Times Square - The Wharf (Holdings)

Business Assets
46,235
2,096
1,830
HK$ Million
Gross Revenue
HK$ Million
Operating Profit
Times Square
HK$ Million
The most successful vertical mall … the new Times Square with
enhanced tenant mix and shopper traffic distribution will bring a new era
of exhilarating shopping experiences to all visitors.
Annual Report 2013 / The Wharf (Holdings) Limited
2013
Business Assets
As at 31 December
2013
HK$ Million
2012
HK$ Million
Change
Properties
(at valuation)
Other assets
46,200
43,600
+6%
35
43
-19%
Total business assets
46,235
43,643
+6%
Property Value
46,200
(HK$ Million)
13
43,600
12
37,000
11
Gross Revenue
29,800
10
24,000
09
2013
HK$ Million
2012
HK$ Million
Change
Retail
Office
1,492
604
1,352
556
+10%
+9%
Total gross revenue
2,096
1,908
+10%
2013
Gross Revenue
2,096
(HK$ Million)
Operating Profit
Retail
Office
Total operating profit
13
2013
HK$ Million
2012
HK$ Million
Change
1,301
529
1,198
480
+9%
+10%
1,830
1,678
+9%
1,908
12
11
10
09
1,732
1,533
1,426
29
30
Annual Report 2013 / The Wharf (Holdings) Limited
Business Review
Times Square
TIMES SQUARE
In spite of a major renovation project undertaken at the mall in 2013, overall revenue increased by 10% to
HK$2,096 million and operating profit by 9% to HK$1,830 million.
Retail
Riding on its unique 17-level retail mall design, diverse trade-mix and direct connection to the Mass Transit
Railway, Times Square is among the most successful vertical malls in the world and remains a must-visit
shopping landmark in Hong Kong. Times Square’s success also stems from its prominent location at the
heart of Causeway Bay, one of the most dynamic retail districts in Hong Kong. The basement levels of Times
Square which are connected with the MTR continued to demonstrate themselves as an effective traffic feeder
and hence have been immensely productive.
Despite a substantial drop of 17% in retail space for a major renovation for most of 2013, total retail sales at
Times Square increased by 1.6% to a record of HK$9.4 billion or HK$1,729 per square foot per month. Retail
revenue increased by 10% to HK$1,492 million with occupancy maintained at virtually 100% at the end of 2013.
A new Times Square
The substantial completion of the bold revamp by the end of 2013 stoked the formation of the new Times
Square with the most extensive product range, entertainment and culinary choices at the heart of Causeway
Bay. The new Times Square includes a line-up of coveted luxury brands, with Chanel, De Beers, Fendi, Louis
Vuitton and Tiffany & Co. opening in the second half of 2013, as well as Dior Homme in early January 2014. It
also complements the sky escalators in the atrium with a brand new and state-of-the-art 5-house cinema CINE
TIMES across the 12th to 14th Floors with a wider range of movie choices. This iconic cinema with the most
audience seats (approximately 900 seats) on Hong Kong Island, destined to offer a new movie experience for
movie-goers with elegant leathered seating and top-notch audio/ visual facilities, opened in November 2013.
Also enhancing the value of the upper floors is a refined food and dining offer including three high-end
new restaurants on the 10th floor – Yunyan Sichuan Restaurant and Pak Loh Chiu Chow Restaurant which
opened in late 2013 and early 2014 respectively as well as Enmaru, the top-ranked Izakaya style Japanese
restaurant which made its debut to HK in January 2014. Other additions across the 12th-13th Floors included
PizzaExpress, Nha Trang, School Food and Zushi Ana. Food Forum elevators have been transformed into
bigger and faster rides for customers from ground floor to the Food Forum and CINE TIMES levels. The much
anticipated sky cinema alongside the outlet bazaar and refined culinary offerings will draw high volumes of
foot traffic and create enormous value at the upper floors.
The new Times Square is set to generate an estimated incremental rental value of HK$200 million per year.
In addition, culinary offerings across the 3rd and 4th Floors were further refined with the addition of Ladurée
Tea Room, the renowned French café famous for its macaroons, and LGB Rouge, the Parisian café with oriental
elements introduced to the menu and setting. Toast Box, a popular Asian restaurant, also opened on the
basement floor in May 2013 whereas agnès b. CAFÉ L.P.G /Delices was relocated to the 6th floor.
The atrium floors were further enriched with the addition of a.testoni, Daks, Loewe, MCM, Qeelin, TAG Heuer,
Tissot and Versace Jeans. Some existing tenants including Aquascutum, Cerutti 1881, Jaeger-LeCoulture,
Kent & Curwen and Saint Laurent Paris were relocated with new images with a view to uplifting the shopping
atmosphere and experience.
Powerful and innovative marketing campaigns at Times Square continued to capture shoppers’ attention,
reinforcing its positioning of “The Place of Happenings”. Apart from the New Year’s Eve Apple Countdown
which is among the most popular events in Hong Kong, Times Square hosted its first ever Hong Kong Music
Festival on the Open Piazza in late 2013 and lined up over 120 performances from local musical groups to
bring their unique sounds to Times Square. To position CINE TIMES as the entertainment focal point in
Hong Kong, Times Square collaborated with UA Cinemas to launch high-profile movie premieres such as
Annual Report 2013 / The Wharf (Holdings) Limited
31
32
Annual Report 2013 / The Wharf (Holdings) Limited
Annual Report 2013 / The Wharf (Holdings) Limited
Business Review
Times Square
Retail Tenant Mix (by Rental, Area and Sales)
“As the Light Goes Out” and “The Monkey King” since the opening of CINE TIMES. The new Times Square
TV commercial – “This is Your Time” featuring new elements of the mall through a series of six 15-second
commercial clips was launched last December. It aims to build a personal connection with the audience
through depicting the “voices” of “typical Times Square shoppers”.
The highly value-accretive makeover has sparked an unparalleled position of the new Times Square in an
ever-intensifying competitive landscape. With enhanced tenant-mix and shoppers’ traffic distribution, the
renewed and better Times Square captures an even wider range of shoppers who demand ever-higher levels
of service, sophistication and entertainment. It brings a new era of exhilarating shopping experiences to all
visitors and pushes the bar to new heights.
Office
On the back of positive rental reversion, revenue of the office sector increased by 9% to HK$604 million.
Occupancy stood at 95% at the end of 2013.
Times Square remained the preferred office location for multinationals in the service and consumer goods
industries. Lease renewal retention was maintained at 65%, with renewals from tenants including Apple Asia,
Avaya, BMC Services and L’Oreal. New lettings in 2013 included Grand Central, SAP, and Vicini Apac. There
were also in-house expansions from Bayin Resources, Google, Hitachi Data and SAIC.
% by Rental
% by Area
% by Sales
Fashion
Jewellery, Beauty, Healthcare and Accessories
33.1
31.4
23.2
14.8
17.8
29.6
Department Store, Confectionery Products
13.6
21.3
25.0
Electrical & Audio-visual Equipment
7.2
6.4
16.6
Sports Wear
5.3
3.9
4.3
Restaurant, Fast Food, F&B, Entertainment
8.5
27.5
5.7
Others
0.9
2.9
1.0
100.0
100.0
100.0
Total
Remarks: :
Lux retailers only came on board from second half 2013 onwards, with majority of tenants opening from September onwards
New cinema Cine Times opened in November 2013
New restaurants at Food Forum opened in second half 2013 & first half 2014
Portfolio Information
Retail
Office
Gross
Floor Area
(sq ft)
Revenue
(HK$ Million)
Average
Occupancy
(%)
Year-end
Valuation
(HK$ Million)
936,000
1,033,000
1,492
604
98
95
32,070
14,130
33