Sun Hung Kai Properties foresees constrained demand amid rising rates and Covid-19 disruptions, as profit declines
- Hong Kong’s largest property developer by market capitalisation reported a 3.8 per cent drop in underlying profit for the year ended in June
- Amid the ‘fluctuating pandemic situation’, the company said it will speed up sales to increase cash flow
Sun Hung Kai Properties (SHKP), Hong Kong’s biggest developer by market capitalisation, issued a cautious outlook amid rising interest rates and pandemic disruptions as it reported a drop in profit for the 12 months ending in June.
Overall demand will be constrained by factors such as rising interest rates despite solid end-user demand and eased mortgage financing introduced in early 2022, Raymond Kwok Ping-luen, SHKP’s chairman and managing director, said in an exchange filing on Thursday.
“Lingering effects and disruptions from the pandemic may continue to cloud leasing markets”, while the company’s property investment business is likely to improve gradually, Kwok said.
Hong Kong’s largest property developer by market capitalisation reported that underlying profit, which excluded the effect of fair value changes on investment properties, fell 3.8 per cent to HK$28.73 billion (US$3.7 billion) year over year.
The “fluctuating pandemic situation” in Hong Kong and mainland China continued to affect business, the developer said in a separate statement on Thursday, adding it “will speed up the sales of its projects to increase cash flow”.
Since July, the company has recorded sales of over HK$12 billion, the statement said. Launched two months ago, Novo Land in Tuen Mun has sold more than 1,500 units, with proceeds exceeding HK$9.4 billion.