Hysan slides into $2.6b first-half loss

Business | Winnie Lee 11 Aug 2020

Hysan Development (0014), the largest landlord in Causeway Bay, recorded a net loss of HK$2.63 billion in the first half, mainly due to the change in fair value of investment properties, but it kept its dividend unchanged.

In the same period last year, the group recorded a net profit of HK$2.78 billion.

The group declared a dividend of 27 HK cents, the same as last year.

The underlying profit, excluding the fair value change of investment properties, was down 3.4 percent year-on-year to HK$1.35 billion.

Revenue fell 5 percent to HK$1.98 billion.

The first-half retail portfolio revenue dipped 10 percent to HK$900 million. The occupancy rate of the shops was 94 percent, 2 percentage points lower than the end of last year.

Hysan's estimated tenant sales underperformed Hong Kong's overall retail sales.

Hysan's overall rental reversion in renewals, rent review and new lettings were negative in the first six months.

The office portfolio turnover saw a slight decline of 0.2 percent to HK$927 million.

The occupancy rate was 96 percent, 2 percentage points of decline compared to the end of last year.

The office portfolio continued to achieve an overall positive rental reversion on renewals, rent review and new lettings.

At the end of June, banking and finance remained the largest tenant sector, accounting for about 23 percent of area occupied by the office portfolio.

The group expects this proportion may further increase in the second half of the year.

The group said it has been introducing more banking and finance tenants and strengthening the flexible space.

Irene Lee Yun-lien, chairman of Hysan, said the second interim dividend payout will depends on Hong Kong's situation at the time and she will maintain close ties with tenants.

She also emphasized the group has been paying attention to development opportunities in Hong Kong and abroad, when responding to a question about acquisitions.

Lee said the unknown trajectory of the Covid-19 pandemic and macro-geopolitical issues remain major factors in determining Hong Kong's economic outlook for the second half.

However, the group saw a strong rebound in May and June, when the virus situation eased. Lee estimated the market performance will pick up after the virus outbreak ends.

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