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Buoyant half for The Wharf Holdings

Shopping centre operator The Wharf Holdings has had a buoyant half-year, despite Hong Kong’s retail slowdown.
For the half-year to June 30, revenue exceeded HK$20 billion (US$2.578 billion) on 12 per cent growth, operating profit exceeded HK$8 billion (on 8 per cent growth) while group core profit increased year-on-year by 14 per cent to HK$5972 million.
Retail revenue from the group’s Hong Kong investment properties grew by 4 per cent to $3.108 billion, with occupancy rates maintained at virtually 100 per cent. Sales by tenant stores dropped by 14.7 per cent during the period to $13.3 billion, but began to stabilise in the second quarter.
The group says Harbour City is positioned to withstand the current market weakness, and has continued to freshen its tenant mix and run exclusive marketing events. New additions to the tenant mix include Aesop, Crumpler, Ferrari Junior, Fossil, Rado, ST Dupont and Weekend Max Mara.
New extension
New features have been introduced during the Ocean Terminal renovation, with a new extension overlooking Victoria Harbour offering diverse culinary outlets.
Conversion works at Gateway have been completed. China Tang made its Kowloon debut, and an Adidas flagship opened to capitalise on the emergence of “athleisure”. Meanwhile, the former cinema is being converted, and a new anchor, The Cheesecake Factory, is scheduled to open next year.
At Times Square, where a renovation was completed at the end of last year, revenue increased by 9 per cent to $1.435 billion and operating profit by 11 per cent to $1.303 billion. Retail revenue grew 10 per cent to $1.087 billion, with the occupancy rate maintained at 99 per cent.
Tenant sales dropped by 15.7 per cent to $3.9 billion, but started to stabilise in the second quarter. Tenant-mix enhancement initiatives were implemented, including the “Kids Square” plus the conversion of the ninth floor and part of the 10th floor into a lifestyle hub.
New tenants include Aldo, Celine, Dior, Jimmy Choo, Max Mara and Porter International. Contemporary eateries including Joe & The Juice from Denmark, and the debut of Selfie Cafe and Korean chain Mad for Garlic also opened.
At Plaza Hollywood, revenue edged up 3 per cent to $270 million and operating profit by 3 per cent to $212 million. The occupancy rate was 95 per cent at June 30. 
Crawford House performed steadily during the period, with its retail spaces – including Zara’s Hong Kong flagship – fully let.
Currency impact
The Wharf’s investment properties in China performed solidly although currency movements impacted returns. Revenue grew by 7 per cent to $1.197 billion and operating profit by 17 per cent to $689 million.
Occupancy rate at Chengdu International Finance Square remained at virtually 100 per cent, while its net revenue grew by 9 per cent to RMB312 million (US$46.9 million). Tenants’ sales increased by 13 per cent to RMB1.8 billion. New outlets include Kiehl’s, Love Moschino and Vera Wang.
Occupancy was also virtually 100 per cent at Shanghai Times Square, which has the largest Lane Crawford store in Mainland China.
Capitalising on the rising middle class in China, Chengdu Times Outlet continued to perform solidly, with a 19 per cent growth in unit sales during the period.
The group says it has a pipeline of developments “progressing at full speed”.

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