Retail in Asia


Hong Kong developer Sun Hung Kai Properties reports pipeline projects amid decline in earnings

Hong Kong-based real estate giant, Sun Hung Kai Properties (SHKP), disclosed its financial results for the fiscal year, revealing a decline in earnings compared to the previous year. The company’s earnings amounted to HKD23.88 billion (USD3.04 billion), showing a decrease from HKD28.72 billion (USD3.66 billion) recorded in the prior year.

SEE ALSO: Hong Kong retail trends: Vacancy rates drop on boosted presence from F&B, prestige beauty, and jewellery

The primary factor contributing to the decline in earnings was a notable reduction in profit generated from property sales. Despite the setback, SHKP maintained stability through substantial recurring profit derived from its rental portfolio and non-property businesses.

The company’s diversified portfolio, including its rental properties and non-property ventures, has helped to offset the decline in profits.

In Hong Kong, SHKP has added three commercial sites to its land bank, offering a combined gross floor area of approximately 2.3 million square feet. Notably, one of the acquisitions includes a commercial site located in the bustling district of Mong Kok, envisioned to become a comprehensive commercial complex encompassing around 1.5 million square feet. Upon completion, projected for 2030, the complex will host the second tallest building in Kowloon. With the addition of these three acquisitions, SHKP expands its commercial footprint in the area to approximately three million square feet.

With a diverse portfolio of shopping malls strategically situated along major railway lines, SHKP possesses 12.2 million square feet of retail space in Hong Kong. Source: Shutterstock

SHKP’s malls experienced increased footfall and tenant sales after the border reopening and lifting of social-distancing measures. Average occupancy remained at a healthy 95 percent, and SHKP expanded its customer base through a cross-boundary reward scheme and leveraged its The Point loyalty programme to drive spending growth.

Its newly rebranded WWWTC mall, located beneath the World Trade Centre in Causeway Bay, has quickly emerged as a prominent destination.

Since its phased openings in early 2023, the mall has successfully attracted luxury brands and popular restaurants. Several other SHKP malls including Tsuen Wan Plaza have undergone outdoor space refurbishments to accommodate a greater variety of amusement facilities and outdoor activities.

Yoho Mall in Hong Kong’s New Territories. Source: Shutterstock

YOHO Mall in Yuen Long will expand by 107,000 square feet with the opening of YOHO MIX in the first half of 2024. This extension will solidify YOHO Mall’s position as the largest shopping and entertainment destination in the northwest New Territories. Additionally, a new shopping mall of approximately 500,000 square feet will be situated beneath The Millennity in Kwun Tong, generating synergy with the Group’s APM mall in the area.

IFC, with its prime Central location and excellent amenities, retained its status as the preferred office address for international financial institutions and mainland corporations, maintaining near-full occupancy. ICC also maintained a satisfactory occupancy level.

In a statement publishing SHKP’s annual results, SHKP chairman Raymond Kwok expressed optimism in Hong Kong’s future prospects under the ‘one country, two systems’ approach, boosted by the Belt & Road Initiative and the development of the Greater Bay Area.

Shanghai IFC Mall. Source: Shutterstock

Meanwhile in mainland China, SHKP said it would continue to prioritise prime locations in first-tier and prominent second-tier cities on the mainland, amid a challenging economic landscape.

Its property portfolio on the mainland consists of large-scale integrated projects strategically located with excellent connectivity.

Its retail portfolio, positioned in prime locations across major mainland cities, stands out with distinct market positioning. In the first half of 2023, Shanghai IFC Mall in Pudong showcased its luxury positioning and exceptional shopper experience, leading to a rebound in tenant sales. Other premium malls in the Group’s portfolio also performed well throughout the year, according to SHKP.

SEE ALSO: Brick-and-mortar back in a big way in Hong Kong: Chanel, De Beers, Van Cleef and more unveil new locations

SHKP has also refined its trade and tenant mix and conducted asset enhancement projects to enhance the portfolio’s attractiveness on the mainland.

Parc Central, their joint-venture mall in Guangzhou, recently opened a pedestrian subway connecting it to a metro station. Nanjing IFC Mall underwent a facelift with a new facade. The upper zone, housing restaurants and cafes, has opened, with the remaining portion set to commence operations in late 2023.

SHKP’s mainland presence will expand as its major developments near completion. In Shanghai, the construction of Three ITC, including a 370-metre Tower B, flagship mega mall, and Andaz Shanghai ITC hotel, is progressing. Tower B will become one of Puxi’s tallest buildings, offering green workspace by late 2024. The mega mall, ITC Maison, will feature renowned global brands and luxury and leisure attractions upon its phased opening from 2025 onwards.