The trend of Hongkongers’ northbound consumption will not change, said Hang Lung Properties, flagging persistent challenges in Hong Kong’s retail sector.
The developer’s chief executive Weber Lo Wai-pak made the judgment but added that Hang Lung is trying to offer some cheaper goods or invite mainland brands to local malls.
Hong Kong’s retail sales rallied 2.5 percent in May, ending the 14-month losing streak. But the May volume is only 78 percent of the pre-pandemic level.
But for the high-end property market, Lo expects the prices will gradually rebound and be stabilized, as he found the sector seems to have a “strong correlation” with the initial public offering market, in which Hong Kong returned to the world’s No.1 in the first half of the year.
In mainland’s office market, Hang Lung is facing pressure, especially in Shanghai, as foreign tenants are seeking cheaper offices while its peers are intensifying the price war, said Lo.
Chairman Adriel Chan Wenbwo expected Hang Lung’s net gearing ratio – standing at 33.5 percent as of June – is nearing the peak.
Chief financial officer Kenneth Chiu Ka-kui projected that private developers may face more liquidity pressures as they have fewer fundraising means.
Chiu also expects the call loan pressure may persist for a while in the city’s property sector.
THEMIS QI
