Hong Kong’s retail sector to rebound with coronavirus vaccine, says New World Development

Retail sales likely to surge by double digits in the second half of the year, New World’s chief executive predicts

The imminent roll-out of vaccines and a HK$5,000 electronic consumption voucher for residents in the budget will help boost local consumption, said Adrian Cheng

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Times Square, Causeway Bay, one of Hong Kong’s most popular shopping zones. Photo: Robert Ng

Published: 7:30am, 27 Feb 2021Updated: 7:50am, 27 Feb 2021

The worst is over for Hong Kong’s retail sector, with sales likely to surge by double digits in the second half of the year, according to New World Development, which has a much more bullish view about the market than its fellow developers.

The imminent roll-out of Covid-19 vaccines and a HK$5,000 (US$644.58) electronic consumption voucher for residents revealed in the budget on Wednesday will help boost local consumption, said Adrian Cheng, executive vice-chairman and chief executive of New World, at a briefing on Friday evening.

“I believe the worst is behind us. I am very optimistic that Hong Kong’s economy will recover gradually as more and more Hong Kong residents are vaccinated,” Cheng said. “I believe that the local retail market will continue to improve and overall sales, for the second half, will grow by a double-digit percentage this year.”

Compared with the first half of 2020 when the coronavirus outbreak began, New World saw a rebound in the second half, with underlying profit up by 40 per cent, he said.

The company’s property sales in Hong Kong surged to HK$26.3 billion (US$3.4 billion) as of December 31, from HK$3 billion (US$387 million) in the same period last year, defying a sharp increase in the unemployment rate, according to interim results filed to the Hong Kong stock exchange on Friday.

Pavilia Farm in Tai Wai, its bestselling project, received the most subscriptions in Hong Kong since 1997. More than 2,100 units were sold, fetching nearly HK$23.8 billion.

New World’s underlying profit, which excludes changes in the valuation of properties, fell 5.4 per cent from a year ago to HK$3.72 billion.