Hong Kong's Times Square owner says earnings sink on weak retail, property market
Wharf Real Estate Investment Co, one of Hong Kong's biggest commercial landlords, said earnings tumbled last year as revenue from investment and hotel properties declined and a multi-year slump in the property market further eroded the value of its assets.
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Net profit fell 81 per cent from a year earlier to HK$891 million (US$114.7 million), mainly due to a five-fold increase in property revaluation deficit to HK$5.66 billion amid weak demand for commercial real estate, it said in a stock exchange filing on Monday. Revenue slipped 3 per cent to HK$12.9 billion. Excluding the deficit, earnings from its underlying business rose by 2 per cent.
Wharf Reic, as the group is known, is controlled by the family of billionaire Peter Woo. The Harbour City mall in Tsim Sha Tsui and the Times Square shopping centre in Causeway Bay are among its key assets. It operates The Murray and Marco Polo hotels.
'While Hong Kong's economy showed signs of moderate growth, demand for commercial properties remained weak,' it said. 'The strong local currency and rather gradual pace of interest rate cuts continued to dampen retail sales. Office demand was also soft as businesses sought to control costs in an uncertain environment.'
Occupancy of retail space in Times Square fell to 93 per cent from 95 per cent in 2024, while the occupancy rate for the office component rose to 90 per cent from 88 per cent, it said. Retail occupancy at Harbour City fell to 94 per cent from 97 per cent, while the office portion rose to 90 per cent from 88 per cent.
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'Vacancy at Harbour City and Times Square malls remained modest, but weaker turnover rent amid declining tenant sales affected revenue,' it said.
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