Climate Resilience and Adaptation

Rising frequency and severity of extreme weather events pose material risks to real estate. Strengthening resilience is essential to protect asset value, maintain insurability and manage future valuation impacts in a changing climate.

We have established a strategic climate resilience framework focused on:

Net-zero transition plan: We have put in place a robust decarbonisation framework in order to meet our 2035 net-zero target and minimise the risk of stranded assets.
Climate scenario assessments: We conduct regular physical climate assessments across our portfolio to identify high-risk assets for priority adaptation action.
Adaptation measures at high-risk assets: We implement asset specific measures including physical enhancement works, SOPs for responding to extreme weather or other emergency events and targeted maintenance.
Community-wide stakeholder coordination: We maintain consistent dialogue with district councillors, government departments and other property managers in our ecosystem to ensure coherent flooding mitigation and response.
Valuation Impact Analysis: Strategic preparation for the impact of escalating climate risks on property values and marketability.

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

From Physical Risk Identification to Asset-Level Action

Anticipating physical risk is essential to protecting value. This work gives us a more granular understanding of our exposures and helps the Board evaluate how capital, insurance and resilience strategies are evolving across the portfolio.

In 2023, we undertook a comprehensive review of physical climate risks across our Hong Kong portfolio. Using a combination of asset-level data, flood mapping, drainage assessments and past event analysis, we identified flooding as one of the most material and immediate threats to asset resilience.

Rather than rely on standard industry responses such as insurance claims and reactive repairs, we chose a proactive path. For one of our highest-exposure properties, we made a targeted HK$5 million investment in flood resilience upgrades. These included structural reinforcements, realtime water detection sensors, drainage enhancement and emergency power supply systems. A summary of measures across sites is shown in the accompanying chart.

For detailed results from our previous climate risk assessments, please refer to the Properties section of our past Sustainability Compendiums.

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.