Chair of Hang Lung Properties talks business strategy for mainland China’s property market

Market has been under distress for the last couple of years. What is the operating environment like as a result and how does it affect your business operation? The mainland has had a very polarized 2023. It looks like it may not be as polarized in 2024. When I say that, I mean that the first half of 23 was very, very strong, at least the 1st 4 1/2 months. The second-half of the year was a little bit more challenging. We benefit from having a very unique property mix. We are mostly in luxury retail and luxury retail has been quite resilient. So that has been holding up pretty well for us. But the operating environment more broadly, I think when you talk about second tier malls, second tier cities or third tier cities or even worse, if you’re a second tier mall in a second tier city, it could be pretty challenging. I think the mainland customers are extremely discerning nowadays. The quality and the selection and the ease of online retail is just so, so good that you have to have something extremely compelling offline to attract them into your mall. And that’s what we strive to do both in the high end and in our more mass offerings. Sustainability is a buzzword and you are the chair of Hanglong Sustainability Steering Committee. You’ve set ambitious goals, 25 targets to be achieved by the end of 2025. What active steps are you taking to achieve those targets? So our 25 by 25 as we call it internally are actually just a stepping stone to our 2030 targets. And our 2030 targets are again just a stepping stone to our 2050 targets. And our 2050 target is carbon neutrality among operations. For example, we have committed to 40% reduction of greenhouse gas emissions intensity for all of our projects. We’ve committed to an 18% reduction in electricity consumption among all of our projects. This is intensity, electricity consumption intensity with a 2018 baseline. So all of these are quite aggressive, but you know, looking at the way things are going today, I think we’ll be able to meet most of them. When it comes to ESG, you’re dealing with your tenants and it’s hard to control what they do, but you did form a partnership with LVMH on climate and sustainability. Has it been successful for you and do you intend to roll that out similar partnership with other tenants. Our partnership with LVMH is really the jewel in our crown. This is an extremely ambitious project that was undertaken between the two groups. We’ve tried to replicate it with some of our other partners, but when we’ve done so, we found out that the LVMH partnership was just so broad and so deep that it was almost impossible or so far it has been impossible to replicate with other partners. My colleagues are attending their briefings, their colleagues are attending our briefings. We’re sharing data which is very difficult to get these large companies to do. I understand that LVMH have signed similar partnerships with other landlords of theirs in other parts of the world, but even they were not able to reach the same level of depth and complexity that they’ve reached with us. And I think in this case it was really a deep alignment of values and of principles. This ownership of sustainability is something that was quite unique, I think, between the two groups. And so we were able to do something quite unique and really, really groundbreaking.