Developer Swire turns cautious on Hong Kong market
Swire Properties cut its interim dividend as it adopted a cautious approach to Hong Kong office and residential markets in the second half of the year.
The developer yesterday declared an interim dividend of 20 HK cents a share, slightly less than the 22 HK cents a year ago.
Chairman Christopher Pratt said: "We have a little concern that there may be weakness in the office portfolio in the second half. Indeed, we also concerned the sales of trading property in Hong Kong may slow."
The developer yesterday said its underlying profit, excluding property revaluation gain, surged 15.5 per cent to HK$2.81 billion in the first half of 2013 from a year ago.
The growth was due to profit from home sales and positive rental reversions from its investment property portfolio in Hong Kong and the mainland. Turnover rose 17.3 per cent to HK$5.75 billion in the first half.
Pratt said office demand in Hong Kong was likely to be affected by continued market weakness, particularly in Central. But office rents in Island East were expected to remain robust.
He said the company adopted a cautious approach as it factors in some future vacancies in its office portfolio.
In property sales, the Azura project in Mid-Levels West was the main contributor. The company planned to launch Mount Parker Residences in Quarry Bay in the second half.
Home sales for this year are expected to be less than those of a year ago as a result of the government's cooling measures.
Chief executive Martin Cubbon said: "Demand for high-end residential is weak. But it doesn't mean we can't sell the property. It takes a longer time to sell it. It's not a big deal."
Separately, Swire Pacific, the developer's parent, said its underlying profit grew 48 per cent to HK$3.3 billion in the first half, thanks to the growth in profits from the property, beverages and marine services divisions.
Net profit dropped 22 per cent to nearly HK$6.61 billion owing to a lower net investment property revaluation gain in the first half.
An interim dividend of HK$1 per A share and 20 HK cents per B share will be paid, no change from a year ago.