Hongkong Land looks to expansion beyond Central
Landlord mulls expansion from main business district as it posts core profit gain of 11 per cent
Hongkong Land, the largest landlord in Central, will look into opportunities to expand to areas stretching from Sheung Wan to Causeway Bay, its chief executive said yesterday.
"If you look at the north shore of Hong Kong Island - all the way from here [Central] to Causeway Bay - I think it's a continuation of Hong Kong's business district," Pang Yiu-kai said. "Eventually, the business district will also stretch towards the Sheung Wan area, so there is certainly the possibility for companies such as Hongkong Land extending their operations where there are good rents and international players want to base their businesses.
"And I think the north shore of Hong Kong from Sheung Wan to Causeway Bay is probably one such area."
Pang made the comment as the developer announced its underlying profit for last year rose 11 per cent to US$777 million.
However, including net gains of US$662 million from higher valuations of its investment properties, net profit of US$1.44 billion was down 73 per cent because of higher net revaluation gains of US$4.6 billion in 2011.
Net debt rose 39 per cent to US$3.27 billion.
The average rent for the company's commercial properties in Central rose to HK$90.30 per square foot from HK$87 in 2011, despite weaker leasing demand in the central business district's office market.
The vacancy rate grew to 3.4 per cent from 2 per cent, but the company said it was still better than the overall rate of about 4.5 per cent for the grade A Central market.
"While office leasing demand remains subdued, the group's Hong Kong portfolio will continue to benefit in 2013 from limited new supply as well as strong demand for luxury retail space," chairman Simon Keswick said.
Keswick said three residential projects were due for completion in Singapore, including the Marina Bay Suites development.
Hongkong Land has about 450,000 square metres of grade A office and luxury retail space in Central, plus residential and commercial property projects in mainland China and Southeast Asia, including Singapore, Indonesia and Cambodia.
The company recommended a final dividend of 11 US cents per share, up 10 per cent, with a total dividend for the year of 17 US cents per share.