they are both domestic market. It picked up very quickly. Some people thought that you could do it slowly, but now people get nervous because the rental is going up so quickly. That's why people just want to buy their own apartment quickly. Especially in Melbourne, you can look at our products. More and more domestic buyers are coming to us.
Of course, you can say that fundamentally, because of the sharp increase of a rental. That's why this is a structural change. To resolve this issue, it is not easy because when the interest rate is very high, a lot of our developers do not have the courage to hold a lot of land or get loans from the bank. That's why we have less supply in the market. This is a structural element. For me, in the next few years, you will find that if their supplies won't increase that much and their property price will roll quickly. We have seen these cycles in the past years.
I think that the interest rate won't sustain that long at that high level. For demand, after all, people have to work. They work, they go to big cities. Population, big cities are getting bigger and bigger, and we don't have enough supply. This is a structural issue. Look at the interest rate, how fast it changes. But we have seen the demand in domestic market has been going up all the time.
Today we have talking about the high interest rate. It's very important because we have several projects, for example, in Manchester. We have a positive carry, even though the interest rate is very high. The rental is 30%-40% of our growth. For investors and end users or domestic borrowing, have a positive carry is a very important thing.
Folks, congratulations on your strong performance in revenue. I have a question for you. Just now talk about the Palasino, the spinoff. What is the timetable? What about the fundraising? Any target in terms of amount?
The end of September, we filed the application. So far it is undergoing. We received questions, we answered them, and we provided the answers. Traditionally, during the peak season in Hong Kong, the Chinese New Year is the peak season, and this is a potential window. Of course, the stock market, we keep a very close eye on the stock market. In terms of our fundraising, we have the pre-IPO plan is the $20 million . 25 minimum free flow, that is 15%. Usually when you IPO, the valuation is usually higher than the pre-IPO. Otherwise, it will do. I do not know. I can give you a question about the present, but our idea is that at least 15% of the business. That is 10%, $20 million .
Okay, thank you. We overrun a little bit. Thank you very much. Thank you for your support.
Thank you. We come to the end of our investors presentation. Thanks again for joining.