Swire keeps faith in rental growth in China
HK commercial landlord plans more projects across the border as retail sector remains strong
Rental growth of Swire Properties' mainland portfolio will remain strong on the back of consumers' appetite despite a slowing economy, said its mainland chief executive, noting that the Hong Kong-based commercial landlord is seeking to add more new projects.
"Everywhere has softened a bit this year in terms of retail sales, but the fundamentals of China's retail [sector] are still very strong," Guy Bradley said.
Speaking at a media gathering in the Opposite House hotel in Taikoo Li Sanlitun, Swire Properties' integrated commercial development formerly known as Sanlitun Village in Beijing's Chaoyang district, Bradley said people still wanted to come and shop.
"We won't be too worried as the mix of our tenants is catered for real demand," he said.
The World Bank last week slashed its economic growth forecast for China to 7.5 per cent from 8.3 per cent previously.
Swire Properties, which operates Guangzhou's retail-office-hotel project Taikoo Hui as well as Beijing's Indigo and Taikoo Li Sanlitun, posted a 20.2 per cent increase in gross rental income in the first half of this year from a year earlier to HK$784 million.
Bradley said he was confident that the strength in the retail sector on the mainland would continue, fostering the growth momentum in the company's rental income.
The contribution of the mainland's rental income to Swire Properties had been on the rise, tracking the growth in its portfolio there, he said.
With the Daci Temple mixed-use project in Chengdu to be completed in the middle of next year and the Dazhongli project in Shanghai's Nanjing West Road scheduled to open in 2016, the firm's mainland developments will account for one-third of its investment portfolio.
The Daci Temple project, with a total investment of 7 billion yuan (HK$8.8 billion) to 8 billion yuan, includes retail, hotel, office and serviced-apartment developments.
Bradley said 70 per cent of the retail area had been rented out to tenants such as luxury brands Gucci and Cartier.
The contribution of rental income from the mainland, which accounted for 16 per cent of the company's gross rental income in the first half, would continue to increase, he said.
Video: Swire Properties seeks new development in China