Harbour
City

Wharf ’s business began in a wharf and godown in Tsim Sha Tsui in 1886.
Urbanisation provided the defining opportunity for Wharf. The redevelopment of
Harbour City turned Canton Road from a dilapidated street nobody dared to visit after sunset to the most high traffic focal point of TST today.

T H E W H A R F ( H O L D I N G S ) L I M I T E D A n n u a l R e p o r t 2 014

15

BUSINESS ASSETS

169,074
9,550
HK$ Million

GROSS REVENUE

HK$ Million

OPERATING PROFIT

7,474
HK$ Million

16

T H E W H A R F ( H O L D I N G S ) L I M I T E D A n n u a l R e p o r t 2 014

An international retail landmark, Harbour City takes a 7.1% of Hong Kong retail sales and sets new records in sales and retail revenue every year.
17
T H E W H A R F ( H O L D I N G S ) L I M I T E D A n n u a l R e p o r t 2 014

Business Review

HARBOUR CITY
BUSINESS ASSETS

2014
HK$ Million

2013
HK$ Million

Change

Properties (at valuation)
Hotel and club* (at valuation)
Other assets

159,700
8,420
954

137,770
8,340
1,067

+16%
+1%
-11%

Total business assets

169,074

147,177

+15%

As at 31 December

*

Hotel and Club are stated at cost less depreciation in the financial statements.

GROSS REVENUE

2014
HK$ Million

2013
HK$ Million

Change

Retail
Office
Serviced Apartments
Hotel and Club

5,674
2,121
301
1,454

4,909
1,885
305
1,372

+16%
+13%
-1%
+6%

Total gross revenue

9,550

8,471

+13%

OPERATING PROFIT

2014
HK$ Million

2013
HK$ Million

Change

Retail
Office
Serviced Apartments
Hotel and Club

5,066
1,793
195
420

4,384
1,594
211
393

+16%
+12%
-8%
+7%

Total operating profit

7,474

6,582

+14%

Harbour City was valued at HK$168 billion at the end of 2014, representing an increase of
15% over 2013 and 39% of the Group’s business assets. Revenue increased by 13% to HK$9,550 million and operating profit by 14% to HK$7,474 million. Retail

In 2014, Hong Kong retail market saw a 0.2 percent year-on-year drop in sales, primarily d u e to t h e M ainlan d ’s a nt i - e x t r avag a n c e campaign that dented luxur y spending and competition from Europe, Korea and Japan as their currencies continued to weaken relative to
Hong Kong Dollar and Renminbi. The “Occupy
M o v e m e n t ” to w a r d s t h e e n d of t h e y e a r inflicted further damage.
Harbour City again outperformed the market in a challenging retail environment. Total sales grew by 3.4% to set another record of HK$35 billion. Market share improved further to 7.1%, m a n i fe s t i n g i t s p ro d u c t i v i t y a n d l e a d i n g p o s i t i o n i n t h e m a r ke t p l a c e . R e ve n u e to
Harbour City from retail increased by 16% to
HK$5,674 million.

PROPERTY VALUE
14

168,120

(HK$ Million)

13

146,110

12
11
10

133,330
100,490
86,442

GROSS REVENUE
14

(HK$ Million)

9,550

13

8,471

12

7,508

11
10

6,635
5,812

Business Review

HARBOUR CITY
Management, size and location are the key success factors c ontr ibu ting to the ou tp e r for manc e in a competitive retail landscape. With two million square feet of mall space, Harbour City is among the world’s leading shopping destinations. It is the core of the
“Greater Harbour City” cluster with six million square feet spanning vibrant shopping, entertainment, dining and lifestyle in Tsimshatsui’s most dynamic retail area.
Its presence strengthens the prominence of the region.
The coveted Harbour City and its 530-metre contiguous retail frontage along Canton Road is well positioned as a global retail showcase for celebrated brands and has become the most sought-after location for the best-ofclass retailers. Demand from renowned fashion brands for expansion and flagship stores at Harbour City remains intense. New additions (Bvlgari and Valentino) and expansion (Prada) were committed on Canton
Road. Other committed expansions included Celine,
Jimmy Choo, Moncler and Roger Vivier.
New openings or commitments fur ther refined the diverse tenant mix. These included top performers across various trade categories such as fine jeweler
Chaumet and Van Cleef & Arpels, as well as Italian fashion brand Armani Collezioni. Michelin star chef’s
Italian restaurant La Locanda by Giancarlo Perbellini,
French fine dining Dalloyau and Wedgewood’s Café opened their debut stores in Hong Kong at Harbour
City. Jamie’s Italian is also set to open its Kowloon debut at Harbour City. Following the opening of Uniqlo’s largest flagship store in Kowloon in April, Page One’s
37,000-square-foot full concept store and Versace’s three -level full concept store were opened in late
September and October respectively.
Ocean Terminal’s (“OT”) value-accretive renovation is progressing to plan. Upon completion of the new escalators and a new atrium at KidX as well as creation of three new shops taken up by Hublot, IWC
Schaffhausen and Montblanc in Golden Mile, new retail and F&B attractions on the third floor will be created by mid-2015. Designed by Foster & Partners, the extension building plan for OT is approved. New culinary options with breathtaking panoramic views of the Hong Kong harbour and skyline will be offered at the extension building. A series of trade-mix enhancements as well as the renovation and extension of OT will further unleash retail value, add growth impetus and bring surprises and excitement to the customers.

20

T H E W H A R F ( H O L D I N G S ) L I M I T E D A n n u a l R e p o r t 2 014

T H E W H A R F ( H O L D I N G S ) L I M I T E D A n n u a l R e p o r t 2 014

21

Business Review

HARBOUR CITY
RETAIL TENANT MIX (by Rental, Area and Sales)
% by Rental

30.0
12.1
19.7
7.7
14.7
5.2
2.0
2.2
6.4

25.0
26.4
12.1
21.7
3.1
2.3
7.0
1.5
0.9

100.0

Total

% by Sales

34.4
23.7
11.3
18.7
3.3
2.8
2.2
1.9
1.7

Fashion
Leather Goods - Shoes Bags & Related Trade
Department Store, Confectionery Products
Jewellery, Beauty and Accessories
Restaurant, Fast Food, F&B, Entertainment
Children's Wear, Toy & Related Trades
Electrical & Audio-visual Equipment
Sports Wear
Others

% by Area

100.0

100.0

PORTFOLIO INFORMATION
Gross Floor
Area
Revenue
(sq ft) (HK$ Million)
Retail
Office
Serviced Apartments
Hotel and Club

2,049,000
4,263,000
670,000
1,368,000

5,674
2,121
301
1,454

Average
Year-end
Occupancy
Valuation
(%) (HK$ Million)
98
96
74
89

94,602
55,108
9,990
8,420

Office

Demand at Harbour City was underpinned by business expansion and corporate upgrades. New lettings were largely supported by small to medium-sized requirements. Solid positive rental reversion increased revenue by 13% to HK$2,121 million. Rental rates for new commitments remained stable while occupancy reached
98% at year-end.
Lease renewal retention rate held up at 83% during the year, with favourable rental increments. These included
AIA, All Nippon Airways, Mizuho Corporate Bank and West Kowloon Cultural District Authority.
Thanks to its favourable location and transportation, premium quality management, comprehensive ancillary features including the mega mall, three Marco Polo hotels, serviced apartments, a fitness centre and a private
Pacific Club, Harbour City is a preferred office location for multinationals, as well as Mainland and local enterprises. These advantageous elements place Harbour City in an unrivalled position relative to “pure offices”. Serviced Apartments

Revenue amounted to HK$301 million, with occupancy (excluding 61 apartments closed for renovation) climbing to 87% at year-end. Upon completion of the substantial renovation, the refreshed apartments will be better-positioned to cater to customers’ unique and sophisticated demands and enable the most discerning customers to enjoy an unmatched, tranquil and more blissful lifestyle.

22

T H E W H A R F ( H O L D I N G S ) L I M I T E D A n n u a l R e p o r t 2 014

T H E W H A R F ( H O L D I N G S ) L I M I T E D A n n u a l R e p o r t 2 014

23