Annual Report 2021

Property Rental Business In the first half of 2021, with the pandemic retreating pandemic and the government releasing a consumption voucher scheme, Hong Kong’s retail market improved moderately. Yet, the overall retail sector was still under pressure, either from operational difficulties, or from shrinking business, which went on to bring pressure to the local leasing business on rental adjustment and lease renewal. Hence, there was an absence of significant improvement in rental income and vacancy rate of commercial shops and buildings in core districts. During the period, the Group continued to provide targeted relief to certain tenants impacted by the pandemic in order to lessen pressures on their operations. At the same time, the Group launched various promotional activities to encourage customer consumption, increase footfall and boost sales, including consumption rebates, themed weekend pop-up markets and various festive events. Along with increasing public awareness of environmental protection, our shopping malls also infused various green elements into its operational and strategic partnerships, including a rebranded loyalty programme with sustainable living concept; green pop-up markets; and the Gimme LiVe music festival embedded with music and environmental-friendly features. While various efforts were made to promote environmental protection, the Group also encourages shoppers to give back to society by collaborating with charities such as UNICEF and Food Angel. To further enhance the customers’ experience, the mall invited a number of specialty brands and restaurants to join in, including Umegaoka Sushi No Midori Souhonten, Nuttea, and the first image concept store for men RICKYKAZAF. Change in Fair Value of Investment Properties The Group’s investment properties (mainly the Mira Place) are stated at fair value, and reviewed on a semi-annual basis. The fair value of investment properties is determined based on the opinions obtained by the Group from an independent professional surveyor firm (Cushman & Wakefield Limited). The prolonged impact of covid-19 adversely affected the overall economy and consumption propensity, and carried pressures onto the local rental market for shops and offices. During the year, the fair value of the Group’s total investment properties decreased by HK$112 million (2020: decreased by HK$152 million). As at 31 December 2021, the book value of the overall investment properties was HK$15.2 billion. The investment properties of the Group are held as long-term investment, to gain recurring income. The revaluation impairment is non-cash in nature, and has no substantive impact on the cash flow of the Group. 015 Miramar Hotel and Investment Company, Limited Annual Report 2021 Management Discussion and Analysis