- Hongkong Land (SGX:H78)’s underlying net profit in FY23 declined by 5% y-o-y to US$734m (12% above our estimate), dragged by an impairment of US$90m on development property (DP) projects in China.
- - Read this at SGinvestors.io -
- Hongkong Land's dividend for FY23 was flat y-o-y at US$0.22 (6.8% dividend yield).
Retail, Singapore office rentals offset sluggish Hong Kong office rentals
- Hongkong Land’s office space in Hong Kong was subject to ~-10% rental reversion in FY23; the magnitude should narrow in FY24F, per management’s estimates. Average monthly rent in FY23 was HK$106/sf, down from HK$111/sf a year ago. End-2023 office vacancy at Hongkong Land was 7.4%, below the Central average of 10%, as Hongkong Land adopted flexible leasing strategies to attract new tenants looking for smaller floor areas.
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- Meanwhile, rental growth for the company in China and Singapore was solid at 19% and 8% y-o-y, respectively, in FY23, thanks to a recovery in tenant sales in China and positive rental reversions for its Singapore office space.
Suppressed margin from China development property sales
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