Good afternoon, ladies and gentlemen. Welcome to Swire Properties Interim Results Analyst Briefing. Let me first introduce the host of today's briefing. Onstage, we have Mr. Tim Blackburn, Chief Executive of Swire Properties. Ms. Fanny Lung, Finance Director of Swire Properties. Tim and Fannie will walk us through the interim results this year, then we will proceed to a Q&A session. Before we start the presentation, we'd like to show you a video highlighting the company's key developments and milestones in the first six months this year. Hope you enjoyed the video. May I now invite Tim and Fannie to take us through the presentation. Tim, please.
Great. Thank you. Thank you, Wayne. Good afternoon, everyone, and welcome to the Swire Properties 2022 interim results briefing. As usual, I'll take you through the strategy and the results highlights, and I'll touch on the portfolios, and then I'll hand over to Fanny, who'll cover the financial highlights and the sustainable development section. I'll close with comments on prospects for the second half of the year. So reflecting on the headwinds and the ongoing challenges presented by the COVID-19 pandemic in Hong Kong and the Chinese mainland, I'm pleased to present the solid set of results for the first half of 2022. In terms of recurring profit, we reported a slight reduction relative to the first half of 2021.
The underlying profit was also slightly down on the same period last year, due primarily to the preventative measures taken to manage the pandemic during the fifth wave in Hong Kong and the outbreak in Shanghai, which ended in early June. Our largest business, our Hong Kong office portfolio, has continued to be very resilient with overall occupancy of 96% and occupancy at Pacific Place currently at 97%. While at Taikoo Place, occupancy at One Island East and One Taikoo Place are currently at 98%. We're looking forward to the completion of our latest grade A office tower, Two Taikoo Place, later this year, where pre-leasing commitments are approaching 50%, reflecting the strong demand for high quality grade A office buildings.
On the retail front in Hong Kong, we're 100% let at Cityplaza and Citygate Outlets and 96% at Pacific Place. While retail sales were down between 2% and 5% as a result of the fifth wave, we're seeing positive signs of beginnings of a recovery in retail sales since June. In the Chinese Mainland, attributable retail gross rental has increased 9% thanks to the contributions from our latest two projects, Taikoo Li Sanlitun West in Beijing and Taikoo Li Qiantan in Pudong in Shanghai. In retail sales, however, were down 19% due to the preventive measures taken in Shanghai and the COVID-19 related disruption in other cities.
On the strategy side, we have been making good progress with our plans for strategic capital recycling, divesting of undeveloped site in Fort Lauderdale at the beginning of this year, and continue the divestment of car parks in Taikoo Shing. On the investment front, we're delighted to announce the Taikoo Li Xi'an project in March, since when we've been successful in securing 100% ownership of the Zung Fu Industrial Building in Quarry Bay for potential redevelopment in Taikoo Place, and we increased our interest in Citygate Outlets. Most recently, we're very pleased to win the government land sale tender for 269 Queen's Road East in Wan Chai, which is a valuable addition to our residential pipeline. Finally, we'll be raising the 2022 first interim dividend by 3%, which is consistent with our ambition to deliver sustained dividend growth.
In terms of developments in the first half, we've been making good progress on all fronts. In Hong Kong, we have attained 100% ownership of the Zung Fu Industrial Building, the potential office redevelopment, and we've acquired a residential trading site in Queen's Road East, as I mentioned. At Eight Star Street, having secured the occupation permit, we'll be making plans to sell the remaining nine units later this year. We're also delighted to finally open the new Silveri Hong Kong-MGallery at Citygate in Tung Chung, which has been doing very well in the staycation market. In the Chinese Mainland, progress with Taikoo Li Xi'an, the joint venture with a subsidiary of the Qujiang District government, is progressing well as our seventh major retail-led project in the Chinese Mainland.
We're also delighted to announce that we've managed to secure two new hotels, hotel management agreements for The House Collective, one in Tokyo, and most recently, we've announced a second one in Shenzhen. These will be managed by Swire Hotels, but owned by third parties. In March, at the year-end, we announced our plan to invest HKD 100 billion over the next decade, and we are making good progress in the first half in all three core markets, Hong Kong, mainland China, and Southeast Asia on our strategic investments.
In terms of the growth pipeline, the slide illustrates the phasing of various new projects to strengthen the retail footprint in the Chinese Mainland and build out our two flagship developments at Pacific Place and Taikoo Place here in Hong Kong, and to develop the Land Bank to pursue residential trading opportunities in our core markets in Hong Kong as well as in Southeast Asia. This represents a healthy mix which ensures we're well-positioned over the next few years. In terms of new projects, our next opening will be phase I of the ZHANGYUAN Heritage Restoration Project in Jing'an District in Shanghai in October, which is adjacent to our HKRI Joint Venture, followed by Taikoo Place later in the year.
This slide, I just wanted to zoom in for a minute on Taikoo Place to illustrate the progress that the team has been making in developing Taikoo Place as a global business district with a variety of office solutions, hotels, service apartments, retail, and amenities. The yellow area, the highlighted area, is Two Taikoo Place, will be completed later this year, surrounded by large public spaces at Taikoo Square and Taikoo Garden. The pink areas are buildings which are currently under compulsory sale application for potential development in the future. We're really excited about the long-term placemaking opportunities at Taikoo Place.
Moving from Hong Kong to Chinese Mainland, as I mentioned, our next project, the retail-led mixed-use project, will be the development of Taikoo Li in Xi'an in the Small Wild Goose Pagoda Historical and Cultural Zone, the fourth generation and the largest of our Taikoo Li concepts to date. Moving on to the investment portfolio. Hong Kong office performance has been resilient despite the weak market conditions. We continue to see negative rental reversions at Pacific Place to a lesser degree at other Taikoo Place office towers, while rental reversions at One Island East and Taikoo Place have remained flat. In combining our Taikoo Place and Pacific Place portfolios, overall occupancy is still high at 96%, whilst attributable gross rental income, just over HKD 3 billion, was down 1% on last year.
The attributable valuation of the office portfolio was flat versus year-end 2021 at HKD 171.4 billion. In terms of Hong Kong office, we've got three projects highlighted in this slide illustrating development in progress. We continue with our commitments to upgrade and to improve our core Hong Kong office portfolio. In Wan Chai, IWG is preparing to launch the new Spaces Center at 8 Queen's Road East, while at 46-56 Queen's Road East, project is on track to complete next year and expand our Pacific Place portfolio. As I mentioned, two Taikoo Place will be completed later this year. We're delighted to be approaching the 50% pre-leasing, pre-commitment milestone as we see demand from tenants seeking to realize their ESG ambitions. Turning to Hong Kong retail, the impact of the fifth wave has been very disruptive.
I'm pleased to report the portfolio is almost fully let thanks to the sustained partnership approach with the brands, where we provided some rental support on a case-by-case basis where necessary. We are now seeing a rebound in local consumption, thanks to the marketing and promotional activities in our malls, combined with the assistance of the government's consumption voucher scheme. Though in the first half, retail sales were down between 2% and 5%, while attributable gross rental income was down 2% on a cash concession basis. The attributable valuation for the overall retail portfolio was slightly up at HKD 46.1 billion.
Turning to the Chinese Mainland, the overall portfolio contributed 39% of attributable gross rental income in the first half of 2022, with the two new retail projects which we opened last year contributed to the 8% growth in attributable gross rental income. This slide just highlights that the Chinese Mainland retail is now the second-largest rental contributor after Hong Kong office, and we remain confident in the prospects for our retail portfolio in the Chinese Mainland. Talking about Chinese Mainland retail, after a strong start in the first quarter, we had a challenging period. However, retail performance has been recovering steadily since the preventive measures were lifted, and sales growth, having been heavily impacted by these measures, in Shanghai and Beijing in particular, is improving where we've seen less impact in Chengdu and in Guangzhou.
Occupancy levels, however, have remained high at between 91% and 100%, and attributable gross rental was up 9% year-on-year. The attributable valuation of HKD 48.9 billion was down slightly compared to December 2021. The Chinese mainland office, clearly another very challenging period during the preventive measures. But the Chinese mainland office has reported a solid performance and overall occupancy has continued to improve, especially at INDIGO in Beijing, is now between 94% and 100%, while gross rental income increased by 5% versus the same period last year. The attributable valuation of HKD 13.6 billion, slightly down reflecting weaker market conditions. The leasing expiry profile for Hong Kong and the Chinese mainland is well spread out with a diverse tenant base across the retail and office portfolios.
This slide highlights that the office expiries in Hong Kong and mainland China this year are between 3.7% and 4.4%, means we're relatively well-placed given the current outlook for the office market. This slide illustrates the company's two major growth engines in Hong Kong and in mainland China. We have a healthy pipeline of investment properties. We're on track to increase the attributable GFA in Hong Kong by 17%, and in mainland China by 35% over the next few years. I've included a slide here just turning away from Hong Kong and mainland China to Miami. Miami Brickell City Centre's retail portfolio has performed extremely well in the first half, with overall occupancy continuing to increase.
Trade mix upgrade is progressing well and retail sales have increased by 36% in the first half due to strong domestic demand in Florida, and this trend is expected to continue in the second half. As far as the Hong Kong trading portfolio is concerned, I wanted to highlight progress which the team has been making on the trading front in our core market here in Hong Kong and also in the four cities we've prioritized in Southeast Asia. We continue to build a strong pipeline in Hong Kong. 28 of 37 units of Eight Star Street have been sold, and riding on the sales performance of Eight Star Street, we were delighted to win the land sale tender for the 269 Queen's Road East last month.
In the meantime, we're making good progress on three other projects in Wan Chai, in Chai Wan, and in Quarry Bay. The graph in the top right illustrates the projected resi completions over the next few years, representing just over 1 million sq ft on an attributable basis. In Southeast Asia, we're continuing to build a presence across Vietnam, Indonesia, Thailand, and Singapore with a focus on high-quality residential projects in great locations. The most recent pre-sales launch being at Savyavasa in South Jakarta with approximately 400 units, which was launched in March. We look forward to further developments in this region in the future. Before handing over to Fanny, I just wanted to touch on our hotel portfolio, where operating conditions continue to be very challenging in Hong Kong and in the Chinese Mainland.
However, we've seen a strong performance in our U.S. hotels and remain confident in the recovery of our hotels once border restrictions have been lifted. We do have some exciting news, as I mentioned, regarding the strategy to expand the House Collective, and we've recently announced the first house outside Greater China, which will be in Tokyo, in addition to our first hotel project in Shenzhen. We look forward to more developments here in the future as we seek to expand both the EAST brand and the House brands across the region. At this stage, I'll hand over to Fanny.
Thank you, Tim. Okay. Total underlying profit for the first half of 2022 was HKD 4.14 billion, 8% reduction from that of the same period last year. As you can see from the waterfall chart on the right, the main reason for the drop was the significant reduction in profit from divestment. Recurring underlying profit was HKD 3.643 billion, reduced slightly by 2%. Reflecting lower retail rental income from Hong Kong and high operating costs, as well as increased losses from hotels, partly offset by the higher retail rental income from the Chinese mainland. Underlying profit from divestment in the first half of 2022 was mainly derived from the disposal of 164 Taikoo Shing car parking spaces, as well as the land sale in Fort Lauderdale in the United States.
Total attributable gross rental income for the first half were HKD 7.183 billion. More or less the same as that of last year. This reflected the benefit of a balanced portfolio where the negative impact in Hong Kong portfolio were offset by the positive impact in the Chinese mainland portfolio. Hong Kong office portfolio was resilient with committed occupancy rate. Gross rental income reduced slightly by 1% only. Hong Kong retail portfolio was severely disrupted by the COVID-19 fifth wave, with significant drop in the sales and the footfall in the first quarter. We have a strong rebound in the second quarter. The rental income reduced by 9%.
The reduction reflected the impact of the COVID-19, the fifth wave, and in part, the amortization of the rental concession given in the previous years. On a cash rental concession basis, attributable rental income only decreased by 2%. Rental income from the Chinese mainland retail portfolio increased by 9%. Retail sales began with a very strong start in the beginning of the year, but was affected to varying degrees by COVID-19 resurgence, particularly in Shanghai and Beijing in the second quarter. The increase in the rental reflected contributions from the newly opened Taikoo Li Sanlitun West and the Taikoo Li Qiantan. Chinese mainland office portfolio had a solid performance in the first half of 2022. Rental income increased by 5%. There was improved occupancy in the Beijing and the Shanghai portfolio.
Rental income for the other category dropped by 22%, primarily due to the loss of rental income from the EAST Miami serviced apartment, which was sold in November 2021. Despite the reduction in the underlying profit, the company declared that the first interim dividend of HKD 0.32 per share in the first half of 2022, 3% up, as compared to the same period last year. We aim to deliver mid-single digit dividend growth per annum. The increase in dividend demonstrated our commitment to deliver this particular target. Total investment property value increased by 1% to HKD 271 billion. The waterfall chart on the left shows the key changes in the investment properties value.
There were HKD 701 million fair value gains, of which HKD 573 million fair value loss was for the completed properties. There were fair value gains of HKD 1.274 billion for properties under development. For completed investment properties, there were fair value losses in the office investment properties in Hong Kong and the Chinese mainland, partly offset by the fair value gains in the car parking space in Hong Kong and the investment properties in the United States. There were fair value gains in respect of certain properties held for development in Hong Kong, reflecting the redevelopment value of those properties. There were, in total, net CapEx of HKD 4.911 billion, primarily due to the land acquisition of Taikoo Li Xi'an.
There were also exchange losses in respect of the investment properties in the Chinese mainland, representing the renminbi depreciation over the period. There was no change in the cap rate for all of our core properties across Hong Kong, Chinese mainland, and the United States. Financial positions of the company remains very strong, with net debt as at the end of June 2022, at HKD 15.5 billion, with the gearing still very low at 5.3%. The increase in net debt primarily reflected the funding for Taikoo Li Xi'an and the CapEx on investment properties and properties for sale in Hong Kong, partly offset by the proceeds from divestment in Hong Kong and in the United States. The key highlights on this slide are, number one, we have a very healthy debt maturity profile.
Number two, we have adequate liquidity headroom with total cash and undrawn committed facilities amounting to HKD 12.8 billion. Number three, our fixed debt was very high at 72%. Also, the credit rating of the company remained unchanged, which is single A under Fitch and A2 under Moody's. Our currency profile pretty much was in relation to Hong Kong dollar and US dollar. Overall, this is a very healthy debt and liquidity profile. On total capital commitment, as at the end of June 2022, we're at HKD 25.6 billion, of which HKD 13 billion was for Hong Kong and HKD 12.6 billion was for Chinese Mainland. The Hong Kong portion mainly reflected the redevelopment of Zung Fu and Wah Ha buildings, CapEx for two Taikoo Place, as well as Queen's Road East.
For the Chinese Mainland, the CapEx was mainly for INDIGO Phase II and Taikoo Li Qiantan developments, and other CapEx for the Chinese Mainland projects. Capital recycling is a very important strategy for us to fund our growth plan. This slide summarizes the disposal proceeds generated in the past few years. In total, we have generated HKD 43.8 billion from the capital recycling exercise. I will now move on to talk about the sustainable development in order to give you some updates on the SD fund. We have recently launched our SD communications campaign. This year's theme is Fighting Climate Change, Together We Can. Through a series of online and offline communication channels, we wish to empower everyone to work together with us in achieving our 1.5 degree Celsius ambitions.
To accelerate our efforts in fighting climate change, Swire Properties ramped up our science-based targets to a more stringent 1.5-degree Celsius-aligned pathway, which were approved by the Science Based Targets initiative in October 2021. This 1.5-degree Celsius-aligned SBT will ensure we achieve deep decarbonization in the near term, and also sets the company to advance to the net zero target by 2050. On the chart on the left, you can see that we reduced 23% absolute scope one and two carbon emissions in 2021, and our target is to reduce 25% by 2025. To ensure we will continue to make further reduction, we continue to explore innovative low carbon technologies, management practice, and explore on-site and off-site renewable energy opportunities across our portfolios.
We continue to roll out the smart energy management platform across our global portfolio. Since implementation, we have achieved over 500,000 kilowatts of savings. Another innovative technology is the pilot of integrated direct current microgrid at Taikoo Li Sanlitun, Beijing, which seeks to reduce the electricity conversion loss, as well as supporting PV panels and low-carbon fuel cell applications. This innovative technology is estimated to bring approximately 10% carbon emission reduction compared to the conventional energy generation systems. On-site renewable energy generation, we planned to install more PV panels in Taikoo Place buildings in phases. In April 2022, we completed the installation of 65-kilowatt PV system in Dorset House, Taikoo Place. Since 2016, we have already set targets.
Our target is by 2025, we have 100% of our new development and 90% of our existing developments to achieve the highest environmental building rating. We have been achieving this target, and we will continue to prioritize this in our future developments. I'm very happy to share that Taikoo Hui, Guangzhou and Taikoo Li Sanlitun, Beijing both have received the LEED Platinum certification in February and June this year. Our green building leadership was also recognized by the Green Building Awards of the Hong Kong Green Building Council. The first award is the Pioneer Award in Green Building Leadership Facilities Management. Swire Properties is the first and the only developer to win this top award in the Green Building Leadership category for three years running. The second award is Grand Award in New Building category for Two Taikoo Place.
On SD, we can't do it alone. Partners' engagement is very critical. In July, we announced a partnership with Sustainable Office Solutions, SOS, a sustainable asset management specialist, to launch a pioneering circularity solution on office furniture for Taikoo Place and Pacific Place tenants. This is a Hong Kong and international first program to do so. Since its launch, the program has successfully diverted 18 tons of waste from the landfill. Green Kitchen Initiative is also continuing to grow. Now we have 60 F&B tenants in the Hong Kong and the Chinese Mainland portfolios recognized with the Green Kitchen awards. We are also excited to share our new flagship platform, Green Performance Pledge, GPP. We have achieved that over 22% sign-up from our Hong Kong office tenants since its launch in August 2021. GPP is well, we.
On the GPP, we aim to raise the participation to 50% by 2025. Green financing is our preferred financing strategy that supports our transition to a low carbon sustainable business. In the first half of 2022, we secured three sustainability-linked loan facilities totaling HKD 3.5 billion. With that, we are proud to announce that we have achieved 45% of our current bonds and loan facilities coming from the green financing, very close to meeting our target of reaching 50% by 2025. We also very happy to share that 100% of the net proceeds from all our green bonds have been allocated to green projects as at September 2021.
On the people pillar, I would like to proudly share that Swire Properties has recently been recognized as Hong Kong's most attractive employer at the Randstad Hong Kong Employer Brand Awards 2022, and this is the second time that we received this recognition, having topped the list in 2020. Securing health and safety of our employees is an indispensable part of our business. We continue to prioritize health and safety in all areas of our business. In 2021, we established our zero harm commitment, which means achieving no fatalities, no injuries, and no harm to health as a result of our business activities. We developed a zero harm framework and roadmap integrating our commitment through leadership, structure, process, and culture. We also care for those who work with us in our supply chain.
As such, we developed a new 2025 and 2030 targets to cover contractor workers in our Hong Kong development projects. The targets are to reduce 50% of our five-year rolling average of accident rate by 2025, and 70% reduction by 2030. These new targets will allow us to track and also improve the health and safety performance in our construction sites. With that, I will pass it back to Tim.
Thank you, Fanny. I just want to touch on digital briefly. It's been discussed in previous briefings. Just give you a brief update on what the team have been doing. The portfolio teams and our digital teams in Chinese Mainland and in Hong Kong been working hard to roll out a series of new and innovative applications for our retail customers and for office workers. It's encouraging to see the downloads, membership registration engagement has been very positive. This will enable us to continue to improve the tenant and our customer experience and ultimately to increase sales. Having pioneered the market with Taikoo Social in 2017 in Taikoo Place, we're looking at further opportunities to improve the Taikoo Social application.
New and upgraded apps are being rolled out across the office, hotel, and residential portfolios in the first half of this year and will continue over the next couple of months, as we're committed to improving the digital experience across all our portfolios. We've also made good progress working with our new ventures colleagues and with strategic partners to source and adopt digital solutions to improve the operational and sustainability performance of our office buildings. Following on from Fanny Lung's earlier comments, we've identified innovative digital solutions to improve our construction site safety performance and realize our ambition to achieve zero harm. Finally, I'll just touch on a couple of things just to wrap up. One is on our celebrations for our 50th anniversary, and then just a final slide on the prospects.
As you have seen in the opening highlights video, 2022 is a milestone year for the company as we recognize and celebrate our 50th anniversary. Adopting the banner of ORIGINAL. ALWAYS., the team has put together a fantastic lineup of events throughout this year focused on five main areas of places, communities, people, sustainability, and the arts. Many of these programs will take place across our portfolios, also across geographies, and involve numerous collaborations, notably with institutions such as the V&A and the Palace Museum here in Hong Kong, with whom we're partnering on an exciting youth cultural leadership program. We're really looking forward to celebrating 50 years of successful placemaking, working closely with our partners and with our communities.
In terms of prospects, as I mentioned at the top of the presentation, we're gaining ground on all fronts, and we have a compelling growth strategy. In Hong Kong, despite the weak office market, our portfolio is well-placed and enjoys high occupancy levels due to the flight to quality trend and reflective of our successful placemaking strategy. On the retail front, our malls are seeing steady recovery, and we look forward to further relaxation of the COVID-19 related preventive measures over the next few months. In the Chinese Mainland, demand for retail space is steady, and we look forward to expanding our successful Taikoo Li and Taikoo Hui footprint in Tier One cities, and most specifically in the Greater Bay Area.
To conclude, in spite of the headwinds in the first half, we have been making good progress on all fronts, especially with our exciting growth plan to invest HKD 100 billion in new projects over the next 10 years in our three core markets in order to deliver sustainable dividend growth. The core business has proven to be resilient. We're well positioned for growth, and we look forward to the opening of our next project, the Zhangyuan phase I in Shanghai in October, and to the continuation of the steady recovery in the second half of the year. Thank you very much.
Thank you, Tim and Fanny, for the detailed presentation.