Sun Hung Kai Properties Limited (SHKP) today announced its 2023/24 annual results.
During the year under review, SHKP was able to achieve a resilient performance despite the challenging external economic and operating environment. This was underpinned by the Group’s prudent financial discipline, extensive experience gained over the years, strong execution ability of the management team, an established corporate brand, premium properties and services.
During the year, the Group continued to launch new projects for sale when ready. The Group’s contracted sales in Hong Kong and on the mainland amounted to about HK$37.5 billion. New Hong Kong projects put on the market included YOHO WEST Phase 1, The YOHO Hub II in Yuen Long and Cullinan Harbour Phase 1 in Kai Tak, as well as Mid-Levels’ Dynasty Court and other completed projects. All received a positive market response. As of 30 June 2024, the Group’s contracted sales in Hong Kong that have not yet been recognized stood at about HK$24.9 billion, of which about HK$19.6 billion is expected to be recognized in the financial year 2024/25. On the mainland, projects offered for sale during the year included Phase 3 of Shanghai Arch and the third batch of residences at Hangzhou IFC (River East). The sales of both projects received an encouraging response. As of 30 June 2024, the Group’s contracted sales on the mainland that have not yet been recognized totalled RMB12.6 billion. Of this, about RMB8 billion is expected to be recognized in the financial year 2024/25.
The Group recently put Victoria Harbour II in North Point up for sale by tender. Over the next 10 months, Hong Kong projects set to be launched include the first phase of Cullinan Sky in Kai Tak, a new block at The YOHO Hub II in Yuen Long, a joint-venture project on Prince Edward Road West in Ho Man Tin, the second phase of YOHO WEST, and the first phase of the Sai Sha project near Ma On Shan. On the mainland, the Group plans to launch new batches of its joint-venture developments, including villas at Lake Genève in Suzhou, and units at Hangzhou IFC and Foshan’s Oriental Bund.
For the Group’s property investment portfolio, continuous efforts were made to strengthen its competitive edge, and the overall occupancy rate was satisfactory. Office premises meet high green-building standards that align with tenants’ ESG goals, and offer premium building quality and professional property management services. They consistently attract both multinational and local corporations. The Group’s project atop the High Speed Rail West Kowloon Terminus is set to become one of the most sustainable and eco-friendly buildings in the world. Its office portion, called International Gateway Centre (IGC), has secured global financial institution UBS as a tenant for an entire block to house its regional headquarters. This mega project, together with other new developments coming on stream, will bring additional steady cash flows and rental income to the Group starting in the next one to two years.
To address the challenges brought by increasing outbound travel and changing spending patterns of customers, the Group has continually enhanced the competitiveness of its malls. On top of investing in the quality of its properties and services, the Group regularly refines the tenant mix of its malls and has added pet- and family-friendly facilities to outdoor areas. The Point, an integrated loyalty programme for SHKP malls, has continued to expand its customer base and introduced new initiatives, including a function allowing customers to earn bonus points instantly upon purchases. Despite the challenging environment, spending by The Point members has remained relatively stable. The EV super-charger service at its malls had received very positive response from The Point members. As such, SHKP plans to double the number of EV super-chargers in its malls in the coming months and a pre-booking service would be launched for select Point members.
On the mainland, the Group has replicated the success of Shanghai IFC Mall in Nanjing with the recent opening of Nanjing IFC Mall. As the third iteration of the Group’s signature IFC brand, Nanjing IFC Mall brings together prestigious high-end brands, including flagship stores from Asia and around the world. It is set to become a new landmark for business, artistic trends, and lifestyle culture in Nanjing. Separately, the remaining portions at Three ITC in Shanghai, including Tower B office tower, a mega mall ITC Maison, and the Andaz Shanghai ITC hotel, are scheduled for completion from 2025 onwards.
The Group adheres to prudent financial discipline in land bank replenishment. During the year, the Group added three residential sites to its land bank in Hong Kong through lease modifications, with a total gross floor area of about 1.5 million square feet. Moreover, the Group is expected to receive cash compensation of about HK$1.9 billion for the Government’s resumption of its land lots in Kwu Tung North/Fanling North New Development Area. Another batch of land lots in Hung Shui Kiu/Ha Tsuen New Development Area has also been resumed, with compensation of about HK$2.7 billion. In addition, the Group is applying for land exchange for other lots in the area.
In keeping with its belief in Building Homes with Heart, the Group is dedicated to developing a harmonious and sustainable community for all. The large-scale project in Sai Sha will provide premium residences, GO PARK Sai Sha, which is a sports-and-commercial complex covering a site area of 1.3 million square feet, as well as enhanced infrastructure that benefit all residents in the neighbourhood. By blending green lifestyle with nature, the project is set to become a most enjoyable and dynamic community.
The resolution adopted at the Third Plenary Session of the 20th CPC Central Committee affirmed that Hong Kong should leverage the strengths of ‘One Country, Two Systems’ to enhance its status as an international financial, shipping and trade centre, and to develop into an international hub for high-calibre talent. Such efforts, along with the Government’s initiatives to attract businesses, investment and talent, are expected to strengthen Hong Kong’s competitive edge. In addition, a potential interest-rate cut should further benefit the housing market. The Group will uphold its prudent financial discipline, maintain substantial recurring income from its rental portfolio and non-property businesses. It will leverage its strong brand and focus on high asset turnover in its property development business while staying responsive to market conditions. Without compromising quality, the Group will continue to implement strict cost control measures to reduce overall construction capex. With a solid foundation underpinned by its time-tested strategies and a strong execution team, the Group will continue to develop quality properties that meet the public’s aspirations for a healthy, eco-friendly community while achieving sustainable growth.
