Swire Properties’ 2016 core profit edges up 1pc to HK$7.11bn, missing analysts’ estimates
Net profit rises 7 per cent to HK$15.05bn, while revenue rises 2 per cent to HK$16.8bn
Swire Properties, one of Hong Kong’s oldest and largest builders of luxury homes and grade-A offices,
says it will still bid competitively for development sites put on sale in the city by government tender, “if something suit us”.
Chief executive Guy Bradley said the firm’s appetite for land in Hong Kong remain strong despite mainland developers’ bidding having escalated prices in recent months.
“Hong Kong is a competitive market, and we are used to it,” he said.
Although the US Federal Reserve raised the base lending rate by a quarter point overnight on Wednesday, he said it was too early to say the impact on the Hong Kong property market.
“Market sentiment is positive this week,” he said.
His remark comes ahead of three new projects that have attracted more than 20,000 prospective buyers for the sale of about 1,000 units put on sale on Friday and Saturday, the strongest initial responses since November last year.
They are Wheelock Properties’ Monterey development in Tsung Kwan O, Cheung Kong Property Seanorama development in Ma On Shan, and Sun Hung Kai Properties’ Cullinan West atop Nam Cheong Station.
Bradley was speaking as Swire Properties reported its net profit rose 7 per cent to HK$15.05 billion, while revenue rose 2 per cent to HK$16.8 billion.
Underlying profit, a measure that excludes revaluation gains in investment properties, edged up 1 per cent to HK$7.11 billion, missing the HK$7.29 billion expected in a Bloomberg survey of 14 analysts.
“There was a marginal increase in core profit last year, as there was a small decrease in underlying profit from property investment and a small increase in core earnings in property trading,” said chairman John Slosar in a statement.
The slight increase in gross rental income to HK$10.77 billion last year, up 0.53 per cent from 2015, was partly due to the fall in retail rents in Hong Kong.
But its office rental rose slightly to HK$6.05 billion last year, compared with HK$5.97 billion in 2015.
The group owns 22.1 million sq ft of completed investment properties including Pacific Place in Admiralty, Hong Kong and Taikoo Li Sanlitun in Beijing.
“The Hong Kong retail market shows early signs of improvement,” added Bradley.
In China, he expects the firm would to have its second property project in Shanghai after signing a framework agreement with Shanghai Newbund Industrial Development to jointly develop a retail project in Qiantan, Pudong. The project will have a total gross floor area of 1.33 million square feet.
At the parent company Swire Pacific, its 2016 net profit fell 28 per cent to HK$9.64 billion, weighed down by the HK$575 million loss reported by its aviation unit Cathay Pacific Airways Ltd. Swire Pacific’s underlying profit plunged 69 per cent to HK$3.06 billion.
Swire Properties declared a final dividend of 48 HK cents per share, unchanged from the previous year, while Swire Pacific will pay a final dividend of HK$2.1 per A-share and 42 HK cents per B-share.
● Separately, Poly Property Group released the price list for the first batch of 188 units at Vibe Centro development in Kai Tak at an average of HK$19,808 per sq ft, an 18 per cent discount.
The cheapest unit covers 228 sq ft unit cost and will cost as low as HK$3.88 million.