Mall owner Hysan Development has boosted turnover by 9.1 per cent to HK$2.086 billion on the back of its newest development, Lee Garden Three contributing its first full accounting period.
Underlying profit for the group for the first half year was up by 8.9 per cent to $1.394 billion
While other retail property companies have been reporting muted results for the first half, citing the China-US trade war, a slowing mainland economy and, more recently, extradition bill protests in Hong Kong, Hysan has the advantage of a significant development coming on tap when comparing year-on-year performance.
Hysan Chairman Irene Lee says both office and retail rental reversions and occupancies were robust, while its residential portfolio also saw satisfactory improvement.
“Our estimated retail tenant sales growth of around 4 per cent fared better than Hong
Kong’s general retail sales which declined 2.6 per cent, against a backdrop of headwinds from economic and socio-political factors, as well as weaker domestic demand,” she said in a results announcement.
Retail accounts for about 50 per cent of the property group’s business.
Lee says the repositioning of its retail focus has borne fruit. “We have introduced a wide range of food and beverage establishments with drinking elements, more lifestyle retail geared towards home decor, high-end appliances, beauty and pampering, wellness and health. We have strengthened our children’s offering beyond fashion. Our office tenants with young
families are interested in children’s lifestyle items such as “to dream for” children’s furniture and more choices in family friendly restaurants.”
Consumers who visit Lee Garden malls, located on tree-lined streets in the heart of Causeway Bay, can experience something quite different from traditional Hong Kong shopping malls.
“Those who visit this area of contrast and diversity can enjoy many exclusive experiences, ranging from a “new economy” recycling fashion house, and a private library, to a traditional knitting wool specialist and a renowned Shanghainese crab outlet. Every corner of the streets of Lee Gardens area has a new discovery for modern travellers and curious locals.”
The company issued a table showing new retail tenants opening in its properties during the half year, illustrating its tenant diversity:
However Hysan is under no illusion it faces a tough period ahead.
“Hong Kong’s economy is expected to face increasing uncertainties in the second half of this year. A global economic slowdown and the Sino-US trade disputes are likely to affect Hong Kong. Internally, the recent social conflicts are expected to further impact Hong Kong’s economy, especially in terms of investment demand and tourism.
“While the volatile market conditions and uncertainties may create pressure for Hysan in the short term, the group believes its proactive and dynamic curation of the commercial tenant mix, its focus on asset enhancement and strength in property management, an integrated and connected portfolio set in one of Hong Kong’s most unique communities, together with a healthy balance sheet, will continue to power the group and realise its longer term goals,” said Lee
