Climate Resilience and Adaptation

With real estate in Asia Pacific facing acute climate risks from sea level rise to heat waves, climate resilience is now a key determinant of long-term asset value and investment decisions.

We have established a sustainable, long-term climate resilience framework and strategy which includes:

Net Zero transition plan to minimise exposure to transition risks
Regular assessments of the portfolio’s resilience according to the latest climate scenarios
Targeted adaptation measures at high-risk assets
Preparations for the impact of escalating climate change risks on property valuations

To enable transparent, consistent, comparable, and verifiable climate-related information, the following disclosures align with the latest version of the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and have taken reference to the IFRS S2 Climate-related Disclosures released by the ISSB in June 2023.

Targets

Status

Conduct climate risk assessments across our portfolio and develop corresponding climate resilience strategies

Engage with investors and regional-level policymakers to develop comprehensive climate resilience strategies

Achieved On Track Lagging Behind Not Commenced

The Quayside

Physical Climate Risk Assessments

In 2024, we conducted a comprehensive physical climate risk evaluation of 12 high-income properties, leveraging AXA’s climate models from insurance underwriting. This involved calculating potential financial impacts and identifying critical areas for adaptation strategies.

Tropical cyclones and floods are the most impacting perils by 2050, with Wan Tsui Shopping Centre and TKO Gateway the most-at-risk sites. Heat waves are also forecasted to become a moderate risk for our assets in Mainland China.

Considering the financial impact estimates and the pessimistic climate scenario we used, we believe the results of this analysis to be within our expectations and risk appetite.

For more information on property-level climate risk assessment, please refer to the Properties section of our website.

Chai Wan Car Service Centre

Keeping Water at Bay

During the early stage of due diligence for our Chai Wan property acquisition, flood risk was identified as the primary physical climate risk due to its proximity to the seafront. Different business units were brought into the discussion to understand and evaluate the asset’s vulnerability, mitigation options, costs, and potential insurance risk prior to acquisition. The final investment plan included flood mitigation measures, transfer of risks upon completion of acquisition and identified required updates to standard operating procedures.

Temple Mall

Ensuring Efficient Flood Recovery

In September 2023, Hong Kong suffered one of the most extreme rainfall events in over 140 years. Due to the heavy rain and the failure of Wong Tai Sin’s drainage system after Typhoon Saola, the basement level of Temple Mall North was flooded, affecting 8 tenants.

Link engaged 40 cleaners to help with overnight clearing of the water, assisted by 6 pump trucks and 15 sump pumps. Within 24 hours, all floodwater was cleared while another 24 hours was needed to clear the remaining mud and debris. In the end, the lower ground floor was reopened in just 54 days.