Nan Fung Group Launches 'Net Positive Lease' - The First Tenant Engagement Initiative in Hong Kong to Offer Management Fee Incentive

Nan Fung collaborates with Tenants,Employees and Community Partners for Fourfold Synergy in Driving Sustainability

HONG KONG,Aug. 7,2023 -- Nan Fung Group (Nan Fung) is pleased to announce the launch of 'Net Positive Lease',a new tenant engagement initiative that aims to drive sustainability by collaborating with tenants,their employees,as well as community partners. The goal of 'Net Positive Lease' is to create positive impact for both society and the environment.

Nan Fung Group AIRSIDE at Kai Tak

Nan Fung has a long and proud history of cultivating sustainable communities. Its sustainability framework,'SEWIT',is based on five strategic pillars to create an eco-friendly and resilient city: Social Cohesion,Environment,Wellness,Innovation,and Technology. Under 'Net Positive Lease',tenants sharing the same vision are encouraged to commit to the 'Net Positive Pledge' (the Pledge),which breaks from conventional green leases by offering a series of unparalleled incentives and benefits,including management fee incentives,marketing exposure,priority access to eco-provisions and programmes,and much more,to mobilise tenants to achieve sustainability goals alongside the Group. It seeks to strengthen connections between Nan Fung Group,tenants,and stakeholders in neighbouring communities,with the goal of truly giving back to the environment and society.

The Net Positive Pledge was met with great enthusiasm when it was first introduced to tenants from Nan Fung's key portfolio in early 2023. The first batch of committed tenants includes: city'super,SoHo House,AEON (Tseung Kwan O Store),Café de Coral Group and its restaurants,The D. H. Chen Foundation,and Groupe SEB. Nan Fung expects approximately 25% of its major portfolio in Hong Kong (by leasable floor area) to commit and become part of the Net Positive Pledge community by the end of 2023. As part of the Group's ongoing commitment to sustainability and with the vision to continue expanding its scope of impact,it also plans to roll out and implement the Pledge overseas in phases,at its portfolio in mainland China,the United Kingdom,the United States,and other locations.

Vanessa Cheung,Group Managing Director of Nan Fung Group,says: "Guided by the SEWIT framework,we seek to continuously and sustainably create positive value for the community,wider society,and environment. We envision the Net Positive Pledge to be a pioneering initiative that will rejuvenate sustainability endeavours and redefine the tenant-landlord relationship,harnessing the power of technology and data to systematically establish,refine,and attain sustainability goals for a better shared future."

city'super,which is about to open a new branch at AIRSIDE,Kai Tak,was one of the first tenants to commit to the Net Positive Pledge. "For years,adhering to the spirit of craftsmanship,city'super has been committed to creating positive impact for all customers and stakeholders in a sustainable way. Our decision to undertake the Net Positive Pledge signifies this continued commitment,with the aim of promoting sustainable practices and influencing the behaviour of our customers and staff,as well as the wider community. The data sharing and analytics platform provided by the Pledge helps us set clearer goals and conduct timely reviews,enabling us to track progress and continuously improve sustainability efforts."

Café de Coral Group was also among the first batch of tenants to commit to the Pledge. Piony Leung,Managing Director (Hong Kong) of Café de Coral Group says: "As one of the leading catering groups in Hong Kong,we are committed to creating long-term shared value for our stakeholders including customers,employees,and the community. This Pledge has given us an opportunity to monitor our environmental performance and review our operations so that we can minimise our impact on the environment through proper management of energy,water,and waste."

Sheron Tsui,General Manager of Soho House Hong Kong,a private members' club,says the Net Positive Pledge helps to realise their goal of cultivating local creative communities and explains,"At Soho House,we are committed to creating a club environment,working space and activities inspired by local cultures from around the globe. In addition to offering food and beverages,we also provide facilities such as wellness venues to promote the physical and mental health of our members. We share the same values as Net Positive Pledge. We are committed to using this opportunity to strengthen our contributions and make more positive impact."

First to offer property management fee incentive for tenants in Hong Kong

To encourage active participation,support tenants and their employees in achieving sustainability goals,and bring about more positive impact through the Pledge,Nan Fung has pioneered the first-ever management fee offer in Hong Kong as part of its incentive scheme. Tenants who fulfil specified sustainability tasks can also earn 'Net Positive Coins',which can be redeemed for special rewards,such as promotional packages in the 'NF Touch Membership Programme' for marketing exposure,and corporate sustainability training to build staff capacity.

Introducing a data sharing and analytics platform to foster execution of sustainable development strategies

Nan Fung has taken the lead in adopting a real-time digital system at AIRSIDE,leveraging 5G,IoT (Internet of Things),and building management technology,to accurately collect and measure real-time consumption of electricity,fuel,heating and cooling,and water,as well as waste generation and management data from tenants. AI technology and analytics monitor the environmental performance of leased premises,and data collected is shared with tenants in real time. Nan Fung will also conduct carbon audits for tenants and provide tailored proposals and assistance in formulating sustainable development strategies to help tenants attain their environmental goals based on audit results. The system will be gradually installed and implemented in other Nan Fung properties to continue optimising the environmental performance of the Group and its stakeholders.

Provision of social impact assessment for environmental and community projects to strengthen tenants' connections with their neighbourhoods

To enhance the positive impact of buildings and leased premises on surrounding areas,Nan Fung regularly conducts community research to better understand key issues and needs of the district,the findings of which are also shared with tenants. Nan Fung regularly provides tenants with opportunities to take part in a wide array of community projects,including art,culture,and community initiatives under the Nan Fung's 'In Time Of' initiative,in which Net Positive Pledge tenants enjoy priority access. For tenants who intend to organise community or social programs,Nan Fung will also assist in program planning,curation,and post-program social impact assessment. Nan Fung's emphasis on strengthening the social fabric demonstrates how sustainable development could be extended beyond the environmental aspect,ultimately promoting resilience through the synergetic fourfold cooperation between Nan Fung,and community partners.

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Notes to editor:

About Nan Fung Group

Nan Fung Development Limited is a subsidiary of Nan Fung Group,one of the largest privately held conglomerates in Hong Kong with global interests in real estate development and investment. It holds a well-diversified and substantial financial investment portfolio. The Group was founded in 1954 and has a track record spanning more than 50 years with over 165 projects including residential,commercial and industrial buildings. The Group also strategically focuses on first-tier cities in mainland China to identify attractive opportunities for development and investment overseas,including New York and London.

In recent years,the Group has expanded its investment focus to ICE (Innovation,Creativity and Entrepreneurship),exemplified by its signature project,The Mills,a revitalisation of its legacy yarn factories into a hub promoting techstyle (intersection of technology and style) and an integrated destination housing an experiential shopfloor,startup incubator,and cultural museum. The Group has also made significant progress in investments related to life sciences in the US via Pivotal; and in mainland China via an affiliate,New Frontier,which focuses on healthcare,elderly care,education,and new technology.

About In Time Of

"In Time Of" is a community initiative launched byNan Fung Group (the "Group") that engages society on multidisciplinary levels,ranging from cultural and creative industry to social design and sustainable development. Inspired by the global "Resilient Cities" concept that refers to cities with the resilience to absorb,recover from,and prepare for future shocks on economic,environmental,social,infrastructural,and institutional levels. The initiative aspires to empower the community to accumulate social capital in neighbourhoods,advocating sustainability and reshaping a continuous relationship that bridges humanity and nature.

Through "In Time Of",the Group partners with a diversity of social stakeholders including non-profit organisations,social enterprises and community designers to co-develop sustainable community programmes,including exhibitions,seminars,workshops,and guided tours,in the hope of creating a more resilient future for local neighbourhoods through social empowerment and efficient resource utilisation.