Hongkong Land Holdings says that its underlying profit in the quarter of 1QFY2025 ended March 31, 2025 was “in line” with the same period a year ago.
This is from lower contributions from its central portfolio in Hong Kong, offset by higher contributions from the build-to-sell business.
For Prime Properties Investments, performance in Hong Kong was impacted by negative rental reversions in the office portfolio, as well as temporary impact to retail rental income from the ongoing Tomorrow’s CENTRAL transformation.
Contributions from the build-to-sell business were higher due to the timing of sales completions, primarily on the Chinese mainland.
The group said that it generated net cash inflows in the first quarter, with net debt reducing to US$4.9 billion ($6.33 billion) as at end March.
For the quarter, net gearing was 16% and committed liquidity, which is cash and unused committed borrowing facilities, was US$3.2 billion. About 68% of the group’s interest rate on debt was at fixed rates.
The group’s Prime Property Investments saw physical vacancy at 8.3% at March 31, 2025, whilst vacancy on a committed basis was 7.3%, broadly unchanged from the end of 2024.
Vacancy for the overall Central Grade A office market was 11.5% at the end of March 2025, with just over 2% of the portfolio subject to expiry in the remainder of the year.
The group’s LANDMARK retail portfolio in 1QFY2025 was lower y-o-y. Vacancy was 4.5% as at end March compared to 3% as at end 2024, and base rent reversions were largely neutral.
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In Singapore, rental reversions were positive, driven by tight supply and flight to quality demand. Physical vacancy was 2.0% at end March, and on a committed basis, vacancy was 0.8%, compared with 1.0% at the end of 2024.
Hongkong Land no longer invests in its build-to-sell segment, and is focused on accelerating the return of capital while completing committed projects to the same high standards.
The majority of its build-to-sell invested capital is on the Chinese mainland and in Singapore. In the first quarter, the Group’s attributable interest in contracted sales on the Chinese mainland and in Singapore were US$190 million and US$307 million respectively.
Hongkong Land’s full-year underlying earnings guidance remains unchanged, and contributions from the central portfolio in Hong Kong is expected to lower due to negative rental reversions for office, whilst lower contributions from luxury retail is anticipated as up to 40% of LANDMARK’s leasable floor area will be under renovation in 2025.
Shares in Hongkong Land closed 2 cents lower or 0.381% down at $5.23 on May 22.
