Causeway Bay landlord sees bigger headwind

Business | Kevin Xu 21 Feb 2020

Hysan Development (0014) expects tenant sales to fall 20 percent last month after recording a 4.5 percent drop in retail portfolio turnover in 2019.

Chairman Irene Lee Yun-lien said the company is facing the biggest challenge in decades amid the fast-spreading novel coronavirus, which may have a greater impact on its business than the 2003 SARS epidemic.

Meanwhile, the largest landlord in Causeway Bay pledged cut rents for retail tenants in February and March due to the coronavirus outbreak.

When asked about the rent cut, chief operating officer Ricky Lui Kon-wai said a fixed rent reduction for all tenants is not necessarily a satisfactory solution.

Visitors numbers at Hysan malls have dropped over the past two to three weeks, Lui said.

Occupancy rates of their retail portfolio fell by 2 percentage points to 96 percent as of the end of last year from a year before.

Lee said Hong Kong's caterers, luxury brands and co-working spaces grew too fast and the novel coronavirus outbreak will accelerate consolidations within these industries.

Hysan Development said yesterday that underlying net profit increased by 2 percent to HK$2.59 billion last year, and declared a second interim dividend of 117 HK cents per share.

Net profit for the year fell by 19.7 percent to HK$4.85 billion in 2019.

The basic earnings per share were HK$4.63 per share based on net profit.

Revenue grew by 2.5 percent to HK$3.99 billion, as a robust first half helped ease the impact of a negative second half. Retail portfolio turnover decreased 4.5 percent year-on-year to HK$1.84 billion in 2019.

The company said global uncertainties and continued Sino-US trade tensions were among the external factors negatively affecting Hong Kong's economy last year, while the social unrest in the second half had an immediate adverse impact part of Hysan's business.

Lawrence Lau Juen-yee, an independent non-executive director, will not stand for re-election at the annual general meeting of the company in May, Hysan said. He will retire as an INED and a member of the nomination committee.

Lau was born in Zunyi, Guizhou province. He is an economist and former vice-chancellor of the Chinese University of Hong Kong.

Shares in Hysan dipped 0.17 percent to HK$29.55 yesterday.

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