Hang Lung posts strong result
Hong Kong listed Chinese mall owner Hang Lung Group has reported a three per cent rise in turnover in the first half of 2015.
The group said revenue reached HK$4.893 billion, with rental turnover up eight per cent to HK$4.148 billion. Property sales income decreased 17 per cent to HK$745 million due to the sale of fewer residential units.
Overall operating profit of the group increased by three per cent to HK$3.725 billion.
In Mainland China the group says it has benefited from increased investment in the Chinese market by luxury brands.
“Our seven shopping malls in mainland China collectively posted an 11 per cent rental income growth to HK$1.684 billion,” the company said in its stock exchange filing.
That portfolio comprises two malls each in Shanghai and Shenyang, and one each in Jinan, Wuxi and Tianjin. The two malls in Shanghai, Plaza 66 and Grand Gateway 66, contributed nine per cent more in rents to HK$1.059 billion and were almost fully let.
“The young malls outside Shanghai cumulatively contributed 16 per cent more in rents year-on-year mainly attributable to contribution from the Riverside 66 shopping mall in Tianjin which commenced operation last September. All the young malls are going through different stages of gestation period with ongoing tenants or trade adjustments. Their occupancy rates ranged from 80 per cent to 90 per cent.”
In Hong Kong, rental turnover of our diversified Hong Kong leasing portfolio rose seven per cent to HK$1.816 billion against the backdrop of declining overall retail sales in the local market.
“All business segments of our portfolio recorded growth with total profit rose seven per cent to HK$1.556 billion. The resulting leasing margin was 86 per cent.”
Positive rental reversions of Hang Lung’s Hong Kong commercial portfolio generated six per cent more in rents to HK$1.040 billion.
“All the malls, which are situated in prime locations of Hong Kong, were virtually fully let. Grand Plaza in Mongkok and Amoy Plaza in Kowloon East both enjoyed a 13 per cent rental growth. The Causeway Bay commercial portfolio posted a five per cent rental income growth, despite Hang Lung Centre has been closed for renovation by H&M since January 2015.
“The properties in Central collected seven per cent more in rents. The Peak Galleria at the
Peak contributed extra five per cent leasing income to the Group. Kornhill Plaza, our regional mall in Hong Kong East, posted a stable rental growth of four per cent during the period.”
Hang Lung said final preparations are underway for the opening of its shopping mall at Olympia 66 in Dalian towards the end of the year. This new mall comprises almost 222,000 sqm of retail area and 1200 car parks.