Wharf

Sales at Hong Kong’s Harbour City, Times Square malls fell 12 per cent in January, worse than city’s overall sales decline of 6.5 per cent

Wharf reported its core profit rose 5 per cent to HK$10.96 billion last year, mainly due to growth in rental income and property sales

PUBLISHED : Wednesday, 09 March, 2016, 2:54pm
UPDATED : Wednesday, 09 March, 2016, 8:09pm

Hong Kong conglomerate Wharf has revealed that retail sales at two of its major malls, Harbour City in Tsim Sha Tsui and Times Square in Causeway Bay, fell 12 per cent last year over the year before, but said it did not feel any pressure to cut rents.

Vice chair Doreen Lee Yuk-fong attributed the fall to the fact that 20 per cent of the combined gross floor area of the malls is leased to luxury retailers, one of the worst performing sectors. Sales have continued to fall this year, with a month on month 12 per cent decline in January, she said.

Retail sales in Hong Kong overall dropped 6.5 per cent in January, according to government figures.

“Although there were declines in sales of big-ticket items in a weakening retail market, our tenants at Harbour City still ranked their shops there as their top ones worldwide,” she said.

The decline in Times Square in Causeway Bay was partly because of renovation that temporarily disrupted certain areas in the mall.

She said there are still many brands who want to open stores in Hong Kong, which would ease downward pressure on rents at the group’s malls.

Chairman and managing director Stephen Ng Tin-ho said Wharf has begun to scale down its residential property investment in the mainland as it was unable to find appropriate opportunities.

“We plan to reduce our property investments to 10 cities from previous 15 cities,” he said.

He said the firm would exit Chongqing and Changzhou, where it has substantial land or projects under development, but would maintain its exposure in Shanghai, Beijing, Suzhou and Hangzhou.

Wharf has cut its property sales target in the mainland by 8 per cent to 24 billion yuan for this year, from 26 billion yuan in 2015.

Our tenants at Harbour City still ranked their shops there as their top ones worldwide
Doreen Lee Yuk-fong, Wharf vice chair

“This year’s sales target is based on the number of projects that are ready for launching,” he said.

Wharf reported its core profit rose 5 per cent to HK$10.96 billion last year, mainly due to growth in rental income and property sales.

Net profit, however, plunged 55 per cent to HK$16.02 billion due to smaller revaluation gains on investment properties.

The company’s gross rental income rose 8 per cent to HK$14.47 billion last year while property sales jumped 16 per cent to HK$18.01 billion.

Wharf will pay a final dividend of HK$1.35 per share, up 7 per cent from the previous year.

Shares in Wharf rose 0.5 per cent to close at HK$43.5 yesterday.