Other businesses of MTR Corporation Limited

Property development is an important part of the subway company's business and provides an important source of income for the construction cost of railway projects. At the same time, due to the passenger range generated near the real estate development project, it will help to increase the number of passengers on future railway routes.

At the same time of railway construction, the subway company signed agreements with a number of real estate developers to participate in the development of residential and commercial properties on the upper floors of subway stations and garages and nearby. The profits obtained by the MTRC from these development projects supplement the relevant railway income, thus increasing the investment return of the new railway line construction.

The subway company has made great achievements in the planning, design and project management of railway property development projects. The principle of MTRC's property development is to minimize the direct risks of property development, so as to reduce the risks faced by the Group in the property market and related risks.

The Government of the Hong Kong Special Administrative Region grants the MTRC the right to develop land for real estate development based on the land price assessed by the full market value (the land not considered for assessment is located along the railway). The subway company's practice in property development is to arrange third-party developers to carry out actual development projects according to the requirements of the subway company. Generally speaking, developers are responsible for paying all development costs (including government land price, construction and preparation costs, marketing and sales costs, professional fees, financial expenses and other expenses) and bearing all development risks. MTR Corporation benefits from property development, and shares the profits from the sale or lease of the property (after deducting the development cost), the physical assets or the advance payment paid by the developer according to the agreed proportion. Property leasing, management and other business.

At present, the MTRC has more and more investment property portfolios, mainly shopping malls and office buildings, which are carefully selected from its development projects. These investment properties bring recurring income and strengthen the asset base of the Group. By the end of 2006, MTRC's share in the total investment property portfolio included retail properties with a leasable area of 65,438+033,927 square meters, office buildings with a leasable area of 39,529 square meters and other properties with a leasable area of 65,438+0,460 square meters. The investment property portfolio of MTR Corporation includes International Finance Center Phase II 12 Shopping Mall and 18 Floor Office Building.

Large shopping centers owned by MTRC with multiple investment property portfolios include:

Telford Plaza (Kowloon Bay Station)

Lvyangfang (Tsuen Wan Station)

Xinghua New City (Xinghua Village Station)

Tsing Yi City (Tsing Yi Station)

Lilian Street (Kengkou Station)

Junhuifang (Tseung Kwan O Station)

Fiona Fang (Kowloon Station, 80% owned by MTR Corporation and the rest by Sun Hung Kai Properties)

Liancheng Plaza (Shatian Station)

Haiqu Square (Tuen Mun Pier Station)

Jing Jun Plaza (Fotan Station)

New Tuen Mun Shopping Mall (Light Rail Depot Station)

Hengfu Shopping Mall (Sansheng Station)

Shopping Center Part of Sunrise Kangcheng Regional Development (Kangcheng Station)

In the property business of Ginza Mall (Dongzhimen Station, beijing subway line 2), MTR Corporation also provides services such as MTR property management, agency, MTR Octopus control system, and building environmental sanitation.

By the end of June, 2007, the MTR Corporation had several property management contracts in Hong Kong, managing 6 1, 2 14 residential units and about 583,372 square meters of office and retail space. In 2000, MTR Corporation established a new service brand, Premier Management Services, to manage selected high-end properties, including the second phase of the International Finance Center and the Arc de Triomphe. The MTRC is now developing property consultancy and management services in the Mainland. At present, there are seven property management contracts in the Mainland, and new contracts have been signed to provide management and consulting services for high-end property development projects in different parts of China. In 2006, SOHO China Co., Ltd. signed three new property management contracts, entrusting MTR Corporation to manage luxury office buildings/commercial development projects located in Beijing Central Business District, including SOHO Shangdu, Jianwai SOHO Phase VII and Chaowai SOHO. In the first half of 2007, the two sides signed a memorandum of understanding on two office buildings and commercial development projects in Beijing, one at Guanghua Road and the other at Xidan. The subway company also signed a long-term lease for the operation and property management of Beijing Ginza Mall, which opened in June 2007 with a rentable area of 65,438+09,295 square meters. The Tung Chung Cable Car Project owned by MTR Corporation is called Ngong Ping 360, which is a cable car (crane) route connecting Tung Chung and Ngong Ping on Lantau Island, Hong Kong. The system is managed and operated by Ngong Ping 360 Limited, a subsidiary of MTR Corporation. "Ngong Ping 360" was launched on September 8, 2006. In June 2007, during the annual inspection during non-operating hours, a cable car fell off. Fortunately, there was no personal injury involved, and the cable car operation service was terminated immediately, and detailed investigation and follow-up were carried out. The MTR Corporation and the Electrical and Mechanical Services Department of the Hong Kong SAR Government allowed the cable car to resume carrying passengers after they were completely satisfied with all aspects of system security.

In 2008, Ngong Ping 360 Cable Car and Ngong Ping Market brought in HK$ 65.438+56 billion to MTR Corporation, with more than 65.438+06 million passengers. The MTR Corporation also launched a box service, and jointly launched promotional activities with Fiona Fang, Tsing Yi City and MTR Friends Association to attract tourists. MTR Corporation launched Octopus Card on 1997. Since then, contact-free Octopus cards have become popular in Hong Kong. At present, about 7 million people in Hong Kong regularly use more than 654.38+08.7 million Octopus cards, with an average daily transaction volume of HK$ 89.8 million. Octopus cards are not only widely accepted by various public transport, but also by some large chain convenience stores, supermarkets and fast food restaurants. Through portable Octopus processors, Octopus cards have expanded their business to small and medium-sized retail markets, attracting more retailers to adopt Octopus cards.

Octopus Card is owned by Octopus Card Co., Ltd., a non-controlled and indirect subsidiary of MTR Corporation, and is the largest shareholder. MTR Corporation currently owns 57.4% of the issued share capital of Octopus Holdings Limited, while Octopus Holdings Limited owns all the issued share capital of Octopus Card Limited. The remaining 42.6% of the issued share capital of Octopus Holdings Limited is owned by Kowloon-Canton Railway Corporation, Kowloon Bus Holdings Limited, Citybus Limited and New World First Bus Services Limited. Although MTR Corporation holds 57.4% of the issued shares of Octopus Holdings Limited, its voting right at the board meeting of Octopus Holdings Limited is limited to 49%, and no shareholder of Octopus Holdings Limited can unilaterally control the board of Octopus Holdings Limited. After the merger of the two railways, the shares of the MTRC and the Kowloon-Canton Railway Corporation remain unchanged.

Octopus Card Limited has expanded its business in Hong Kong and won several contracts to expand its business outside Hong Kong, including the Netherlands and Changsha, China.