Wharf chases volume to hit sales goal
Property conglomerate Wharf will seek to meet a 10 per cent higher sales target in a softer mainland market by pursuing sales volume rather than holding out for high selling prices.
The company revealed the rise in this year's sales target to 23 billion yuan (HK$29 billion) after reporting underlying profit grew 2 per cent to HK$11.29 billion last year.
Turnover rose 3 per cent to HK$31.88 billion, compared with HK$30.85 billion in 2012.
Wharf proposed an unchanged final dividend of HK$1.20 per share.
"In a policy-driven market like [the mainland], it is hard to resist if the central government wants to see property prices fall. We will not sit tight and hold our projects amid a falling market," said Stephen Ng Tin-hoi, the company's deputy chairman and managing director.
Ng said the firm would focus on selling more properties as a higher cash return on assets would help to offset a fall in margins. It made contracted sales of 20.9 billion yuan last year, up 39 per cent from 2012.
In response to media reports that Wharf had offered discounts at mainland projects, Ng said: "Prices for remaining unsold units in a project will be different from those that had been sold in the first launch. Basically, the fast growth in home prices we have seen in the past may not repeat itself this year. Individual projects in some cities may be forced to sell at a cut price."
Wharf has achieved property sales of 2 billion yuan in the first two months of this year.
Amid a decline in spending on luxury products by mainland shoppers in Hong Kong, Ng said the firm would look to attract visitors from neighbouring countries to its shopping centres.
"But these emerging markets from Southeast Asia are still small," he said.
In Hong Kong, retail revenue from its three malls - Harbour City, Times Square and Plaza Hollywood - grew 15 per cent to HK$46 billion last year. In Harbour City, tenants generated average sales of more than HK$4,210 per square foot in December, a record high, the company said.
Including the HK$17.2 billion revaluation gains on investment properties and other items, profit attributable to equity shareholders last year was HK$29.38 billion, down 37.83 per cent from a year ago.
Wharf shares rose 2.98 per cent to close at HK$50.05 after the results announcement.