Good afternoon, ladies and gentlemen. This is Sylvia, Head of Corporate Communications and Sustainability at Champion REIT. Welcome to our 2025 Interim Results Analyst Briefing. Today, our CEO, Ms. Christina Hau, and our Investment and Investor Relations Director, Ms. Amy Luk, will present our 2025 Interim Results. After the presentation, we will have a Q&A session. Now, may I pass the time to Christina, please?
Thank you, Sylvia. Good afternoon, everyone. Great to have you here today. Let's look at the highlights first. 2025 is a year of major celebration of our portfolio. Langham Place Mall is marking its 20th anniversary. The mall has been an icon in Bangkok since opening, and we are reinforcing its status as a cultural and retail trend setter. We have a series of talk- of- the-t own's events to celebrate this important milestone for Langham Place. At the same time, our acclaimed Musical [crosstalk ] Concert series is celebrating its 10th year, continuing our commitment to nurturing youth artistic talent. These initiatives are central to our role as a super connector and super value adder. Our strategies go beyond only managing our asset well, but we are also actively fostering a vibrant ecosystem, creating powerful synergy among other stakeholders.
As you can see in the slide, we have organized dynamic events to create value for our stakeholders. For example, we're engaging our office tenants with festive celebrations, driving talk- of- the-t own moments, and promotional campaigns to drive food for, booth sales, and create unique experiences at the mall. Also, the co-working space at Langham Place Office launched our inaugural social wellness hall at the 49th floor, to further reinforce the property's position as a 6D Wellness Hub. Now, I'll pass to Amy.
Thank you, Christina. Let's look at the first half interim result highlight. While the macro environment and also global sentiment remain challenging, the local market sentiment has improved with the active stock market, lower HIBOR, and mega events. However, negative rental reversion continues to impact our results. For the first half, total rental income dropped 7.6% year-on-year to HKD 1,029 million.
Net property income dropped 10% to HKD 859 million. Distributable income is a 12.6% decline to HKD 476 million, and the distribution per unit is HKD 0.0701. The fall in HIBOR brought in interest rate savings towards the end of the second quarter, where cash financing costs dropped 6% to HKD 291 million, comparing with last year. Looking at the debt profile, our gearing ratio maintained at a healthy level of 24.5%. We have now successfully completed the refinancing of all our 2025 debt, bringing new lenders into syndicated loans and also secure new banking facilities. The undrawn committed facilities amounted to HKD 2.9 billion as at 30th June 2025. The lower average HIBOR has brought down average effective interest rate to 4% versus 4.2% in the first half of 2024 and 4.4% for the full year of 2024.
As shown in the bottom right-hand side, you can see the HIBOR movement in this year. Since half of our debt is on a floating rate basis, we are right now enjoying the decline in HIBOR compared with last year. Turning to valuations, our portfolio value stood at HKD 58.1 billion at the end of June, reflecting market-wide rental decline. The per square foot valuation is undemanding for Three Garden Road, if you compare the recent notable transaction of strata title Central Office property. I'll now hand over to Christina to walk us through the property performance review.
Thanks, Amy. Let's go through the property performance for Three Garden Road. While the Central Office market continued to face a bundled supply situation, the market sentiment was boosted by the robust IPO and stock market this year. Three Garden Road occupancy remains stable at 80.7% as of 30th June 2025. We received increasing leasing inquiries from finance-related firms and recruited several small-sized tenants, including asset management firms and family offices, to our Three Garden Road. One of our banking tenants also expanded their wealth management in the property.
We continue our leasing renewal efforts, with all the 2025 lease expiry being handled with a high retention rate, including several anchor tenants. Also, over 70% of 2026 lease expiry has been renewed. We continue to cultivate a truly vibrant community with our tenants, whether through festive celebrations with our signature Musical [crosstalk ] concerts . We believe these initiatives not only add value to the properties, but also go beyond traditional landlord-tenant relationships. Indeed, they foster lasting partnerships. For Langham Place Office, the property remains a preferred location for healthcare, beauty, and wellness operators. Lifestyle and wellness tenants are occupying 68% of the area as of 30th June 2025.
Occupancy remains stable at 86.9% as at 30th June 2025. While we are seeing some medical tenants expanding their operations in the property, we have also successfully secured service industry tenants, including a VIP lounge of a travel agency, to enhance the tenant diversity. This year, we solidified Langham Place Office position as a 6D Wellness Hub, encompassing physical, emotional, intellectual, spiritual, social, and financial wellness. In February, we launched a YouTube channel featuring weekly wellness tips, now reaching 1.7 million views across Hong Kong and China, a new social wellness hall debuted in our expanded coworking space, attracting over 140 guests in its ESG gala and launch in July this year. Additionally, we introduced a 6D Wellness Club, offering wellness experience packages worth over HKD 8.3 million to tenants and customers.
For Langham Place Mall, we continue to adopt agile leasing and marketing strategies to adapt to changing customer behavior. Last year, we introduced POP MART in the mall, which generated double-digit asset sales growth in the lifestyle segment during the first half of 2023. Despite an increase in overall net local outbound travel, the mall's footfall remained stable in the first half. Our vibrant summer campaigns recently drove a new single-day footfall record in August this year. The mall's occupancy remained at a high level, with committed occupancy currently at 100%. We maintained our active tenant management strategy with a stay local trend global vision. To date, we have recruited 23 brands, including several first-in-Hong Kong stores at Langham Place Mall. Among these is Chiikawa Ramen Buta, which opened last week as the first global store outside Japan and has become an instant hotspot.
Additionally, our long-term tenant MUJI is expanding its footprint by adding MUJI to GO and MUJI CYCLE sections. This brand is also offering exclusive products for our shoppers. As mentioned earlier, Langham Place Mall is celebrating its 20th anniversary this year with a series of celebrations and special events, reinforcing its position as a trend setter and dynamic social hub. The summer features exclusive activities, including Hong Kong's first Disney Baby Oyster Mart pop-up, [crosstalk ] new song debut, and a QB and Squid Game collaboration. Our ongoing summer lucky draw campaign is driving incremental sales, with more footfall increasing since June and reaching a record high. We have also revamped the loyalty program to strengthen customer engagement. The new program also offers compelling benefits , like birthday surprises, exclusive privileges, and a rich reward redemption program. Now I'll hand over to Amy to talk about sustainability.
Thank you, Christina. On sustainability, we have been proactively engaging with our tenants and business partners to make significant steps in our ESG initiatives. Our flagship ESG gala this year, with a theme of innovation, inspiration, and integration, brought together over a thousand tenants and business partners, demonstrating our commitment to cross-sector collaboration. Our Eco Champion Pledge program achieved impressive results, with 80% of participating tenants formalizing energy targets and all recycling at least three types of waste. Additionally, we organized engaging capacity-building events for tenants, with 85% rating them highly informative. At property level, we have been enhancing environmental performance of our properties through smart building technologies. At Three Garden Road, our innovative AI-driven [crosstalk] optimization system has delivered 6.1% energy savings annually.
The property maintains its status as Hong Kong's first existing building with quotable BO Platinum Certifications, while all our properties in Hong Kong have achieved BIM PLUS certification. We are also dedicated to collaborating with community partners to drive positive social impact. We have supported the government's Strive and Rise programme for three consecutive years, and held an exclusive movie day for student mentees at our Langham Place Mall recently. We organized a sports day featuring AI body scans and smoothie bites to promote a holistic approach to workplace wellness among tenants.
This year, we introduced a brand new Langham Place 6D Wellness Hub concept, as mentioned by Christina earlier. Our sustainability effort has been acknowledged through prestigious awards, notably the GRESB Five Star Rating and Global Listed Sector Leader Award. These recognitions reinforce our commitment to delivering long-term sustainable value. Moving forward, we will continue to foster cross-sector partnerships, as we believe the true sustainability success lies in our collective efforts with tenants and partners. Now I will pass to Christina to talk about the outlook.
For the second half of 2025, the macro environment is expected to remain uncertain, and we will remain agile in our strategy under the competitive market landscape. For portfolio management, we will continue to implement flexible leasing strategies to maximize tenant retention and to recruit new tenants. We will further strengthen Langham Place Office unit position as a premier 6D Wellness Hub. There will be more celebration events for the 20th anniversary of Langham Place Mall together with festive events. On liability management, we're positioned to benefit from the lower average HIBOR environment, with over half of our debt in a floating rate basis.
We are already in preliminary discussions with lenders to refinance our outstanding debt due in 2026. We are also actively exploring opportunities to broaden and diversify our funding sources. We focus on our ecosystem enhancement, leveraging on our available resources, including the newly added social wellness hall, to bring value-added services to all our stakeholders. We'll also deepen our collaboration with tenants and strategic partners across our entire portfolio to enhance our ecosystem. That's the end of our presentation. Thank you.
Here comes the Q&A section. If you have any questions, please raise your hands and state your name and company name before asking your questions.
Thank you. This is Cindy from Citi. Three questions from me. First is on Three Garden Road office. Wondering the tenant retention rate in the first half of this year, and how is our strategy towards the around 20% vacancy in the second half? Would you consider say, cutting rent more aggressively or subdividing some of the floors or maybe expanding more flexible offers? This is the first question. Second question on Langham Mall. It's a very good number that we have, passing rent actually increased versus the December last year. Just wondering, what's the backdrop behind that increase and should we expect the momentum to carry forward into the second half?
Further to that is that, I see base rental income didn't actually increase in the first half of this year, so maybe a delayed impact of passing rent. Are we looking for a better Langham Mall rental income in the second half? The third question is actually on our property operating cost, which went higher in the first half. Just looking for, let's say, what's your cost control measures in the second half and any guidance on margin? Thank you.
Thank you. To answer the first question on the tenant retention rate, in fact, I have reported that up to this moment, we have already completed all the lease renewals due for 2025, and the retention rate is very high, so including many sizable anchor tenants renewals as well. Regarding how to maximize our occupancy, we are in active dialogue with agents, and the number of site visits has been increased. I think the market has responded quite actively due to the active financial markets. We'll keep agile and maintain our flexibility in the rental terms discussion to recruit new tenants. As well as the retail portion, you said there is an increase in the rents as of June 30, as compared with December 31, 2025. It was a snapshot at that month. It's due to the better-performed sales and better turnover.
If you take the snapshot of June 30th, 2024 versus June 30th, 2025, we're still facing lower spot rents at that month, if comparing on a year-on-year basis. In terms of the property expenses, in fact, the increase in expenses is due to an increase in agency fees. That was induced by the leasing transactions, a large-sized renewal, and recruiting new tenants. Thank you.
Thank you, management. This is Mark Leung from UBS. M aybe first of all, a few housekeeping questions. What's the spot range for Three Garden Road right now, also for the Langham Office and also the residents' trend as well? Secondly will be more on the retail. For Langham Mall, what tenant sales are we reporting for the first half occupancy cost ratio? Also, I think this afternoon, we reported there's a supermarket that will be closed in Langham Mall. What kind of plan or what kind of tenants would we like to introduce to take up that space? Thank you.
Thank you. The spot rent at Three Garden Road is about mid-60s to high-70s. The range is a bit huge. At Langham Place, it's still mid, low- 40s, I would say. On rental, I would say the vacancy of the Hong Kong office has not been stabilized yet. We do see some pressures on the rental levels due to the supply. On the supermarket, in fact, we have signed a lease agreement with an F&B operator to replace the Marks & Spencer. This is one of our initiatives to actively manage our portfolio to increase our rental income and the retail performance of the mall.
If no other questions, we'll conclude our analyst briefing today. Thank you for coming.
Thank you.
Thank you.