REG - Hongkong Land Hldgs Jardine Matheson Hdg - INTERIM MANAGEMENT STATEMENT

Hongkong Land HoldingsAnnouncement

23/05/2024 10:45

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RNS Number : 6662P  Hongkong Land Hldgs Ltd  23 May 2024

Announcement

 

The following announcement was issued today to a Regulatory Information
Service approved by the Financial Conduct Authority in the United Kingdom.

 

HONGKONG LAND HOLDINGS LIMITED

Interim Management Statement

 

23rd May 2024 - Hongkong Land Holdings Limited today issues an Interim
Management Statement for the first quarter of 2024.

 

The Group's underlying profit in the quarter was in line with the same period
in 2023, with total contributions from the Investment and Development
Properties businesses also broadly unchanged.  For Investment Properties,
better performance from the luxury retail portfolio across the region and
Singapore office offset lower contributions from Hong Kong office.

 

In China, buyer sentiment toward the residential sector has continued to
deteriorate, with reduced sales and pricing. The Group's attributable interest
in contracted sales was US$262 million in the first quarter, down 36% compared
to the equivalent period in 2023.  Contracted sales for the full year are now
expected to be lower than 2023 levels, with profit margins impacted by
reductions in sales prices across a number of projects.

 

As a result of these deteriorating market conditions, an extensive review of
the Group's projects is being undertaken.  Where projected sales prices are
lower than development costs, the investment carrying value will be impaired.
Although the review is ongoing, this is expected to result in a non-cash
impairment charge of US$200 million to US$300 million which will be reflected
in the first half results to 30th June 2024.  Accordingly, underlying
earnings in the period will be significantly lower than in the same period in
2023.

 

This review will have no material impact on the Group's financial position,
which remains strong.  At 31st March 2024, gearing was 16% and committed
liquidity (cash and unused committed borrowing facilities) was US$3.1 billion.

 

In Hong Kong, office leasing demand continued to be impacted by uncertainty in
the global financial markets.  The Group's Central office portfolio continued
to outperform the broader market, despite an increase in vacancies across the
city.  Physical vacancy decreased to 7.1% from 7.4% at the end of 2023.  On
a committed basis, vacancy was 6.6%, compared to 6.8% at the end of 2023,
whilst vacancy for the overall Central Grade A office market reached 10.6% at
the end of March 2024.  Rental reversions continued to be negative in the
period.  However, a number of tenants with leases expiring in 2024 have
renewed and committed to new long-term leases.  Accordingly, at 31st March
2024, only 7% of the portfolio remains subject to expirations in 2024.

 

The Group's LANDMARK retail portfolio in Hong Kong delivered an improved
performance compared to the same period last year, with tenant sales in the
period exceeding that of the first quarter of 2023.  Base rent reversions
were mildly positive, whilst vacancy at 31st March 2024 remained low at 1.8%.

 

At the Group's CENTRAL series luxury malls in Beijing and Macau, overall
performance was stable, with better trading at WF CENTRAL at Beijing offset by
slower results in Macau.

 

In Singapore, rental reversions continued to be positive, driven by tight
supply and flight to quality demand.  Physical vacancy was 2.0% at 31st March
2024, compared to 1.9% at the end of 2023.  On a committed basis, vacancy
remained low at 1.0%, compared with 0.9% at the end of 2023.

 

Hongkong Land is a major listed property investment, management and
development group.  The Group owns and manages more than 850,000 sq. m. of
prime office and luxury retail assets in key Asian cities, principally Hong
Kong, Singapore, Beijing and Jakarta.  Its properties hold industry leading
green building certifications and attract the world's foremost companies and
luxury brands.  The Group also has a number of high-quality residential,
commercial, and mixed-use projects under development in cities across China
and South East Asia, including a 43% interest in a 1.1 million sq. m.
mixed-use project in West Bund, Shanghai.  Its subsidiary, MCL Land, is a
well-established residential developer in Singapore.  Hongkong Land Holdings
Limited is incorporated in Bermuda and has a primary listing in the standard
segment of the London Stock Exchange, with secondary listings in Bermuda and
Singapore.  The Group's assets and investments are managed from Hong Kong by
Hongkong Land Limited.  Hongkong Land is a member of the Jardine Matheson
Group.

 

 

- end -

 

 

For further information, please contact:

 

 Hongkong Land Limited
 Mark Lam               (852) 2842 8211
 Gary Leung             (852) 2842 0601

 

Brunswick Group Limited

 Kay Lau  (852) 6021 7009

 

This and other Group announcements can be accessed through the Internet at
'www.hkland.com'.

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