Hong Kong developers Swire and Wharf report profit growth amid valuation pressure

Swire Properties reported stronger underlying earnings in 2025, as the Hong Kong developer stepped up asset disposals and expanded its mainland China retail portfolio, though weakness in the city’s office market dragged the company into a headline loss. Underlying profit rose 27 per cent to HK$8.62 billion (US$1.1 billion), driven largely by gains from the disposal of noncore assets including the Brickell City Centre retail mall in Miami and several properties in Hong Kong, according to the company’s full-year results released on Thursday. Revenue increased 11 per cent to HK$16.04 billion, while recurring underlying profit – a key measure of rental income – slipped 3 per cent to HK$6.26 billion amid softer office rents in Hong Kong. CEO Tim Blackburn said 2025 remained “another challenging year for our industry”. The developer booked HK$7.72 billion in fair-value losses on investment properties during the year – equivalent to roughly 90 per cent of its underlying earnings – contributing to a reported net loss of HK$1.53 billion. The change in property valuations was non-cash in nature and did not affect operating cash flow. Rental income from Hong Kong offices fell 4 per cent year on year to HK$4.89 billion. Blackburn warned the city’s office market remained under pressure as companies continued to cut costs and delay leasing decisions, although some signs of stabilisation emerged late in the year. The company raised its second interim dividend by 5 per cent to HK$0.80, bringing the full-year payout to HK$1.15. The property writedowns also weighed on parent company Swire Pacific, which reported profit attributable to shareholders of HK$2.94 billion for 2025, down 32 per cent from a year earlier after booking HK$6.07 billion in investment property revaluation losses. Underlying profit at the conglomerate rose to HK$11.37 billion, while recurring underlying profit increased 5 per cent to HK$9.75 billion, reflecting stable performance across several divisions. On the mainland, Swire Properties reported mixed conditions across its commercial portfolio. Office demand in mainland China remained cautious, though occupancy stayed high. Taikoo Hui in Guangzhou and One Indigo in Beijing both maintained office occupancy of about 90 per cent at the end of 2025. Retail performed more strongly. At HKRI Taikoo Hui in Shanghai, retail sales rose 50 per cent year on year, supported by new flagship stores and stronger foot traffic. Results from Wharf (Holdings) also underscored valuation pressure across the property sector, though writedowns narrowed from a year earlier. The conglomerate reported a HK$50 million profit in 2025, reversing a HK$3.22 billion loss a year earlier after smaller property revaluation deficits. Underlying net profit rose to HK$4.10 billion from HK$2.80 billion, mainly as impairment provisions on mainland development properties fell sharply. Revenue fell 9.2 per cent to HK$10.99 billion. Even so, the group still booked a HK$3.64 billion investment property revaluation deficit, leaving headline earnings subdued. In Hong Kong, Wharf said the luxury residential market showed early signs of recovery, with high-end transactions at projects such as Mount Nicholson reflecting improving sentiment. On the mainland, the property market remained weak, weighed down by excess housing inventory and subdued consumer sentiment. The group’s logistics operations also faced headwinds from shifting global trade patterns. Wharf said volatile Sino-US trade relations, shifting geopolitics and the realignment of major shipping alliances continued to weigh on Hong Kong’s port volumes. While container traffic at its Hong Kong terminal declined, throughput at its mainland operations proved more resilient. Overall, the logistics segment recorded weaker revenue and profit during the year. Looking ahead, Wharf warned that geopolitical tensions and global trade uncertainties could continue to disrupt markets. “2026 opened with an even bigger disruptive bang,” the company said in its results statement, citing conflicts in Ukraine and the Middle East among the factors clouding the outlook. “Facing ongoing uncertainties, the group will leverage its core strength and sound financial management to navigate through headwinds while sustaining stable performance,” the statement said.

Hong Kong developers Swire and Wharf report profit growth amid valuation pressure

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Swire’s underlying profit rose on asset disposals, while falling property valuations weighed on results at both Swire and Wharf

Swire’s underlying profit rose on asset disposals, while falling property valuations weighed on results at both Swire and Wharf