Hysan Development, the largest landlord in Causeway Bay, yesterday posted a 4.1 per cent rise in earnings from its core business, helped by an improvement in rental income. Recurring underlying profit, excluding property revaluation gains and one-off items, rose to HK$1.11 billion in 2009 from HK$1.07 billion the previous year, in line with market expectations. The growth was due to a 3.8 per cent rise in office rental income and a 3.5 per cent increase in retail rental income. The landlord generated total revenue of HK$747 million from office properties, compared with HK$720 million in 2008. Hysan enjoyed a positive rental reversion generally. But the company experienced negative rental reversion in some leasing transactions towards the end of last year. An analyst said the company was still facing negative rental reversions, in which leases are renewed at lower rentals, because the existing average office rent in Causeway Bay was still about 11 per cent lower than three years ago. 'The future performance of the rental business depends on how quickly they rebound,' he said. The company was trying to increase rental income and offset the impact of the lower reversions by improving occupancy rates. Although the occupancy rate of its office properties had dropped to 91 per cent at the end of last year from 98 per cent a year ago, executive director Wendy Yung yesterday said the rate had recovered to 93 per cent recently. Sun Hung Kai Financial has taken up 100,000 square feet of office space at Manulife Plaza of The Lee Gardens in Causeway Bay which would be vacated by Manulife this year. Yung expects office rents to rise 5 to 10 per cent this year. Hysan's revenue from retail properties surged to HK$648 million, while the retail space was virtually fully let and rents remained stable. Net profit, including the property revaluation gain of HK$1.25 billion, jumped 70.4 per cent to HK$2.72 billion. The company declared a final dividend of 54 HK cents per share, unchanged from last year. The company yesterday announced that it had appointed Gerry Lui Fai-yim, currently executive director, as chief executive. Shares in Hysan rose 0.67 per cent to close at HK$22.40 yesterday.