Weber Wai Pak Lo

Weber Wai Pak Lo formerly served as chief executive officer of Hang Lung Group Limited and Hang Lung Properties Limited. He joined Hang Lung Group in 2018 and took over as chief executive officer, and by early 2022 had completed his fourth year with the group, during which he partnered with Adriel Chan to form the core of the management team. Reviewing the more than three years since he took over as chief executive officer, he said that the period had brought quite a few crises and adversities, including the blow of the COVID-19 pandemic, which taught him the truth that “every crisis brings opportunity” and the importance of “customer first”; he thanked colleagues in Hong Kong and the mainland for working together side by side to face and overcome the difficulties and setbacks brought by the overall market environment. He also said that, for a commercial property developer with more than 60 years of history, good governance is the foundation of corporate success; since taking over as chief executive officer, he had launched many internal projects, set best practices and standards, built elements of crisis management into every project, and optimised company processes to improve efficiency, while setting five development strategies for the team: customer first, building the Hang Lung brand experience, strengthening the application of technology, executing strategy resolutely, and upholding Hang Lung’s core values.

2021 was the year of legacy marking Hang Lung Group’s 60th anniversary. According to a February 2022 report by Guandian, Hang Lung Properties’ total revenue in 2021 was HK$10.321 billion and its profit HK$7.371 billion, up 15% and 14% respectively; underlying net profit attributable to shareholders rose 4% to HK$4.365 billion, a return to growth after the pandemic. The growth came mainly from mainland leasing income: rental income from Hong Kong properties fell 7%, but this was offset by a 31% rise in Hong Kong-dollar terms in rental income from the mainland portfolio; rental income from the 10 malls operated on the mainland grew 25% year on year, with revenue at seven high-end malls up 30%. Weber Wai Pak Lo later summarised that property leasing revenue at Hang Lung Properties and Hang Lung Group rose sharply by 16% and 15% year on year respectively; in the financial year ended 31 December 2021, rental income from the two companies’ mainland portfolios reached 5.757 billion yuan (Hang Lung Properties, up 23%) and 6.141 billion yuan (Hang Lung Group, up 22%); excluding the rental contribution of the office tower and mall at Heartland 66 in Wuhan, revenue at the two rose 19% and 18% year on year respectively. He also noted that all of the group’s high-end mainland malls recorded double-digit revenue growth, with tenant sales up between 33% and 89% year on year; after Olympia 66 in Dalian was repositioned as a mall gathering luxury brands, its revenue in the second half of 2021 was 45% higher than in the first half; sub-premium malls such as Palace 66 in Shenyang, Parc 66 in Jinan and Riverside 66 in Tianjin grew 2% year on year.

In March 2021, Hang Lung’s tenth Hang Lung Plaza on the mainland, Wuhan Heartland 66, opened, with a commercial area of 177,000 square meters, following the high-end family shopping center positioning of its earlier Shanghai project. By the end of that year the mall’s occupancy rate reached 84%; in less than 10 months of operation it recorded leasing revenue of 153 million yuan and tenant sales of nearly 1 billion yuan, and brought in more than 250 brands, of which 110 entered as Wuhan exclusives, first stores or flagship stores. Weber Wai Pak Lo said that the success of Wuhan Heartland 66 had provided very good experience, that high-end family shopping would be one of the mainstream trends in future, and that its promotion at Hang Lung Plazas in other cities was not ruled out; he also pointed out that this high-end family shopping positioning was not a new concept, as Hang Lung had entered the market with this positioning as early as when it developed its Shanghai project, and would bring in brands and build business formats around local consumer demand and consumption habits. He also recalled that when Wuhan was under lockdown in the early days of the pandemic, Hang Lung promptly reduced rents for all tenants, and after the lockdown was lifted the mall’s business improved compared with before and the relationship between the company and its tenants became closer.

With the opening of Wuhan Heartland 66, Hang Lung Properties launched its high-end serviced residence brand “Hang Lung Residences” on the mainland, and its first project, Wuhan Hang Lung Residences, held unveiling and topping-out ceremonies. Weber Wai Pak Lo said that the launch of “Hang Lung Residences” was a decision based on the group’s long-term planning strategy, and that Hang Lung’s mainland business would expand from malls and office buildings into serviced apartments. Under the plans at the time, Wuhan Hang Lung Residences would open for pre-sale in the second quarter of 2022, the Wuxi Hang Lung Residences project was expected to be unveiled, and the Hang Lung Residences in Kunming and Wuxi would be launched on the market successively at the end of 2022 and the beginning of 2023. The first project of HANGOUT, the flexible workspace brand launched by Hang Lung Group in 2020, was also located in Wuxi.

Looking ahead to 2022, Weber Wai Pak Lo held that China’s GDP grew 8.1% year on year in 2021, averaging 5.1% over two years; growth might slow from a high base, but with domestic consumption remaining strong and supportive policies, continued GDP growth was assured. Citing data, he pointed out that national retail sales of consumer goods in 2021 rose 12.5% from the previous year, averaging 3.9% over two years; final consumption expenditure contributed 65.4% of economic growth, lifting GDP growth by 5.3 percentage points, above pre-pandemic levels. He considered consumption upgrading to remain the main theme of the Chinese market and expected the domestic consumer market to keep up a steady, improving and continued recovery in 2022.

Weber Wai Pak Lo said that in 2022 Hang Lung would further actively expand in the mainland market, continue to increase investment on the mainland, focus mainly on developing high-end commercial properties, maintain growth in its mainland business by promoting the “first-store economy” in target cities, continue upgrading the business formats of existing projects, and push forward projects under construction; in addition to “HANGOUT” and “Hang Lung Residences”, it would also strive to develop new business segments. He stressed that Hang Lung was optimistic about the future development of high-end commercial real estate on the mainland. He explained that Hang Lung was then developing 11 projects in nine mainland cities and had replicated its Shanghai success in Shenyang, Jinan, Wuxi, Dalian, Tianjin, Kunming, Wuhan, Hangzhou and other cities, with the Hang Lung Plaza “66” brand becoming the local “pulse of the city”; in 2021 the group fully refreshed the brand and introduced new staff uniforms, demonstrating its principles of “customer first” and “people first”.

On the service side, Weber Wai Pak Lo said Hang Lung adhered to its “customer first” philosophy. Its membership programme HOUSE 66, implemented at all its mainland malls, was maturing and, combined with digital social platforms, was accelerating the growth of luxury brands’ sales at its malls. HOUSE 66 provides members with personalised, tailor-made services and plays a key role in strengthening customer loyalty and bringing the company closer to its customers and tenants; the company was also stepping up its use of technology, using big-data analysis to understand customer needs and enhance interaction with customers. In Hong Kong, Hang Lung also built a CRM system through its hello Program to put the “customer first” philosophy into practice. He also recalled that after Ronnie C. Chan became chairman, he foresaw the economic opportunities on the mainland, and in 1992 Hang Lung led the way into Shanghai by taking part in a mixed-use property project that later became Grand Gateway 66, launching the development of the “Plaza 66” brand; according to Guandian, Hang Lung at that time owned two high-end malls in Shanghai, Plaza 66 and Grand Gateway 66.

On sustainability, Weber Wai Pak Lo explained that at the end of 2020 Hang Lung published sustainability goals and targets to be achieved by 2030 or earlier (2030 ESG Goals), and in December 2021 it further set 25 targets to be met by the end of 2025 or earlier (the “25 by 25 Sustainability Targets”), covering climate change, resource management, well-being and sustainable transactions. He cited examples: Grand Gateway 66 in Shanghai adopted energy-saving and carbon-reduction designs after an asset enhancement programme; at the end of 2021, Spring City 66 in Kunming switched fully to renewable energy and achieved net-zero carbon emissions for the annual electricity consumption of both landlord and tenant operations, a first among Hang Lung’s development projects and the first among integrated commercial projects in Yunnan Province. On the Hong Kong retail market, he said that over the previous two years the pandemic had flared repeatedly in both places and the border had long remained closed; people’s lives had entered a new normal and the retail market could no longer rely on visitors as before, so Hang Lung re-examined its existing projects, optimised its tenant mix and focused on local consumption. He believed the worst for Hong Kong’s retail market was over and remained optimistic about the Hong Kong business, but even as the economy began to recover, it might not return to pre-pandemic levels. He stressed that Hang Lung had always pursued a dual-track strategy for the mainland and Hong Kong, and was confident the group’s business would develop steadily even without the border reopening.