Sun Hung Kai Properties Limited (16) Earnings Call Transcript & Summary

Good afternoon, and welcome, everyone. Before we begin, I would like to extend my warmest wishes to wish everyone a happy year of Horse [Foreign Language] Now let's start with the group's financial review. Please note that all figures are in Hong Kong dollars unless stated otherwise. For the 6 months ended December 2025, the group's underlying profit was $12.2 billion, representing a year-on-year increase of 16.7%. This growth was mainly driven by higher profits from sales of trading and investment properties, together with lower finance costs. The group's leasing and other recurring income remained resilient during the period. After factoring in that effect of realized fair value gains from the sale of investment properties and a net revaluation loss on investment properties. The reported profit came in at $10.2 billion, an increase of 36.2% year-on-year. The underlying earnings per share was $4.21, while reported earnings per share was $3.54. Turning to dividend. The Board has declared an interim dividend of $0.98 per share, an increase of 3.2% from $0.95 last year. Moving on to the profit breakdown by segment. In Property Development, the group recorded a profit of about $4.9 billion, representing a substantial increase of 94.9%. This was primarily driven by higher profit recognition from our projects on the Mainland. Turning to Property Rental. The group's net rental income remained broadly stable at around $9 billion. As a slight 1.2% decline in Hong Kong was largely offset by a 1% increase from the Mainland portfolio. Hotel business recorded an operating profit of $428 million, an increase from $377 million reported in the same period last year. Profit from other business came in at about $2.3 billion, reflecting an 11.7% year-on-year decrease. Taken together, this brings the group total operating profit for the first half of fiscal year 2026 to $16.5 billion, representing a 14.3% increase year-on-year. Turning to our financial position. Net debt stood at $83.6 billion as at the end of December 2025 with the gearing ratio improving to 13.5% from 15.1% in June last year. Interest cover for the period came in at 8.7x compared with 5x a year ago. As always, the group upholds prudent financial management. The net debt has been reduced further since its peak in December 2023. Net finance cost for the period decreased by 37% year-on-year, driven by lower debt and average cost of borrowing. The group is in a strong financial position with sufficient resources to seize land opportunities in Hong Kong. We will also maintain flexibility in a fast-changing operating environment. Details on the group debt mix are outlined in the table here for your reference. Our debt maturity profile was also well balanced. The group's long-term financial strength is driven by 4 key pillars: First, a sizable and stable recurring income stream; second, growth from new completions; third, leverage our reputable brand to drive a premium sales strategy; and fourth, ongoing portfolio reviews to enhance returns and improve asset turnovers. Now let's turn to our land bank in Hong Kong. As of the end of December last year, the group's total land bank in Hong Kong was about 57.3 million square feet of attributable GFA. A detailed breakdown of our completed properties and those under development is shown in the pie charts here on this slide. Turning to land bank replenishment. The group continued to replenish our [ whole ] land bank through various channels at reasonable costs to support our future growth. In this slide, we highlight the 3 sites we acquired through various means including tender, lease modification and land exchange. Now let's turn to the Property Development business in Hong Kong. During the period, the group recognized property sales of $26.5 billion in Hong Kong, representing a 65% increase year-on-year. Development profit came in at around $2 billion. Profit margin was 8% due to the booking of Cullinan Sky Phase 1. We expect the booked sales margin to recover later. Moreover, if we include around $1.8 billion of underlying profit generated from the sale of Dynasty Court and Shouson Peak, the overall profit margin would have been 13%. Contributed sales not yet recognized totaled $22.2 billion, of which around $10.8 billion is expected to be recognized in the second half of this financial year. Turning now to Hong Kong residential. Driven by stronger demand from end user and investors, Hong Kong primary residential market saw higher transaction volumes and a modest price recovery. The group achieved the contracted sales of about $17.4 billion in Hong Kong during the period. Since January 2026, strong sales from Sierra C Phase 2 contributed an extra $9 billion. Major contributors to our contracted sales in the first half of this financial year are shown in the table. This map provides an overview of our new projects to be launched in the next 10 months. We have built a strong pipeline, which is diverse to cater to homebuyers across all segments and preferences. In addition, we will continue to offer unsold units from completed projects as well as selected loan core properties when ready. The next section is our Hong Kong rental portfolio. During the period, the group's gross rental income remained broadly flat year-on-year at about $8.8 billion. Overall average occupancy remained stable at around 92%. The office portfolio held steady while the retail portfolio recorded a slight decline in rental performance. In contrast, residential leasing grew 10% year-on-year, driven by a steady increase in both rents and occupancy. Our retail portfolio continued to perform well, achieving an average occupancy of 94%. Meanwhile, the group malls registered year-on-year growth of tenant sales. The group will continue to leverage the shopping mall loyalty program, The Point, to increase customer stickiness with upgraded design and functions. Our VIP program, The Points Gold was launched, offering exclusive services to premium customers. For our office portfolio, overall occupancy was maintained at a high level of 91%. Notably, occupancy of IFC increased to 98% with support from the finance industry. The group continued to carry out asset upgrades to enhance quality of our office classes. We are excited to launch IGC, an iconic new office project that will support West Kowloon's transformation into Central 2.0. IGC is dual gateway connecting Hong Kong, Mainland and the world, ideal for big corporations to expand into Mainland or to go global. The landmark is unique in this excellent transport network served by 4 MTR lines and directly connected to Hong Kong's only high-speed rail station. The 2 twin-block towers spent 2.6 million square feet with 1 tower handed over to key tenant UBS in early this year. IGC sets new centers for modern workplace, achieving the world's highest green standards, while connecting West Kowloon with terraces and walkways. The residential leasing portfolio for higher rents and occupancy, it helps the group to capture rising demand from incoming tenants and students. Vega Suites on top of MTR Tseung Kwan O Station transformed hotel rooms into serviced suites suitable for long stay. In the next 2 to 3 years, the group's recurring income base will be expanded as new investment property come on stream, including 2 completed malls in Kowloon as well as IGC an Artist Square Towers Project. Turning to our property business on the Mainland. As at the end of December 2025, the group's total land bank on the Mainland was 64.6 million square feet in terms of attributable GFA. The pie chart on this slide provide a detailed breakdown of our completed properties and properties under development. As for property development business on the Mainland, the group recognized the property sales on the Mainland increased year-on-year to about $5.9 billion, driven by higher residential sales volume. Development profit rose to $2.9 billion with a satisfactory profit margin. About $4.1 billion of contracted sales have yet to be recognized. Some $4 billion is expected to be recognized in the second half of this financial year. During the period, the group achieved contracted sales of over RMB 1.3 billion on the Mainland. Major contributors included the serviced apartment at Cullinan West located in River West of Hangzhou IFC. Several projects will be launched over the next 10 months. On our Mainland rental portfolio, during the period, the group's gross rental income from the Mainland rental portfolio held steady at about $3.1 billion. In RMB terms, it was down 0.8% to RMB 2.8 billion. An increase in income from retail portfolio after a decrease in office rental. On the Mainland, our integrated projects feature complementary components and excellent access to public transport. Our retail portfolio showed a proactive approach to boost attractiveness, driving high occupancy and resilient performance. Meanwhile, our office portfolio with its premium quality and comprehensive amenities continue to appeal to multinational companies. Our property investment portfolio will expand further with the completion of 3 ITC in Shanghai in the first half of this year. The completed office tower has attracted a diverse mix of tenants while the recently completed Tower B is drawing interest from multinational corporations. Shopping mall ITC Maison will open in phases from first half this year. Hotel Andaz Shanghai ITC will see its grand opening in March this year. Let's turn to our Hotel business. During the period, the group's Hotel portfolio performed well. Revenue increased 3% year-on-year to $2.8 billion. Operating profit increased 14% (sic) [ 13.5% ] year-on-year to $428 million. Luxury hotel in Hong Kong recorded a strong increase in RevPAR. The Ritz-Carlton Shanghai, Pudong achieved record high room rates. The Royal Garden Kowloon East is the rebranded hotel above MTR Tseung Kwan O Station with 366 upgraded guestrooms. Moving on to ESG initiatives. The groups remain committed to sustainability development. For details of these key initiatives and sustainability performance, you may refer to these slides or the appendix at the back. Next, I will summarize the market and business prospects. In Hong Kong, steady economic growth continues under 4 centers and a hub framework despite geopolitical headwinds. Robust IPO activities and supportive policies are strengthening Hong Kong position as international financial and wealth management centers with expected U.S. rate cuts, rising rents and prices. Home purchase demand is also gaining traction. In key Mainland cities, growth will be supported by high tech investments and stronger ASEAN trade cooperation. Ongoing efforts to advance opening up and domestic consumption should lift consumer confidence. Our favorable mortgage environment and balanced housing measures will further support market stability. As for the group's business prospects, with our strong financial position, we will continue to seize opportunities to replenish our Hong Kong land bank while maintaining prudent financial management. On development front, we will leverage our long-standing reputation to achieve premium pricing and rapid sales. We strengthened our brand through quality and innovation, building premium homes with thoughtful design and modern facilities. With a strong pipeline in place, we will continue to rollout new residential projects, unsold units and non-core properties as they become ready. On property investment. We will sharpen the competitiveness of our portfolio and drive future recurring income. Besides enhancing our existing properties, New projects such as IGC in Hong Kong and 3 ITC in Shanghai will start to generate additional rental income gradually. I will end this presentation by summering highlights from the Chairman's statement. Regardless of economic ups and downs, the group continued to pursue new investments and add new landmarks to Hong Kong Skyline, with changes comes opportunity, and the group is ready to adapt to new circumstances, like the successful cases of IFC and ICC. The group is confident that IGC can help us capture opportunities from economic transformation of Hong Kong. The group will use the latest technologies to deliver high-quality properties and services to enhance the quality of living. This will fill the growth of the company and Hong Kong alike, building sustainable communities that align with Hong Kong's further integration with national development. This is the end of my presentation. Thank you.

Thank you for joining the briefing session again. Let me first introduce the panel members. Starting from your left, Mr. KW Lo, Member of the Executive Committee; Mr. Allen Fung, Executive Director; Mr. Christopher Kwok, Executive Director; Mr. Victor Lui, Deputy Managing Director; Mr. Raymond Kwok, Chairman and Managing Director; Mr. Mike Wong, Deputy Managing Director; Mr. Adam Kwok, Executive Director; Mr. Frederick Li, Group Chief Accountant. May I now invite our Chairman and Managing Director, Mr. Raymond Kwok to share the key message of today's briefing. Mr. Kwok, please.

Good afternoon, ladies and gentlemen, welcome. [Foreign Language] I wish you all a prosperous year of the horse. Thank you for attending today's briefing on our interim results. Let me start with highlights of our key developments for the 6 months ending in December 2025, the group achieved satisfactory results. Thanks to the active residential market in Hong Kong, the group achieved attributable contracted sales of about $17.4 billion in Hong Kong during the period. Major contributors included Cullinan Phase 2, NOVO LAND, Dynasty Court and Victoria Harbour. In January 2026, the group launched Phase 2A and 2B of Sierra Sea. This project achieved a record high subscription with contracted sales of about $9 billion. Over the next 10 months, the group plans to launch various new residential projects. These projects include the second phase of Cullinan Harbour, a project near MTR Tseung Kwan West Station and a project at Sha Po South in Yuen Long. The group continues to support the development of the Northern metropolis. During the period, we have completed lease modification procedures for Kwu Tung South, including this site, the group has, in total, 8 projects under development in the Kwu Tung area, providing over 4.5 million square feet of growth for area. In addition, we have formed a task force to further explore the development potential of the area, supported by our strong property sales and prudent financial management. The group achieved lower gearing and high liquidity. The healthy financial position allows the group to acquire land, should the opportunities arise. On property investment business in Hong Kong, the group's portfolio continued to provide a substantial and stable recurring income. Overall occupancy remained high. Earlier this year, we celebrated an important milestone with the completion of our international gateway center, the IGC sitting on top of the only high-speed rail station in Hong Kong, our ITC is the group's latest world-class commercial landmark. This project is seamlessly connected to the high-speed rail station. This is also 1 of the few high-speed rail stations in the world that sits right in the city center. At the same time, this landmark is conveniently served by the Airport Express and 3 major MTRC lines allows easy access to different districts and the airport, connecting destinations worldwide in all major cities on the Mainland. With the strategic location and unrivaled connectivity, our IGC is set to become a 2-way gateway linking Hong Kong with the Mainland and the mainland and international markets, it offers an ideal location for wealth management companies and leading corporations to expand into the Mainland or for Mainland companies to go global. Apart from its great design and premium quality, our IGC is one of the greenest buildings in the world. The project has received LEED and WELL precertification of the highest rating is also the first new construction project in Greater Bay area to achieve an excellent BREEAM rating. One of these towers was handed over to our anchor tenant UBS, leasing of the remaining towers is progressing smoothly. The group is also developing the Artist Square Towers Project at the West Kowloon Harbour front. This project is scheduled for completion in 2027. The 2 projects, IGC and our Artist Square Towers will combine with our ICC in West Kowloon and existing properties nearby to form a commercial cluster of over 8 million square feet. This will not only help to reshape West Kowloon to become Central 2.0, but also support Hong Kong's development into the world's biggest wealth management center. Building on the success of our IFC and ICC, the latest IGC can help us capture good opportunities at the onset of market upward trend. On the retail front, we continued to adopt best market practices and upgrade our malls. We also leverage, The Point, our membership program, to strengthen customer loyalty and improve shopper experience. Moving on to our Mainland business. The group achieved attributable contracted sales of about RMB 1.3 billion, mainly from the serviced apartment sale at Cullinan West of Hangzhou IFC. For property investment, our integrated projects on the Mainland put up a resilient rental performance. Our 3 ITC in Shanghai will be completed in the first half of this year. The office building Tower B, which is the tallest building in Puxi, Shanghai will provide premium office spaces with excellent transport connectivity. Our ITC mall, we call ITC Maison will open in phases, from the first half of this year. And our hotel there, the Andaz Shanghai ITC, we have this grand opening in March next month. Upon full completion of the whole project it will become a one-stop destination for commerce, shopping and entertainment. Moving forward, Hong Kong is pursuing further development under the vision of 4 centers and a hub, confident in the long-term prospects of both Hong Kong and Mainland we shall leverage our brand and experience to embrace new opportunities. We will continue to deliver premium properties and great services. And we shall advance hand-in-hand with our home city, Hong Kong. Thank you.

[Operator Instructions] May I now have the first question, please. the gentleman on your right side in the first row, please.

This is Griffin from Citi property team. So Happy New Year, and which you all a happy healthy year of the horse. I have 3 questions, if I can. So the first 1 on residential outlook. What is your view and your outlook for the Hong Kong Property home price? And how much do you expect the home price to increase? And is the price recovery sustainable? And are we happy for it? The second question is on the residential sales. Given the very strong momentum in the Hong Kong residential property market, so we will revise up our financial year 2026 sales target and accelerate some of the new launches. The third question is on the office. So can we have an update on the leasing progress for the IGC as well as on the Artist Square Tower in West Kowloon. And for the IGC, do we have a target occupancy by the end of this year?

Yes, maybe I answer the first 2 questions on the residential first. Yes, we allow that the Hong Kong residential market was entering into a new phase of recovery from second half of last year, primarily transaction reached 20,000, which is a record over the decade. While our residential wins is also strengthening amid the inflows of talents and overseas students. Actually, the rents was peaking in last year already, although the pace of growth has been slowed down a bit in recent months, they may due to seasonal factors. I think positive rental carry will continue to attract a lot of investors and end users, entering into the market, including those renters. Although the U.S. interest rate remain unchanged recently, I think the low mortgage rate will happen later this year due to the drop of HIBOR and that will also create strong support for the end users. And we also have an improving supply/demand situation due to the slowing on construction and government sales. Actually, the inventory for sale, whether under construction or completed is dropping. So I think on all these factors, the market will continue to do well for the rest of the year. And since we are only in the first year of recovery, normally in past history, property cycle, will last for a few years. So I think the strong momentum will continue with sustain further. On our sales target, apart from our sales recently on Sierra Sea Phase 2 in the coming 10 months, which are a number of projects to be launched namely Phase 2 of Cullinan Harbour and our Sha Po South project and our Tseung Kwan residential project links to the west rail station. In the second half of the year, that would be our Siu Lek project in Sha Tin and also our Kwu Tung project linked to the future MTR station. And lastly, the Tung Shing Lei project in Yuen Long at the end of the year. As I said, both the Sha Po South project and the Tseung Kwan residential project are belonging to medium-sized. So we would like to keep our sales target on FY '26 as $30 billion.

Okay. IGC is a rare project in terms of the scale, connectivity. Chairman mentioned about the fact that the project actually is being served by 4 railway lines and one is serving the Mainland. From there, to Shenzhen, Futian, it's only 15 minutes. We've been the CBD of Shenzhen and not to mention connecting to other cities into the Mainland. And also, we have the Airport Express Rail, which is next door seamlessly connected to IGC. They will bring tourists, visitors to the airport in less than 30 minutes. And also, the other to local MTR lines as well that will bring people closely each other to home. So with this connectivity, the unique design the build quality and also the sustainability credentials. The project is world class. And that's why we have seen the interest about the project has been going up in the recent months. And we are -- we have just delivered the whole tower, Tower 2B to our anchor tenant UBS last month. And we have a lot of interest in the pipeline, talking to us about various sizes. And these people, they are mainly from the financial services sector, insurance companies, wealth managers, fund managers, banks. We believe that we will be having the leasing progress well on track. Transaction has already been taken place. So we are very confident about doing much better towards the next few months into the later part of the year. So year-end, we are very confident about the leasing situation. About ASP, the Artist Square Project, which is next to the water located inside the West Kowloon Cultural District. And this is a very unique proposition. If you look at the fact that it is surrounded by performance, venues, exhibition, halls and a lot of cultural stuff. And also it's next to the water, and it's a lot of open spaces. It has already become a very good location in West Kowloon. And we see the beat is going up. More and more people is visiting the West Kowloon Cultural District. We have also seen a lot of interest from the commercial sector about ASP, given all the credentials that I've just mentioned. It is targeted to be ready by 2027. So we believe the leasing is also taking shape. And also because if you look at the recent activities in the financial market influx of capital. And these are all good factors contributing to the office leasing market as a whole. And you may aware that occupancy level in core business districts has gone up. Net take-up of about 1.8 million square feet has been recorded in 2025. That's quite a big contrast to what we have seen in the last few years. So the situation has been improving. More and more activities are going to happen in the pipeline already. So it's short IGC and ASP, we see the breezing progress will be doing well in the coming months in this year.

Also the IGC is on top of the high-speed railway, I think the high-speed railway provide even a better alternative or visitors to go to the Mainland and the airport. In fact, last year, in December, there were more Mainlanders use a high-speed railway than using our airport to go back to the Mainland. So we see a strong growth in traffic between Hong Kong and the Mainland. In fact, the high-speed railway covers all the major cities on the Mainland. So we are very positive towards Hong Kong as a global financial center and asset management center, wealth management center especially for the Mainland for our -- for the Mainland.

Can I have the next question, please? The gentleman on the right side, the third row.

This is Karl Chan from JPMorgan. I have 3 questions. The first one is about Hong Kong residential. So as we mentioned before Hong Kong price outlook is getting more and more positive. So just curious what is your latest pricing strategy for your residential projects in Hong Kong. Say, for example, for Sierra Sea, we saw that you guys the prices. But I would say that the price hike is still not like super aggressive, right? So in the future, would you consider being even more aggressive in the pricing or would you prefer to do this slowly to achieve the 100% sel-through rate every launch? And for DP margin for Hong Kong, would you expect any further improvement? What's your outlook for the Hong Kong development margin as a whole? So that's my first question. My second question is about asset disposal. So we have been disposing of Dynasty Court. Just curious of any other assets you may consider disposing off? Any other non-core asset disposal? And will Sun Hung Kai actually consider selling some parts of the Hotel assets to the student doem operators. Because recently, I guess, student dormatory has been a hot topic, right? So yes, so second question is about disposal. And the last question is about capital allocation and dividend. So now our net gearing has further improved. So what's our latest capital allocation plan? How do we balance between land acquisitions, dividend and [indiscernible]? And will Sun Hung Kai considering the dividend payout policy. I guess, in the past few years, we have been discussing the possibility of raising the suggestion that may be our dividend policy could be sticking to certain payout ratio based on IP recurring income instead of just earnings. So just curious, any change to the dividend policy. So that's my 3 questions.

So I answer the first question first. On our pricing strategy, we are always adhering to the current market condition. In last month, we have quickly disposed almost 1,500 units in Phase 2 of Sierra Sea and fetching a total sales of over $9 billion. We have a moderate price increase to achieve such a tick up while for our luxury project like those in Kai Tek, like Cullinan Sky, Cullinan Harbour has markedly improved, we have also made adjustment on price increment. So you can see that our pricing strategy is always flexible and efficient. And of course, under the ground to achieve the balance of volume and margin. Regarding our development margin, as I said, as market improves, we have also some price increment on our luxury project like Victoria Harbour, Cullinan Sky, Cullinan Harbour. And looking ahead, our 2 projects like Sha Po South and also the Tseung Kwan residential project. They are of relatively lower land costs that can deliver a higher profit margin for us. And as I mentioned earlier, we are now in the first year of the property cycle recovery. And I think the strong momentum will extend further. So we are well positioned on a healthy development margin on our projects in the coming future. Regarding asset disposal, apart from our IP Dynasty Court, which we are selling now. For the time being, we don't have other plans to dispose our rental properties. However, including noncore asset disposal, we will continue to review our portfolio from time to time and also monitor closely the investment market.

On the capital allocation and acquisition, et cetera, right? I think if our current policy to just pay 50% of the -- our profit as dividend because we are the global -- there's still a lot of global uncertainty, and we would like to keep our powder dry in case of more opportunities coming up in Hong Kong, yes. So in our experience, as Victor said, we're just picking up for 1 year, right? So therefore, there should be more opportunities come, especially in such a volatile world. And on the asset disposal, there's no intention for us to sell any of our hotels, right? Our hotels are all in very good location. And in fact, we don't have any office projects -- office projects ever want to convert to a hotel.

Yes, I want to mention that normally the conversion of student hostel is belonging to those grade C commercial properties with low quality, low occupancy and which does not apply to our portfolio. And as you know, our TOWNPLACE serviced apartment, in West Kowloon is doing well and we are able to attract premium tenants like those talents and also overseas students, especially those post-graduate students.

So we are doing well on our [indiscernible] serviced apartment, yes. that we are converting the hotel into a Royal Garden hotels. So we are optimistic about nice hotels and service climate sector.

Can I have the next question, the gentleman in blue jacket.

This is Mark Leung from UBS. I've got 3 questions. I think the first one, can I clarify the Chairman, you just mentioned the dividend payout policy is 50%. Should we -- is it -- we change it from 40% to 50% or now from 40% to 50% to now 50%? Or should we stick back to previous this kind of 40% to 50% range? That's the first question for clarification. The second question is more on the office rental outlook. Do we see any -- can we have any rental reversion guidance for IFC, ICC and Cullinan East? Any room to raise the rents because of the strong occupancy and how is the recovery trend beyond Central? I think that's the first question for office. Secondly would be on the retail side, given that the backdrop of the Mainland e-commerce spread and what is our leasing strategy? Are we planning to capitalize the rise of the Chinese brand like maybe Laopu Gold.

Office, KW?

For office rental, we have seen leasing activity accelerated with notable tenant upgrades and expansion mix. And these mainly happen in the core business area of Hong Kong by Central West Kowloon which has already become Central 2.0. In this area, we see banks, asset managers, funds and particularly wealth management corporations. I mean they are taking -- they are either considering or already taken more space and that happened, I would say, more than 12 months ago because it took time for them to consider, look at the right options and then you go safer terms, et cetera. So it'll take a bit of time. And we have seen that happening quite solidly in the last 12 months, and we believe that will continue. Office rents, particularly Central has been fairly stable in the last 12 months. We haven't seen as what we've seen before, continuous drop in the rent. That's about -- the full year is about 0.4% drop. So that's meaning stable. We definitely have seen rental stabilize. And for Tsim Sha Tsui, for example, it's only down 1%. So literally, there's no change because demand is coming back. So we could anticipate that when is a driving force behind it, but I think it's a bit too early to say. We have to see whether that will sustain into, let's say, the next 12 months or so. As I said earlier, that growing demand for upgrades, fight for quality, so that actually has benefited IFC and ICC. I mean, both projects, they are in superb locations. And these trophy buildings. We believe we continue to achieve high occupancy. For IFC, we are now 98%. And for ICC, it's 91%. And we see these figures will go up. And of course, in 98%, there's not much room to go up before we hit 100. And we have seen 100% and IFC many, many years, for many years already. And we believe that will come back very soon. So -- but for the -- our Kowloon East portfolio, Millennium City, the big cluster there, the situation remains competitive. Kowloon East is still having a lot of supply. So that situation probably will not change in the short term. But as demand is coming back, we see that will improve in due course. At the moment, our priority is to maintain stable occupancy for the group. So we need to see robust and stable occupancy, driving continuous income stream. But that's our priority at the moment.