Commercial landlord Hysan Development reports a 4.2 per cent increase in underlying profit for its first half despite its retail portfolio turnover subsiding.
Underlying profit, which excludes revaluation gains on investment properties, came to HK$1.227 billion (US$160 million).
With 4.1 million sqft (380,900 sqm) of retail, office and residential investment properties in Hong Kong, the developer says turnover stood at $1.79 billion, up 1.8 per cent from a year ago.
However, there was a 0.1 per cent dip to $985 million in turnover for its retail portfolio, which includes its flagship Hysan Place, Lee Gardens and Lee Theatre in Causeway Bay.This was despite occupancy levels of 99 per cent.
Hysan says the portfolio is going through a process of “tenant mix adjustment”, with rental income from renewals and new lettings decreasing overall. There was also a drop in total foot traffic of about 5 per cent.
However, the developer says it is planning to spruce up its retail properties.
“Retail is most affected by the structural adjustments generated by e-commerce and the
corresponding changes in consumer behaviour,” says chairperson Irene Yun Lien Lee. “We continue to adapt and position our portfolio to address the changing market.
“While online browsing and buying may have advantages in terms of efficiency, we aim to give our shoppers and visitors much more than simple convenience in ways that cannot be replicated online.”
She says the group takes an integrated approach, collaborating with tenants and other stakeholders to host activities and events, expanding its loyalty programs and extensively using technology in promotions and contact with customers.
Meanwhile, Hysan’s reported profit for the six months stood at $746 million, down 17 per cent because of fair-value loss on investment properties of $775 million, compared with $280 million last year.
As at the end of June, the independent professional valuation of the group’s investment property portfolio was $69,628 million, compared with $69,633 million at the end of last year.