Modest retail sales, office leasing drag down Champion REIT's distributable income

Champion REIT's (2778) interim distributable income dropped 12.6 percent year-on-year to HK$476 million, with persistent outbound travel weighing on retail sales and as the office leasing market remained subdued.

Its distribution per unit was also down by 13.3 percent to 7.01 HK cents.

Total rental income declined by 7.6 percent to HK$1.03 billion, primarily due to negative rental reversion and weaker retail sales, the company said.

The rental income of Three Garden Road in Central fell 5.4 percent to HK$540 million, impacted by negative rental reversion and lower average occupancy. The property's rent also decreased 5.2 percent to HK$82.7 per square foot.

Langham Place Office Tower also saw its total income drop 9.1 percent to HK$151 million, with a stable occupancy rate of 86.9 percent.

Looking ahead, the company said the negative rental reversion will likely continue to suppress rental income and reduce distributions compared to last year, while the expected lower interest rate would reduce interest expenses.

HELEN ZHONG