Good afternoon, this is Karina, Head of Corporate Communication and Sustainability at Champion REIT. Welcome to the Champion REIT 2025 annual results and analyst briefing.

Today our CEO, Ms. Christina Hau, and our Investment and Investor Relations Director, Ms.

Amy Luk, will present our 2025 annual results. After the presentation, there will be a Q&A section.

Without further ado, please, Christina.

Thank you, Karina. Hello, everyone.

[Gong hei fat choy?] .

This year, 2026, is the 20th anniversary of Champion REIT. We are the second largest REIT in Hong Kong by market cap at this moment.

Over the past two decades, we have been adhering to proactive asset management strategy on enhancing asset quality and delivering long-term value for our stakeholders. The property portfolio has grown by an acquisition of Langham Place Office and Mall, unification of ownership of Three Garden Road, and the first overseas acquisition in London.

On the sustainability, our Three Garden Road has attained the first quadruple platinum existing building in Hong Kong in 2024, and we will continue our commitment to ESG going forward. Let's look at the 2025 result highlights.

The overall market sentiment in Hong Kong has improved, supported by stronger stock market, tourism rebound, and interest rate drop, which restore business confidence. The robust capital market is driving solid office demand.

Site inspection for Three Garden Road increased by 61% in second half of the year compared with last year. On retail side, our proactive tenant management is paying off.

The sales of our new tenants across different categories in 2025 record a remarkable increase of 80% compared with our previous operators. IP-driven pop-up stores tied to major marketing campaigns deliver triple-digit sales growth, that's it, generating 8-digit sales and 7-digit extra income.

On financial management, we continue to adopt a prudent approach and successfully secured a HK$1.5 billion of banking facilities for refinancing the bank loan due in 2026 ahead of maturity. Lower average HIBOR in 2025 has resulted in meaningful interest savings.

I now pass to Amy to walk through the overall financials.

Thank you, Christina. Let's look at the 2025 full-year results highlights.

While we saw signs of market recovery and stabilization, the overall operating environment remained challenging given abundant office supply in the market and also change in consumer behavior. Under this market backdrop, occupancy of our portfolio remained stable and resilient, and lower interest expense partially offset the impact of negative rental reversion.

For the full year of 2025, total rental income dropped by 9% year on year to HK$1,988 million, and net property income dropped by 11% to HK$1,613 million. Distributable income dropped by 10% to HK$859 million.

Then distribution per unit dropped by 11% to HK$0.1263. Looking at the debt profile, our gearing ratio maintained at a healthy level of 25.4% at the end of 2025.

For the debt refinancing completed in last year, we brought in new lenders into a syndicated loan, and we also secured a new bilateral facility with an existing lender. For debt maturing this year, with outstanding balance of 2,285 million as at the 31st December 2025, we took a proactive approach and secured 1.5 billion of bank loan facilities for refinancing ahead of maturity.

We are now in active discussion with lenders for the remaining portion and got positive feedback from our lenders. The lower average HIBOR in 2025 brought 60 basis points drop in average effective interest rate to 3.8% comparing with 4.4% in 2024.

This brought in meaningful interest savings, driving down cash finance cost by 13.5% to HK$557 million. We also obtained inaugural A rating from Japan rating agencies, JCR and R&I, last year, affirming our stable capital structure.

Turning into valuation, our portfolio value stood at HK$56.2 billion with unchanged cap rate at the end of last year. The per square foot valuation of Three Garden Road was less than 20,000 per square foot, which is undemanding comparing with the notable transactions of Central office.

I'll now hand over to Christina to walk through the property portfolios.

Thanks, Amy. Let's begin with Three Garden Road.

The improving financial market sentiment has driven up demand for Central office. We observe increasing leasing enquiries from third quarter last year, while second half site inspection increased by 61% year on year.

We have secured new tenants from the asset management and family offices sectors last year. Currently, 67% of Three Garden Road tenant is banking and asset management related.

We adopt proactive approach early in lease renews, and over 75% of leasing expiring in 2026 has been successfully renewed, which enhance income visibility and occupancy maintained at stable level at 81.6% in the market with abundant supply. The lease maturity profile is now well spread after all these actions in the next years, after renewal with our anchor tenants last year.

At Three Garden Road, we are doing more than just providing office space; we are building a vibrant community and ecosystem. Our year-round calendar of festive and wellness event attracted over 6,700 person-times.

For Langham Place Office, the property remains a preferred location for healthcare, beauty, and wellness operators, while lifestyle and wellness tenants accounted for 68% of area as at 31st December 2025. Last year, we have introduced over 10 new wellness tenants as well as other sales services tenants to enhance tenant diversity.

Occupancy remains stable at 86.9% as at 31st December 2025. We continue to solidify our position as a premier wellness hub across six dimensions, namely physical, emotional, intellectual, spiritual, social, and financial wellbeing.

Our 6D Wellness channel have accumulated 4.6 million views since launch, and the social wellness hall at 49th floor of the property held a series of wellness events, such as social, sound healing, therapy dog yoga, dance workshops, which were well received by participants. We also partnered with Hong Kong Retail Management Association, HKRMA, to introduce the first Quality Service Charter in Hong Kong for beauty and wellness operators, with over 90% related tenants participate.

This set a new benchmark for service excellence across beauty, health, medical, and lifestyle categories. For Langham Place Mall, we continue to reinforce the positioning of the mall as a retail trendsetter with agile leasing and marketing strategies as the mall celebrated its 20th anniversary last year.

Our proactive tenant management captured market trends and brought in up-and-coming new tenants, including popular IP brands, which resulted in double-digit sales growth in lifestyle segment. Occupancy of the mall maintained at high level of 99.3%, while rental income was affected by replacement of anchor tenant occupying 13.8 percentage by lettable area, also some softening in tenant sales in particular categories.

We adopt stay local, trend global strategy by integrating local cultural elements with global retail trends. Last year, we introduced over 30 new tenants, including first in Hong Kong Chiikawa ramen BUTA and various tenants across different segments as shown in the slide.

The new tenants generate sales of 80% higher than the previous tenants, demonstrating the positive result of tenant mix refinement. Throughout the year, Langham Place Mall deliver a strong and diverse event calendar.

We begin with collaboration featuring local artists and emerging brands, followed by a series of fashion-driven activities designed to reinforce the mall's positioning as the leading retail trendsetter. We also deepened the engagement through partnership with global IPs, including Squid Game, Star Wars, Baby Oyster, Chiikawa, Kuromi, and finished the year with the debut [Nooteboom?]

in Hong Kong in a Merry Potatomas event. IP collaboration and emotion-driven experiences are popular across different generations.

To capture this trend, we partner with a range of global IPs to deliver differentiated and engaging experience in Langham Place Mall. This brought in pop-up store sales of major marketing events, recording triple-digit growth last year.

Our regular and festive season promotion events also continue to strengthen the engagement and loyalty club members. During the year, our member base grew by 27% year on year, and member spending increased by 11% year on year.

Now I will pass to Amy to talk about the sustainability.

Thank you, Christina. On sustainability, we continue to work closely with our tenants and business partners to drive measurable impact across our portfolio.

Leveraging on artificial intelligence, we optimized the utilization of chiller plant at Three Garden Road, which resulted in 6.1% reduction in energy usage. Last year, our ESG Gala with the theme "Innovation, Inspiration, and Integration" gathered over 1,000 industry leaders and changemakers.

Also, our tenant engagement program, Eco-Champion Pledge, delivered positive results, with 80% of participating tenants formalized their energy targets and action plans. On social aspect, we continue to partner with community organizations to deliver meaningful social impact.

Among these efforts on social and community, our ethical consumption pop-up store at Langham Place Mall, which promoted conscious consumption, engaged nearly 20,000 visitors. While we continue our support for the government Strive and Rise Programme for the third consecutive year, our Christmas celebration event, which connected the community in our Three Garden Road, generated 9.7 in social value for each Hong Kong dollar $1 sponsorship.

Our sustainability efforts continue to gain prestigious recognition. In 2025, we were honored to receive the GRESB 5-star rating for the third consecutive year, and we are also pleased to be awarded AA+ in the Hong Kong Sustainability Benchmark Index.

These achievements reaffirm our commitment to deliver high standards in sustainability. I'll now pass back the time to Christina to talk about the outlook.

Thanks, Amy. Looking ahead, we'll continue to adopt proactive strategy to optimize performance and across our portfolio.

For office, we aim to solidify Three Garden Road's position as a top wealth management destination. Currently, we will diversify tenancy at Langham Place Office to build on its wellness hub foundation, ensuring resilience and amid ongoing supply pressure in the office market.

For retail, the average daily inbound of mainland and overseas tourists increased by 11% and 16% respectively in 2025. Despite the outbound Hong Kong residents remain, the growth in tourist arrival should provide support to the Hong Kong retail market.

We will reinforce our stay local, trend global strategy for Langham Place Mall, and continue to capture evolving customer trends to refine our tenant mix. At the same time, we'll enhance our retailtainment offerings to mitigate rising headwinds from online retail.

For liability management, we will explore opportunities to broaden our lender base and maintain a balanced portion of fixed-rate debt. Finally, we will further strengthen our role as a super-connector and super value-adder to create value through deeper collaboration with tenant, partners, and stakeholders across our ecosystem.

This is the end of our presentation. Thank you.

Let's come with the Q&A section. Please feel free to raise your hands and state your name and company.

Thanks, Christina and Amy. This is Cindy from Citi.

Three questions from me, please. The first one is on your 20th anniversary.

I'm wondering if you would consider returning to 100% distribution to celebrate that? Second question is on the office enquiries.

Obviously, your 60% increase in inspection is very encouraging. I'm just wondering if that would translate into, say, better expectation on occupancy and rents leading to 2026?

What's the current, say, spot rent, and what's your expectation for 2026? The third question is actually related to the budget speech today, that government mentioned to facilitate REIT restructuring or privatization.

How's your reading into this, and do you expect Champion REIT could benefit from such in any aspect? Thank you.

Thank you, Cindy. Back to your first question about the 100% distribution.

Currently, we maintain the 90%, I think, is quite prudent and suitable because we retain some of the surplus to upgrade our premises by putting up capex work to improve the quality, the hardware of our building. That, of course, is subject to the board's decision.

We did think at this level is appropriate. For the office inspection, yes, it is encouraging.

The inspection growed by 61%, and it in fact did translated into new leases in 2025, in fact. We hope to see the momentums continue.

With the momentum of the stock market and financial market and financial performance, wealth management in Hong Kong, we do see the increase in demand. Then it will induce expansion need, and also new office set-up needs in Hong Kong that require the prime Central location as their office premises.

The current spot rent for Three Garden Road is mid-60s to 70. Yeah.

Regarding the privatization, it's also at this moment we have not touch upon on this issue yet. Yeah.

Thank you.

Thank you, management.

This is Raymond Liu from HSBC.

I've

got three questions as well. The first question is about the Three Garden Road.

Can management elaborate the change in the passing rent of the project on the office side over the past 12 months? Should we expect similar changes to take place in 2026?

This is first question. The second question is about the rental reversion, just wondering if there are more idea on this one, because management commented over seven 75% of 2026 expires were concluded.

Can management share with us a bit more color about the rental level that you signed year to date compared to the latest passing rent? The last question is about Langham Place Mall.

Can management share with us the tenant sales performance year to date? Seems that the footfall has been very good based on our on-the-ground observations.

Thank you.

The change in passing rent in 2025 in fact is dragged down by the renewal of an anchor tenant, okay, which is around mid-teens of our occupied area. The rent reversion, we do see the gap has been narrowed.

We foresee that the rent reversion gap will be continue to remain in a narrower situation. The sales of the Langham Place Mall, when we look into the Hong Kong retail sales, yet in fact, the last year's 1% growth of the total retail sales was mainly driven by the double-digit increase in online sales.

That imposed some impact on the offline sales, which in fact has decreased by 0.1%. Within that, in fact, the electronics and also the watches, jewelry, especially the gold price had risen a lot in 2025, right?

That the gold rush did impose a huge increase in the sales of this jewelry shops. However, in Langham Place, we don't have this jewelry shops in our portfolio.

We are not able to capture that same amount of sales increase in our Langham Place Mall. We have 5% decrease in sales, mainly driven by the high base in 20 high base back in 2024 on the beauty segment.

Thank you, management. This is Mark Leung.

I got about two questions, it's regarding on the office. We saw that the vacant space is roughly less than 9, 10 10% for Three Garden Road and around maybe 13% for Langham Office.

Could you elaborate whether this fourth vacant space are interconnected? What I mean is it is a 12, 13, 14, or it's really spread around?

I think that's the first question. Then the second question is if it is more like a connected big space, have we seen any interest from an anchor tenant?

Do you see possibility for anchor tenant to take any large space from these vacant two buildings in the next 12 months? Thank you.

I think for our Three Garden Road, some are whole floor, but they are not connected, okay? For Langham Place, also is the same situation.

Some are scattered. We have some whole floors vacated by some anchor tenants, okay?

Do we foresee their needs? Yes, we do.

For example, some tenants that require larger in area, new tenants, we have been actively in discussion. Still not yet anything we can disclose now, yeah.

In fact, last year we got existing tenant at Three Garden Road taking more space from the financial sector.

Oh yeah. They expanded a whole floor to set up their private bank sections.

Hi management. This is Percy from DBS.

Thank you for taking my question. I have around three questions respectively.

Is regarding your strategy at Three Garden Road. Understand that enquiries has improved significantly recently.

Just wondering what is your leasing strategy going forward. Would you continue to be more flexible in terms of the rents in order to secure higher occupancy?

Which would you prioritize more? Also, what is the expiring rent for 2026?

Secondly, in terms of the Langham Place Office for 2026, could you give us more color regarding the expiry profile, and what's the current renewal process for that chunk? Thirdly, I got a question regarding the Langham Place Mall.

I understand that our rental income actually dropped quite a bit, mainly due to the major cinema operator lease renewal, as well as, I guess, lower turnover rent. However, when we take a look in terms of the passing rent per square foot, it's actually higher compared to December 2024.

Just want to check what's the discrepancy behind. Thank you.

For Three Garden Road, I think to maintain the higher occupancy is also our top priority, because we want to mitigate the expenses of the net property expenses. That means the building management fees, et cetera.

Our priority remains the same. We provided flexible leasing terms, and also we tailor-made the solutions.

Also, last year we have build many fitted units that were quickly leasing out to cope with the market needs and to cope with those financial-related, family-office-related tenants' demand. We'll continue to do that.

Also, we will look into our hardware provisions as well. For us, we have kickstarted the toilet renovation in 2022 and will complete it in 2027.

We're undergoing a total review and study of our hardware in Three Garden Road whether there is room for upgrading and improvement to upkeep our competitiveness. That's our strategy.

Expiring rent in 2026 for Three Garden Road is around 80s, high 80s. Also for Langham Place Office, the early renewal situation is not happening in Langham Place Office, because they are operators.

They are really using the premises for doing business. They are like retailers.

They would wait and see how their business is going, the macro. They are very sensitive to the macroeconomics and how their business is doing.

They tend to confirm the renewal closer to the renew date or the lease expiry date. That's the usual pattern we saw in Langham Place Office.

Actually, the passing rent on the retail side, the passing rent as at 31st December 2025 is higher because of the base rent and the turnover rent at that date, in fact, is doing better than 2024. That's the reason.

If there's no further questions, we could conclude the briefing section today. Thank you for joining us.

Thank you.

Thank you.