Rental income of the former Citibank Plaza has soared 22.2 per cent since the mall was rebranded Three Garden Road.
Parent Champion Real Estate Investment Trust , which also owns Langham Place, says the occupancy rate of Three Garden Road rose from 91.2 per cent at the end of December, to 95.1 per cent at the end of June. The rebranding took effect on June 28. Rental income for the half year was HK$567 million.
“The latest achieved rents have stood above $100 per sqft (based on lettable area), markedly higher than the existing passing rent at $76.59 per sqft,” the company said in a statement.
Rental income of the Langham Place Mall recorded a more moderate increase of 3.2 per cent to $397 million in the first half and the growth in base rent portion has compensated the decline in turnover rent.
“The retail market has entered a trough period despite that positive rental reversion in base rents has continued,” said Champion. “While the mall was affected by the downward trend as tenants’ sales dropped 6.4 per cent in the first six months of the year, the mall still outperformed the market.”
For the first half of 2016, Champion REIT recorded solid growth in rental income and distribution per unit by 12.2 per cent and 14.9 per cent year-on-year respectively.
Champion said it expected the “harvesting stage” of Three Garden Road to continue in the second half of 2016 as major leases committed in 2015 will have a full-year impact this year.
“The base rent of Langham Place Mall should maintain a slight growth in 2016. The outlook for next year may be at risk given the uncertainties in retail market and the general economy. To keep up the attractiveness of the mall, a number of marketing campaigns will be rolled out and new tenants will be introduced, such as the first Lego Store in Hong Kong.”