On behalf of the board of directors (the “Board”) of Goldin Properties Holdings Limited (the “Company” or “Goldin Properties”), I am delighted to present the interim results of the Company and its subsidiaries (collectively referred to as the “Group”) for the six months ended 30 September 2016 (the “Period”).
Goldin Properties achieved remarkable results during the Period for its grand project and exceptional performance in the property sector. Contracted sales of Fortune Heights was encouraging during the Period. This high-end residential property project featuring both aesthetic and functional designs meets customers’ needs in different aspects with a wide range of community services and facilities. This preeminent project has attracted attention from potential buyers since its early stage of development. Given the conflagrant property market in Tianjin during the Period, Goldin Properties grabbed this opportunity to boost the sales of Fortune Heights. The overwhelming response from buyers reflects great credit on the Group’s motto and reaffirms the project’s renown as the most desirable place to live in Tianjin.
The construction progress of the Central Business District (“CBD”) went smoothly. With the iconic skyscraper Goldin Finance 117, the tallest building in China and the third tallest building around the world in terms of structural height, the project demonstrates the Group’s excellent capabilities in property development. Goldin Properties’ project is highly appreciated and recognized by the market for its supreme quality, high standards of construction works and unique design. At the general meeting held on 31 May 2016, the disposal of the landmark Goldin Finance 117, a 37-storeyed grade-A office building, a mega high-end shopping mall and car parking spaces and other ancillary facilities at a total consideration of RMB18.00 billion (equivalent to approximately HK$21.59 billion) was approved by the Company’s independent shareholders. The transaction price reflected well the investment value and unlocked the market value of the Group’s property development project. The first installment of RMB6.00 billion (equivalent to approximately HK$7.00 billion) was received by Goldin Properties (Tianjin) Co., Ltd. (“Goldin Tianjin”), a wholly-owned subsidiary of the Company, from the buyers in full during the Period.
Despite the volatile and challenging global economy, China’s gross domestic product grew by 6.7% year on year for the second and third quarter of 2016 respectively, according to China’s National Bureau of Statistics. For the first nine months in 2016, the property sales grew by 26.9% year on year in gross floor area (“GFA”), in which residential property sales in GFA grew by 27.1%. Property sales surged by 41.3% year on year in value in the first nine months in 2016, in which residential property sales grew by 43.2% in value. China’s property market has ended a general growth phase and entered one of regional differentiation. The property market is generally stable while regional differences in investment and sales growth are good for destocking and sustainable development. Driven by supportive government
policies, property prices have experienced a strong rebound since the second quarter of 2015 and accelerated further in recent months due to excess liquidity. Housing prices for 100 key cities in China rose 13.7% for the first eight months of 2016. Of these, prices in tier-1 cities led the market by rising 25% year on year while prices in tier-2 cities rose by 12%.
According to an industry research report by Morgan Stanley, Tianjin market has turned very hot since June 2016. Property prices have increased by 30% since the beginning of 2016, with the majority of the increase in the second half of the year. Amid rising property prices, investment demand has picked up significantly, from around 10% of total demand in March to around 30% in September 2016. Specifically, uncertainty in other financial markets has led many domestic investors back to the residential market, which drove an increase in demand for high-end property and destocked inventory in China.
As the flagship project of the Group, Goldin Metropolitan (“Goldin Metropolitan” or the “Project”) enjoys unique economic and geographical advantages as well as favorable government policies. It is a mega-integrated development project with an aggregate planned GFA (above ground) of around 1,890,000 square metres which is strategically located in Tianjin Binhai Hi-tech Industrial Development Area (“Tianjin Hi-tech Area”). Tianjin Hi-tech Area is the first national high-tech industrial development zone approved by the State Council and an integral part of the Binhai New Area in Tianjin. The project offers convenient access to Tianjin’s existing advanced transport network, approximately 5 to 8 minutes’ drive to Tianjin South Station, 27 minutes by rail from Beijing, 20 minutes’ drive or 15 minutes’ trip by metro (line 3) from Tianjin’s downtown. Commute time is saved significantly with the comprehensive transport network.
Targeting upper-class and luxury property market with high-end domestic and foreign buyers, Goldin Metropolitan is designed as a meticulous urban complex featuring a mesmerizing architectural design and embracing a unique approach to the art of living. The project consists of three major elements, including (i) a CBD which will be wellpositioned to serve as a combined financial and commercial hub and filled with buildings of advanced, modern architectural design; (ii) a reputable, splendid, low-density residential estate Fortune Heights and (iii) Tianjin Goldin Metropolitan Polo Club where extravaganza of the time-honoured and elegant sport is hosted with the support of world-class leisure facilities. Construction work of the Project is on schedule with conscientious supervision of our professional team. The quality, aesthetical appeals and functionalities of the Project’s design are ensured as this masterpiece of an unprecedented scale is being handled by internationally well-known architectural consultancies and construction companies. These purpose-built facilities are crafted to match the stylish and elegant living environment and to satisfy the elite’s growing demand for prestigious lifestyle in China.
Goldin Metropolitan is expected to be completed by 2017 in phases with a total GFA of approximately 1,890,000 square metres. It is estimated that the total investment of Goldin Metropolitan will be US$9 billion to US$10 billion. In Goldin Metropolitan, we hope to provide a wide range of residential and business facilities to residents, tenants and to the community as a whole. We believe this marvelous project can shape Goldin Properties into a leading global metropolitan property developer. The Group is confident on capitalizing on the Beijing-Tianjin-Hebei Coordinated Development Program and on delivering better results in the long term after the Project is completed.
Central Business District
To showcase the state-of-the-art architecture of Goldin Metropolitan, the CBD consists of a wide range of functional buildings including the 597-metre-high grade-A office building Goldin Finance 117, high-rise twin towers, a mega-scale high-end shopping mall, cultural and recreational facilities, an international convention and exhibition centre, a distinctive boutique hotel and deluxe serviced apartments. The CBD can take full advantage of the coordinated development of Beijing and Tianjin, and will advance into a modern commercial hub of Tianjin. We are delighted to announce that the construction progress of CBD was in line with expectations. The construction of Goldin Finance 117 was on schedule and the building was successfully topped off on 8 September 2015 with its core wall constructed to the 117th floor. The construction is expected to be finished by 2017. The construction works in the second phase of the CBD, including those of the twin towers, a concert hall, a boutique hotel and an international convention and exhibition centre, and the substructure works in the third phase went smoothly.
Goldin Finance 117 is currently the tallest building in China and the third tallest building in the world in terms of structural height. The building is designed and constructed to the highest standards with superior architectural style and unique diamond-shape crown at the top that will shine within Tianjin’s cityscape. The indoor swimming pool, observation deck and revolving restaurant are located on the highest altitudes among its peers around the world. Moreover, the upper floors of Goldin Finance 117 with a combined GFA of approximately 86,357 square metres from level 94 to the top floor will be occupied by an international five-star hotel.
On 1 March 2016, Goldin Properties entered into a local sale and purchase agreement with Goldin Tianjin, 深圳市銀基宏業投資管理有限公司 (Shenzhen Yinji Hongye Investment Management Company Limited*), 高銀置地（ 天津）有限公司 (Goldin Development (Tianjin) Co., Ltd.*) and Goldin Special Situations Limited and conditionally agreed to sell the landmark Goldin Finance 117, a 37-storeyed grade-A office building, a mega high-end shopping mall, car parking spaces and other ancillary facilities at a total consideration of RMB18.00 billion (equivalent to approximately HK$21.59 billion) (the “Proposed Disposal”). The transaction was approved by the Company’s independent shareholders on 31 May 2016. Conditions for the first installment were fulfilled and the first installment was received by Goldin Tianjin in full during the Period.
The transaction realized the Group’s investment and market values in the property sector and contributed to a steady future development with sufficient financial support. Upon completion of the transaction, it will bring notable returns to the investors and unleash the market value of the Group’s property development project.
* The Chinese names have been translated into English for reference only.
Fortune Heights is a high-end residential property project that is built in a low-density layout and features both aesthetic and functional designs for the residents’ lifestyle pursuits. It is located adjacent to the CBD and Tianjin Goldin Metropolitan Polo Club. Notably, Fortune Heights’ garden villas, apartments, sky villas and town houses are built around Tianjin Goldin Metropolitan Polo Club, thus offering a panoramic view of the polo fields. The neo-classical and modern architectural styles convey a sense of an aristocratic lifestyle. This luxury residential zone offers a wide range of leisure community facilities and services to the home owners and tenants, while educational needs of their children are also well taken care of at the Maple Leaf International School. Fortune Heights highlights the Group’s motto “Elite Community Counts” and reaffirms its renown as the most desirable place to live in Tianjin.
Phase One of the Project consists of approximately 700 residential units comprising villas, townhouses and high-rise apartment buildings with a combined GFA of approximately 208,800 square metres. Phase Two is expected to be completed by the end of 2017 with a GFA of approximately 501,000 square metres. We are glad to see encouraging results in contracted sales of Fortune Heights being increased significantly during the Period, which the Group’s capability to capture the interest of market and met their demand for luxurious residential buildings.
Tianjin Goldin Metropolitan Polo Club
Tianjin Goldin Metropolitan Polo Club was opened in November 2010 with 890,000 square metres. It is one of the most prestigious polo clubs in China which is located in a 222-acre private estate of rolling lawns, manicured gardens and sparkling fountains. Embodying the elegance and nobility of the aristocrats in the golden old days, polo portrays and enhances the positioning of Goldin Metropolitan as a timeless, unique and splendid property project. The polo club can be easily reached from Beijing and offers the most comprehensive and world-class polo facilities as well as a number of health and wellness facilities, including two international standard polo fields, a practice field, indoor and outdoor polo arenas, a clubhouse, a 167-room luxury hotel, specialty restaurants, state-of-the-art stables and other ancillary facilities.
With its high reputation, Tianjin Goldin Metropolitan Polo Club has formed an unbreakable worldwide network by fostering ties with 24 reciprocal clubs in the world, including those in the United Kingdom, France, Italy, the United States, Argentina, New Zealand, Singapore, Indonesia and India, etc.
The Group has added a classical touch to contemporary urban lifestyle by hosting international tournaments of the time-honoured sport of polo regularly at Tianjin Goldin Metropolitan Polo Club. Together with Tianjin Polo Association and Hong Kong Polo Development and Promotion Federation Limited, the Group held its prestigious annual tournament Metropolitan Intervarsity Polo 2016 – The London Challenge from 12 to 17 July 2016. Similar to the previous years since 2013, we made Tianjin Goldin Metropolitan Polo Club the venue for the tournament. Six elite polo teams from the top universities in England and the United States, namely, the University of Cambridge, the University of London, the University of Oxford, Harvard University, Cornell University and Skidmore College, gathered at Tianjin Goldin Metropolitan Polo Club to vie for glory in the polo tournament.
Moreover, The Fortune Heights National Cup 2016 was also held at Tianjin Goldin Metropolitan Polo Club from 5 to 7 October 2016. Gathering four teams rated from 10 to 12 goals with the Patron of each team hiring the best professional players available in the world at this level. It produced amazingly competitive polo matches, providing all the excitement and glamour that the game of polo has to offer.
As the fourth largest city in China in terms of urban population, Tianjin is portrayed as an important hub for investment, ranked only after Beijing, Shanghai and Guangzhou. Tianjin is included in the Bohai Economic Rim to leverage its strength in aviation, logistics and shipping. The government has made it a priority to integrate all the cities in the Bohai Bay Rim and foster economic development. Moreover, the government has relocated all non-essential functions from Beijing to neighbouring cities or provinces which entails economic restructuring and the rationalization of the use of space. With further reform and opening up, Tianjin will become one of the designated areas attracting investments. We believe these moves will bring a new momentum to Tianjin’s economic restructuring and development, driving the reform of the city’s services, financial sector and industries.
Recently, China’s local governments are introducing new policies to rein in soaring housing prices with the purposes to keep prices stable and guard against bubble risks at those overheated property markets. A total of twelve cities including Beijing, Hangzhou, Shenzhen and Tianjin have restricted buyer qualifications, limited purchase amounts or raised down payments. We believe the market fluctuation from the new policies are short-term and would have less influence to the long-term success of Goldin Properties as our deluxe and multi-functioned property project is unique and well positioned in Tianjin. It is one of the most desirable residence in Tianjin with a wide range of services and facilities. Apart from the high-end residential property, construction of the other parts of the Project is progressing on schedule, and we look forward to greater success after the completion of the entire flagship project.
We believe Goldin Metropolitan will become an iconic landmark in the Bohai Economic Rim and allow the Group to fully capitalize on the economic integration of Beijing, Tianjin and Hebei. We have earned a good reputation among both local and international investors with high quality properties. It set a perfect cornerstone for future residential and commercial property projects.
Furthermore, upon the completion of the Proposed Disposal, the Group can improve its gearing ratio and strengthen its financial position. In respect of the property development and the property investment business, the Group will continue the development of the remaining assets of Goldin Metropolitan, and will keep operating its hotel and polo club through its Tianjin Goldin Metropolitan Polo Club complemented by Tianjin Goldin Metropolitan Polo Club Hotel.
Goldin Properties aspires to become a world-class metropolitan integrated property developer, and will try its best to complete this visionary project at the highest standards. It will continue to seize the opportunities arising from the country’s development strategies and policies and will contribute to the Bohai Economic Rim’s economic growth.
I would like to take this opportunity to express my heartfelt gratitude to the Group’s shareholders, investors and business partners for their full trust and support. Goldin Properties has earned wide recognition in the property sector and the capital market for its exceptional overall performance. I would like to thank my fellow Board members, the senior management team and all staff members for their unstinting and persistent efforts, teamwork and contributions. Looking ahead, we will continue our hard work to sustain the Group’s growth and maximize shareholders’ returns.
Hong Kong, 24 November 2016