Relying on its sufficient cash reserves, ultra-low debt ratio and many rental properties, Sun Hung Kai Properties (SHKP) has demonstrated its resilience during the downturn in the real estate market during the past year.
The group’s profit generated from property sales totalled HK$7.85 billion ($1 billion), and contracted sales reached about HK$37.5 billion in attributable terms as of 30 June 2024. The gross rental income, including contributions from joint ventures and associates, increased by 3% year-on-year to HK$25 billion, and net rental income rose by 3% year-on-year to HK$19 billion.
Adhering to the principle of prudent financial management, SHKP has maintained its net debt ratio at 18% in the past year, demonstrating its healthy financial performance.
Within the flagship commercial real estate in mainland China and Hong Kong, property leasing is one of the main sources of income for SHKP. Gross rental income in Hong Kong reached HK$17.9 billion and the overall occupancy stayed at 92%; in mainland China it increased by almost 8% year-on-year to HK$6.3 billion. SHKP’s rental portfolio on the mainland will be further expanded on completion of the remaining portion of Three ITC in Shanghai.
In terms of sales successes, the launch of third phase of Shanghai Arch and third phase of the residential portion of the joint-venture Hangzhou IFC on the mainland both recorded brilliant sales performances. Major contributors in Hong Kong included Yoho West Phase 1 in Tin Shui Wai, The Yoho Hub II in Yuen Long, and Cullinan Harbour Phase 1 in Kai Tak. In addition, the remaining units from various completed projects, such as Dynasty Court in Mid-levels Central, Crown of St. Barths in Ma On Shan and Ultima in Ho Man Tin, continued to receive positive market response.
SHKP paid a record $5.43 billion to purchase a plot of land above West Kowloon station in 2019 and the development is slated for completion in 2025. The High-Speed Rail West Kowloon Terminus development is the most eye-catching project in Hong Kong, and has proved to a certain extent that long-term investors' confidence in Hong Kong has remained relatively unaffected.
Fulfilling its sustainable commitment, SHKP has already met its target of reducing the greenhouse gas emissions for its key commercial buildings by 25% and remains dedicated to obtaining LEED Gold or Platinum ratings for its new major commercial projects.