Sun Hung Kai Properties banks on more reversal of Covid-19 containment measures to revive retail, hotel businesses

Name: Hong Kong’s tough quarantine and travel restrictions
Uploaded: 2020-09-10T11:05:09.000Z
Duration: 2 min 49 s
Description: Hong Kong’s tough quarantine and travel restrictions

Developer recorded a 47.6 per cent plunge in earnings to HK$23.5 billion in the year ended June 30, including steep losses in hotel operations

The easing is crucial to the performance of property sales, rental income and hotels, chairman and managing director Raymond Kwok says

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Potential buyers queue for Sun Hung Kai Properties' Wetland Seasons Park residential project. Hong Kong’s property transactions slumped by a quarter in the first six months of 2020 due to pandemic-related restrictions. Photo: May Tse

Lam Ka-sing

Published: 7:05pm, 10 Sep 2020Updated: 10:52pm, 10 Sep 2020

Sun Hung Kai Properties, Hong Kong’s biggest developer by market value, is banking on easier Covid-19 containment measures to help revive its stricken retail and hotel businesses and pull the city’s economy out of recession.

The group has suffered this year because of restrictions in movements, and its earnings outlook remain uncertain in the medium term, chairman and managing director Raymond Kwok Ping-luen said. Its recovery will depend on the state of pandemic and measures to reopen cross-border travels, he added.

The easing is “crucial to the performance of property sales, rental income and hotels,” he said in an exchange filing on Thursday, along with the group’s full-year earnings report. “The group’s hotel business has been hit hardest by the outbreak,” according to the filing.

Hong Kong’s economy contracted by 9 per cent last quarter as the viral outbreak and social unrest combined to plunge the city into its worst slump on record since the middle of last year. Efforts to contain the third wave of outbreak have been a case of hits and misses as Covid-19 cases fluctuate.

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Hong Kong’s tough quarantine and travel restrictions

Still, the Hong Kong government has taken steps in recent weeks to ease some of the Covid-19 restrictions, including relaxing social-distancing rules, reopening gyms and museums and considering opening up travel to and from countries such as Japan, Thailand and Germany.

Citywide property transactions slumped by a quarter to 32,749 in the first half of this year from a year earlier, according to Midland Realty. Average hotel occupancy fell to 49 per cent in July from 86 per cent a year earlier, according to the Hong Kong Tourism Board.

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