Hysan cautious on Hong Kong’s retail, office markets after posting 8.6 per cent drop in profit for 2022
- Hysan Development’s underlying profit fell 8.6 per cent to US$271.4 million in 2022
- Hong Kong’s retail sector is yet to see full impact of the border reopening, while a supply glut will weigh on the office market, the company’s executives say
The market has become optimistic following the reopening of the border with the mainland, but the increased footfall has not resulted in sales rebounding to pre-social unrest levels, Hysan chairman Irene Lee said at a post-results briefing on Friday.
Hysan’s underlying profit fell 8.6 per cent to HK$2.13 billion (US$271.4 million) in 2022, according to a filing to the Hong Kong stock exchange. The company said it would pay an unchanged second interim dividend of 117 HK cents per share.
“That is because first, the footfall is not as high as before. Second, consumption mode and desires might have adjusted,” Lee said. “My feeling is that the view can be more certain midyear.”
A large amount of new office supply is weighing on Hong Kong’s office market. Last year, more than 4 million sq ft of grade A space came on to the market, pushing the vacancy rate to 14.7 per cent, the highest since 2008, Colliers said in a report last month. This year, the property consultancy expects another 3.2 million sq ft to be available.
“With the uncertainty of the overall world economy, rising interest rates, and the Covid-19 situation, it has brought some pressure on the office [market],” said Ricky Lui, Hysan’s chief operating officer. “At the same time, there will be some more new supply in the market, so the office [market] will be facing some challenges this year.”