Hongkong Land reports 1H19 net profit fell 63 percent on revaluations

Hong Kong currency notesHong Kong currency notes

Hongkong Land reported Thursday first half net profit fell 63 percent on-year to US$411 million, due to a US$55 million net loss mainly on the revaluation of investment properties and year-ago net gains of US$669 million on property revaluations.

Underlying net profit for the six months ended 30 June rose 2 percent on-year to US$466 million, the property developer said in a filing to SGX.

Hongkong Land declared an interim dividend of 6 U.S. cents a share, unchanged on-year.

For the investment properties division, rental reversions were positive in the Hong Kong office portfolio as market supply remained tight even though leasing enquiries were slow, the company said.

The group’s Central office vacancy was 2.8 percent at end-June, but including new lease commitments, it was 1.6 percent, Hongkong Land said.

The average office rent rose to HK$116 a square foot in the first half of this year from HK$111 in the first half of 2018 and HK$114 in the second half of last year, the filing said.

The Central retail portfolio was effectively fully occupied with positive base rent reversions, the filing said. Average retail rent rose to HK$239 a square foot in the period, from HK$231 and HK$236 in the first and second halves of 2018, respectively, the filing said.

In Singapore, Hongkong Land’s office portfolio had a vacancy rate of 3.3 percent at end-June, up from 2.5 percent at end-2018, but on a committed basis, the vacancy rate was 0.9 percent, the filing said. Rental reversions were positive, with average office rent rising to S$9.60 a square foot in the period, compared with S$9.10 and S$9.20 in the first and second halves of 2018, respectively.

For the development properties, mainland China’s contribution rose on higher sales completions, and market sentiment in the core markets remained stable, Hongkong Land said.

Read more about Hongkong Land’s earnings.

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