Good evening, ladies and gentlemen. Welcome to Shui On Land's 2019 annual result announcement analyst briefing session. Due to the outbreak of the virus, we are announcing the results through this live audio broadcasting and online platform. It's also the first time of our management to do an online analyst briefing. We try to do as what we did in the physical meetings. You're welcome to submit your questions through this Q&A e-platform from the same platform we're using, and that will be available throughout the sessions. The management will answer the questions after the presentation. Same as the previous year, the result PPT has been uploaded to our company website, the investor relations session company presentation. Please feel free to download it from the website. Let me quickly introduce our management presenting today. Today we have our Chairman, Mr. Vincent Lo.
Yes.
Mr. Lo, you want to say hi?
Yes, hi.
Yeah. We also have Stephanie in Hong Kong, our Managing Director and Executive Director of Shui On Land. In Shanghai we have Douglas, our CFO, Managing Director and CIO. We also have Jessica Wang, our Managing Director of the group. They will be presenting the results and answer the questions. Without further ado, let me pass the mic to Mr. Lo to start.
Okay. Well, unfortunately, we cannot be face-to-face to do our presentation for you. I will try and be brief because we actually have quite a bit of PPT that my colleagues will have to go through with you. We have achieved quite stable profit basically because we have seen rental and related income grow by 12% last year, despite the fact that our revenue has dropped by 58%. At the board meeting just now, we have proposed a final dividend of CNY 0.084. If you add that to our interim, we have a total dividend of CNY 0.12 per share. We continue to focus on Shanghai as we are very bullish on Shanghai, especially on the commercial real estate. In the past year, we have made three purchases.
First of all is the buyback of Corporate Avenue 5. We have bought two pieces of land, Hong Shou Fang in Putuo District, a very prosperous commercial site. On Panlong Tiandi, which is located in Qingpu, we have purchased four residential sites. Later on, I will give you a bit more detail about these sites. We have maintained our gearing at 52%, an increase of 12 percentage points from end of 2018 due to the purchases of the two land parcels that I mentioned just now. We still have about CNY 11 billion in cash at banks, and I think that will put us in a very good position to withstand the current volatile macroeconomic conditions and the uncertainties coming from the global COVID-19 outbreak. End of last year, we have issued our first green bond, and I think that is a very encouraging sign.
On the next page, you can see the details of the Panlong project. It is in Qingpu, which is on the western part of Shanghai, and it is part of the Hongqiao CBD. Our site has Metro Line 17, and the Panlong station is within our site. It is just two stops from the Hongqiao railway station. The site area is 90,000 sq m, and the buildable floor area is 176,000 sq m, and we hold 80% of this site. We purchased the land at very attractive land cost. It is at RMB 22,000 per sq m. The next site is the Hong Shou Fang in Putuo District. It is nearby Nanjing West Road, and it is on Changshou Road, which is a very prosperous commercial street of Putuo District. It is also directly linked to the mass transit station, Metro Line 17 and 13.
It will be a Grade A office building with a Tiandi style retail. It is a clear site, so we can start work immediately. The land cost is also attractive at CNY 29,500 per sq m. This page you can see all the projects that we have in Shanghai. We have a total asset value end of last year of CNY 76 billion. Ownership for Shui On Land is 58%. For residential, we have a total of 568,000 sq m for development, and the estimated sellable resources would be CNY 57 billion, and attributable to Shui On Land is CNY 37.5 billion. On this page, you can see all the Our ratios are going up for our Shanghai projects. I will not go into detail here. The next page is the dividend per share, which I have mentioned already.
On the market and outlook, I think 2020 will be a very challenging year because of this COVID-19 global outbreak and also the China and U.S. relations. Despite the fact that the phase one trade deal has been signed, I believe the trade tension will continue. The COVID-19, I think, will impact the world very negatively because we are now seeing a global pandemic. In the West, I think this is just starting. They are not really in a very good position to handle it like China. So we are happy to see that the COVID-19 is basically contained in China. As far as the market is concerned, I think we will have to monitor because it will take time to recover.
Unfortunately, the COVID-19 will likely have a negative impact on our performance in 2020 because we are making rental concessions and subsidies to our commercial tenants. We are seeing delays in our construction schedules and our anticipated pre-sale timing. We are monitoring very closely our two sites in Wuhan, how that will recover. On the whole, we are still confident about the Wuhan market. We will continue to maintain a very prudent positioning against this backdrop because I believe we are looking at a global recession, and it is hard to say how and when it will stop. We will continue to maintain a cautious and disciplined approach in making new investment. We have a healthy gearing at 52%, and we will try and maintain that at no more than 60%.
We have about CNY 12 billion in cash, and I think that will put us in a very strong position to face up to this current downturn. Maybe I will stop there and let Douglas take you through the financial highlights.
Thank you, Mr. Chairman. I will walk you through the financial highlights for 2019. Next page. The key points, a lot of them have already been covered by Mr. Lo, so I will just go straight into the P&L. Next page. You can see revenue in 2019 is at CNY 10.4 billion, represent a 58% year-on-year decline. It was a pretty big decline mainly because some of you may recall, in 2018, we recognized the revenue and profit from the transaction we did with COFCO Group, where we sold 50% interest in two residential sites in our Rui Hong City project in Shanghai. The revenue from that transaction alone is about CNY 15 billion in 2018. So it is not really exactly an apple-to-apple comparison now because we have a very large exceptional transaction in 2018.
So if we take out this exceptional transaction, the residential sales in 2019 was about CNY 5.9 billion, compared to about CNY 7 billion in 2018. The decline actually was not as significant as the headline. We had lower residential sales revenue because the actual amount of property we completed and handed over to buyers last year was less. That was one of the main factor. But rental income you can see have, with developed properties, produced a good growth, 12% year-on-year to CNY 2.2 billion. Then hotel construction, other, it is about CNY 900 million or so. We take our cost of sales, gross profit is about CNY 5.3 billion, with a gross profit margin 51%. Other income is mainly interest income and some dividend income in our JV projects.
Then taking our operating expenses, operating profit is about CNY 4.87 billion, which is about 25% year-on-year decline. Again, the decline is mainly because of the higher base in 2018 because of the transaction with COFCO. On the investment properties revaluation, it was pretty stable last year. We only recognized an increase in fair value of about CNY 256 million. That is about 0.6% of the total valuation of our investment property portfolio. Most of the properties have only saw less than 1% revaluation in 2019. Other gain and losses, CNY 150 million is basically pretty much all related to hedging costs, where we hedge our foreign currency borrowings against our CNY. Then the reversal of the impairment loss. Again, this figure was actually recognized in first half 2019.
Some of you may remember it is related to a deal transaction we did with Country Garden about three years ago, where we sold the sandbox four sites to them. But the final payment was contingent on completion of relocation. In 2018 there was some uncertainty about the final relocation time. We made a provision against that, the last payment, but the relocation was done, and payment was paid in the first half of 2019. Overall finance costs is down 5%. Obviously, the CNY was relatively weak in the second half of last year because of trade war with U.S. We see a slight increase in the net exchange loss. But if we just look at interest payment, it was actually down 10%. We have been able to manage our interest costs reasonably well. Next page.
If we take out tax profit for the year, CNY 2.5 billion, then taking out minority interest, profit attributable to Shui On Land is CNY 1.93 billion, up 1%. As the chairman mentioned, the board recommend a final dividend of CNY 0.084, which is same as 2018. Then a full-year dividend was recommended at CNY 0.12. The recognized property sales breakdown for your reference. Most of them came from Linkview phase IV, which was completed, and we handed over most of the units in 2019, and then in Foshan. You can see the comparison with 2018 and that one-off transaction I mentioned in 2018, which we sold 50% interest in lot 1 and lot 7 in Rui Hong Xin Cheng River City, with a revenue of about CNY 15 billion in 2018. Next page.
Locked-in sales, basically contracted sales we have not yet handed over or haven't recognized the revenue, so it's about almost CNY 12 billion, CNY 11.8 billion at the end of last year. It came mostly from Rui Hong City Lot 1, which we pre-sold towards the end of 2019. Also from Wuhan Tiandi Lot B10, which we pre-sold both in 2018 and 2019. The rest is coming from Chongqing and Foshan and some of our other projects. Our financial position. You can see that the cash on hand is about CNY 12 billion, and the total debt increased about 10% to about CNY 37.7 billion. So our net debt has increased last year. The increase is mainly because we actually spent quite a bit of new investment in 2019. The chairman mentioned that in the second half of last year, we acquired two sites in Shanghai.
First half of last year, we completed a purchase of Brookfield's share in the China Xintiandi subsidiary. We also, along with Manulife and China Life, completed the purchase of Corporate Avenue 5, the office building in Shanghai. So each four transactions together account for more than CNY 10 billion of investment CapEx last year. So it was quite a big year for us, particularly investing in Shanghai, which is one of our key strategies, is to increase our market leadership position and increase our presence in the Shanghai market. That's why we have an increase in borrowing and an increase in gearing. This is just graphically showing you our changes over the years. Even though we have seen a bounce in our net gearing, we believe that around 62% is still a pretty healthy level and a sustainable level. Okay.
In February this year, we took advantage of the market window and successfully completed a liability management on our debts in 2021. So we commenced an exchange and tender offer to two senior notes maturing next year. In conjunction, we also issued a new five-year US dollar bond to finance part of that exchange and tendering process. So we completed this exercise on March 2. Overall, we basically exchanged or tendered 39% of the $2 notes due next year. Particularly for the February 2021, we either tendered or exchanged about 48% of the outstanding total. So the total amount is about $391 million, which basically we have either redeemed or we have exchanged for the new five-year note. The final issue in size of the new note is $490 million, five years at 5.5%.
I think we were fortunate to complete this right before the market window collapsed in March. Okay, so debt profile. As of end of last year, if we look at one year, so basically 2020, the total repayment outstanding is CNY 5.8 billion. But since then, as of March 15, we have repaid another CNY 760 million. So outstanding this year would be somewhere around CNY 5 billion. As I mentioned, we have cash on hand of about CNY 12 billion. So our repayment pressure for this year is relatively light. I also mentioned that we have already started to manage our maturity in 2021 as well. So we are pretty comfortable about our cash flow and our balance sheet condition. This is just for your reference, the various maturity for our senior notes.
Okay, and lastly, on our balance sheet, we have about CNY 108 billion of total assets, of which more than 50% is commercial investment property-related. 42% is completed IP, generating recurrent income. We believe that this will be able to provide a more solid and stable foundation for the company for the future years. I will stop here and I will turn over to Stephanie to talk about the investment property portfolio.
Thanks, Douglas. Let me run everyone through our investment property portfolio. Our consolidated rental income for 2019 stood at CNY 2.25 billion, and this reflects a year-on-year growth of 12%, versus approximately CNY 2 billion of rental income in 2018. If we include rental income from our JV portfolio that we manage as well, the rental income growth achieved is 17% year-on-year. The growth is largely driven this year by the reopening of Xintiandi Plaza in Shanghai, as well as the opening of Horizon North Mall in Wuhan. There are a couple of numbers here I would like to highlight for you. The properties such as The Hub that saw 14% increase in rental income down to Wuhan Tiandi that saw a 29% growth, as well as Foshan Lingnan Tiandi that saw 20% growth.
These are all very healthy growth rate figures that we have been very pleased about, largely driven by an increase in occupancy as well as new openings. There are two numbers that I particularly like to highlight, which are the drops in rental and related income. Firstly, at Shanghai Xintiandi, the first line, we see a 19% decrease in rental income here. This is due to the fact that the south block, the mall in that block, in Xintiandi is undergoing a large AEI. We started this in the beginning of 2019. That represents about 15,000 sq m of leasable GFA, which is 28% of the total leasable GFA in Xintiandi. Therefore, this 19% drop last year. We plan on reopening that mall around the end of this year, all factors accounted for.
We hope that this new rental income will hit our books by 2021. Also would like to highlight a drop in Shanghai Ruihong Xincheng as a JV property. There was a drop in the occupancy down to 78%, as well as a drop in our rental income by 3%. The reason being that in Palette, which is a residential shopping mall under one of our residential sites, in the basement, Emart's lease, which was approximately 10,000 sq m, came to end. Essentially, we did a large-scale AEI after they left and after the lease was finished. This is what is causing the drop in rental income. Similar to the south block, we hope that it will finish at the end of this year and complete and reopen, and therefore, we will have additional rental income for 2021.
The next page, you can see that on the left-hand chart, you can see that our CAGR for our rental income portfolio has a double-digit growth of 13%. From the contribution point of view, Shanghai contributes about 70% of our rental income. Other cities, such as Wuhan, contribute 13%, 10% from Foshan, and the remainder from Chongqing and Nanjing. We saw a 14% increase from the Shanghai portfolio in rental income, and the other cities had a 28% increase last year, primarily driven by Wuhan and Foshan projects. On the next page, I'd like to just share briefly with you some of our thinking behind our leasing strategy and some of the progress that we've made. We plan to have a first in Shanghai and first in each city flagship leasing policy. This is a conscious effort to try and drive traffic and drive sales.
We've always branded Xintiandi as a social and cultural destination, and this is very much in line with our strategy there. Last year alone, we brought in 57 first in China brands and 78 first in each city tenants, including Shake Shack from New York, Studios from Tokyo, Maison Kitsuné from Paris, Miller Harris from London, Lelecha from Taiwan, as well as Tao Tao Ju from Guangzhou. Paul Pairet, a three-star Michelin chef, opened a new French bistro at Xintiandi as well. There are a lot of new flagship concepts from very mature brands that opened a new flagship concept at our property, such as Tom Ford Beauty, Jo Malone London with their first streetscape and garden concept in Xintiandi, Venchi, the chocolate brand, PS.Cafe from Singapore, and the list goes on.
We are very pleased with this progress so far, and we have seen it drive substantial sales and traffic to our sites. In the next page, as an extension to and a very important aspect of creating a cultural and social destination, we have launched over 1,100 events organized for our retail portfolio, and it's seen a shopper traffic increase of 18% year-on-year last year. Retail sales were up 16%. Our iTiandi, which is our loyalty program, saw our membership base increase 46%. A lot of these events include Xintiandi Performing Arts Festival, Shanghai Design Week, Shanghai Fashion Week, Lumiere Shanghai. A lot of these IPs are recurring within our portfolio and actually help to brand and drive a lot of the traffic within our sites.
In the next page, I'd just like to share a little bit more with you, given the context of what's going on around the world right now, about our retail strategy this year. COVID-19 naturally has hit not just ourselves, but across the platform, retail sales across the country. There are a couple of things that we've been maintaining and trying to capture in terms of opportunities within the market. For instance, because of COVID-19, we weren't able to hold Shanghai Fashion Week as originally planned, and the on-site fashion week was canceled. But as a result, we've partnered with Shanghai Fashion Week, as well as Tmall, to launch the first global Shanghai Fashion Week online. Therefore, it's actually ongoing right now. The shows were live broadcast on our platform as well as Tmall.
After the show, we had a live broadcast center within Social House by Xintiandi, where the KOLs, as well as the designers themselves, can come and do their live broadcasts and actually introduce their products and their brands. Afterwards, people can actually directly purchase the products from Tmall or from our iTandi app. This is actually a new opportunity that we hope to capture and continue to collaborate on going forward. In terms of supporting our tenants, naturally through this crisis, the point is to help our tenants bridge these couple of months of very challenging times. As much as possible, apart from some rental concessions that we have already announced, we are also using and trying to leverage our community experience.
For instance, for F&B tenants across our portfolio, we have tried to launch takeout through our iTiandi app, where you can order takeout, and it will be delivered to our office and residential tenants. A lot of our retail tenants have also launched some of their products on our iTiandi app, and the first city to actually take on this challenge to launch this app was in Wuhan, because they have actually been on lockdown for the longest period of time. We actually are still fully in belief of our social strategy. We believe people still need a social environment, therefore, we will continue to actually upgrade our O2O strategy going forward and improve our online and offline experience for both social and cultural destinations within our portfolio, and further enhance our new retail strategy going forward. Here is a simple description of our portfolio in Shanghai.
As the chairman and Douglas mentioned, we acquired a new piece of land in Shanghai called Hong Shou Fang, and this is primarily an office property within the inner ring of Shanghai. We are one of the leading landlords in Shanghai now with one of the largest commercial property portfolios. The property value comes to CNY 76 billion, and of the 1.68 million that buildable GFA, 52% is already complete with rental income, and it is at a value of CNY 41 billion. The remainder of the GFA is as land bank or under development. Within our commercial portfolio in Shanghai, as Douglas mentioned earlier, we completed the transaction with Brookfield by acquiring their previous shares in the China Xintiandi portfolio. We also reacquired Corporate Avenue 5 through the Shui On Land Core-Plus Office Venture investment platform and with the new land acquisition, Hong Shou Fang, at the end of last year.
Our effective interest in our commercial portfolio in Shanghai rose to 58% at the end of last year, versus 48% in 2018. The value attributable to the company increased to CNY 44 billion accordingly, which represents an increase of 30%. There are two projects that I would just like to simply introduce here. The first is what we mentioned six months ago as Lot 123/124. Because this is a partnership with CPIC, we have decided on a name for the project, which is Taipingyang Xintiandi. This is a project that we started construction at the end of last year, in October last year, and it is 192,000 sq m of Grade-A office within our Xintiandi community, as well as 88,000 sq m of retail. The office is due to complete in phases from 2022 - 2024, and the retail will open within 2023.
We own approximately 25% of this project together with CPIC and Yongye. Next page. The next project is Shanghai Ruihong Tiandi, Hall of the Sun. This project is what we originally referred to as Lot 10. The land was fully relocated at the end of 2017, and we started construction in 2018. It is 147,000 sq m of new Grade-A office plus 183,000 sq m of retail as a mall within our Tiandi commercial spine. It is due to complete within 2021 - 2022 in phases from both the office and retail. This is a rather large supply within the inner ring of Shanghai, and the location is actually very good because it is very close to Lujiazui.
We are very hopeful on the launch of this project, and we have a lot of new concepts, including a new food hall that takes up the top three floors of this retail complex that we are very excited to launch to the market. Having said that, we are cautiously optimistic given the current retail climate in China, but we don't foresee any delay in the launch at all. At this point, I will leave it to Jessica to introduce more on our property development.
Okay. Thank you, Stephanie. I would like to share with you all about the group over sales in 2019. In 2019, the group accumulated contract property sales amounted to CNY 12 billion, decreased by 44% from 2018. The decline, as mentioned by Douglas, was mainly due to the reduced asset disposal and the residential launch plan in 2019. Our residential property sales were very strong. By the end of last year, the contract sales and subscribed sales exceeded CNY 15 billion, of which the residential contract sales reached CNY 12 billion, exceeded our 2019 sales target, which is CNY 10 billion. Apart from that, the group has recorded a total of CNY 2,912 million of subscribed sales, which is expected to be turned into contract sales in the following months. Next. Here I would like to highlight Ruihong Xincheng Lot 1.
The project got great response from the market with a total sales of CNY 6.3 billion on the first day of launch, achieving the highest single-day sales record for Shanghai inner ring projects in 2019. From the analysis above, we can see that over 70% of buyers are under 40 years old, and over 70% of the buyers are upgrade demand. More than 85% of buyers living or working around, which indicating that the project is highly appealing to the local residents. Next. Here we can see the group has approximately 362,000 sq m of residential GFA across various projects, including Shanghai Ruihong Xincheng Lot 1, Lakeville phase V, Wuhan Tiandi, and Wuhan Optics Valley Innovation Tiandi, and Foshan Lingnan Tiandi as well. They will be available for sale or presale in 2020.
The actual timetable for the launch will depend on the market conditions as well as the development of the global COVID-19 outbreak. Next. Here comes some detailed introduction for the projects. You can see this is the Taipingqiao Lakeville phase V, which has 78,000 sq m of sellable GFA. The project enjoys competitive advantages. It is adjacent to the central greenland of Taipingqiao area, and it is also the last parcel of pure residential in Taipingqiao area. Lakeville phase V is designed by REX, the world-famous architecture design firm, who is the designer of the top luxury residential projects around the Central Park in New York. We are considering to launch the project in Q2 or Q3 this year. Until now, we have more than 250 groups of potential customers with strong intentions to buy units here.
We firmly believe that with our good reputation, Lakeville will also get very good market response. Next. Here is Rui Hong Xin Cheng Lot 1. As I mentioned before, it is continuously in hot sales. Although the real estate market was affected by the COVID-19 in Q1, we still have 55 units who are subscribed, and 99 units were contracted. Next. Apart from the projects I mentioned before, we are preparing for launch Foshan Lingnan TianDi Lot 38. Although Wuhan is still very hit by the COVID-19, we are still confident about the market in Wuhan because, as we can see, Wuhan Tiandi Lot B10 was launched twice last year, and all units were sold out on the launch day. Wuhan Optics Valley Innovation Tiandi will be launched in the second half of the year as well. Next.
As for the group residential sellable resources, the total GFA stood at 1.37 million sq m as of the end of 2019, which is valued at CNY 77 billion, and the estimated attributable value to SO is CNY 51 billion. As we can see from the table, the major sellable resources are in Shanghai, with a total sellable GFA of 568,000 sq m. Other cities have 800,000 sq m of residential property available for sale in the future. I believe with these residential projects, the group can maintain a good performance and generate more cash flow and profits in the coming years. Next. While having plenty of residential properties available for sale, the group also has sufficient resources in terms of commercial assets in Shanghai and other cities, which will fuel the growth of rental and help with capital recovery, recycling.
As of the end of last year, the group has had 3.26 million sq m of commercial landbank under construction or ready for future development, including around 2 million sq m of office and 1.25 million sq m of retail. On the next page, I will hand over to Stephanie to talk about ESG and sustainable development strategy.
Thanks, Jessica. Here, I would just like to very simply introduce what we have been looking at and what we have achieved in the last year. There are a couple key milestones that we achieved last year. First is that we launched our first green bond within Shui On Land. Douglas mentioned this, as the chairman mentioned, so I will not go into much detail here. A lot of these funds will be used to fund sustainable projects such as Five Corporate Avenue, which is the LEED-rated, three-star rated building in Shanghai, as well as other projects in the future. We are really happy to announce that Shanghai Xintiandi received the first global WELL Community certification in 2019 by the WELL Building Institute, and it covers Shui On Plaza, Xintiandi Plaza, The Langham, Shanghai, Xintiandi, and Xintiandi Style together, as well as Casa Lakeville.
This is quite a key milestone for us and WELL certification is becoming much more mainstream now going forward, and it is very focused on the healthy and green development of the community that is less based on hardware, but also combined with software and management as well. In terms of our carbon emissions, we had six major guidelines and goals that was issued in 2017. One of which was a reduction in carbon emission from 2011's figures to 2021. We had to reduce our carbon emissions by one-third, and I am very happy to announce that we are very close to that target, so we are very confident that we will be able to meet this goal by next year, by 2021. In the next page, you will see that we have 1.6 million sq m of leasable GFA that are green-certified commercial buildings.
Of that 1.62 million, 80% is already completed and already in operations, and we continue to maintain a very high green building standard. Going forward, because sustainability has always been a key strategy within our company, we continue to push ourselves to broaden our understanding of sustainability as well as better integrate sustainability within our business strategy, business model, as well as operating standards. First thing that we did was our sustainable development committee is now reporting to the board level, reports directly to our board of directors. In 2020, which is this year, we are launching a new 10-year sustainability development strategy. We can share more at the next announcement. It is what we call our 5C Sustainability Strategy that revolves around Clean, which is more green and healthy building.
Culture, which is something that we have always been dear to our heart, where we talk about more cultural heritage preservation as well as cultural exchange with our events and programs. Community, which is how we conceive of and manage our live, work, play, learn projects, master plan communities, as well as how we actually give back in our social responsibility to these communities and the cities that we operate in. Care is in relation to how we think about employee development as well as employee care. Corporate governance, I think goes without saying, we want to hold ourselves to world-class management standards. I will stop here.