8) In China, Chengdu IFS is located in the prime location and transportation hub of Chengdu with 2.2msf. The initial rental yield stood at 6-7%. Chengdu IFS is one of the biggest shopping malls in Central/Western China. Average visitor flow to the mall: (1) 45,000 per weekday; (2) 65,000 per weekend and (3) 85,000 to 87,000 per special holiday. For the office portion of Chengdu IFC, around 2/3 of the total office space has been committed or is under final discussion.
9) Management reaffirmed that they classified Greentown as long-term investment. Management sees the transaction between Sunac and Greentown to have positive impacts on Greentown based on Sunac’s good experience in property sales strategy. Meanwhile, Wharf will take the lead in the risk management and financial management of Greentown.
10) The contracted sales target in China for 2014 is unchanged at RMB23bn. In 7M14, contracted sales reached RMB10.5bn. Management remained cautious about the China residential market and will continue to use a flexible pricing strategy. The sell-through rate in 1H14 was around 87%.
11) Management has reservations on recent policy easing in China, adding that more time is needed to have the real impacts reflected.
12) For China development properties, EBIT margin was 16% in 1H14 versus 17% in 1H13. Management expected that the EBIT margin will remain at a similar level in 2H14.
13) Wharf has 45 projects in 14 cities in China as of 1H14, with a total land bank of 11mn sqm. In its landbank, 80% are development properties and 20% are investment properties. Management expected that the current landbank level will be enough for the company’s development for 4-5 years.
14) Management expected that the Chongqing IFS and Changsha IFS will be commenced in 2016 and 2017, respectively. Wharf aims to sell the office portion while maintaining the retail and hotel portion as investment properties.