Sun Hung Kai Properties Limited (SHKP) today announced its 2023/24 interim results.

During the period under review, the Group faced the challenges of an uncertain economic outlook and a high-interest rate environment, which had an impact on business development. In the face of the challenging macro environment, the Group placed great emphasis on cash flow management and prudent financial discipline, including maintaining a tight control on capital expenditure and being highly selective in land bank replenishment. These measures, coupled with the Group’s robust and sizeable recurring income generated from a quality property investment portfolio and non-property businesses, have helped put the company in good stead to withstand adverse economic conditions.

During the period, SHKP launched YOHO WEST Phase 1 in Tin Shui Wai, NOVO LAND Phase 2A in Tuen Mun and University Hill near The Chinese University of Hong Kong for sale. The units were very well received, reflecting buyers’ continued strong confidence in SHKP’s developments. As always, the Group will launch new projects for sale when they are ready. Over the next 10 months, major Hong Kong projects on offer will include The YOHO Hub II in Yuen Long, the third phase of NOVO LAND in Tuen Mun, the second phase of YOHO WEST, the first phases of Cullinan Sky and Cullinan Harbour in Kai Tak, and the first phase of a large-scale project in Sai Sha near Ma On Shan. The Group will also put up for sale its unsold completed residential units and some of its non-core properties, including the renovated Dynasty Court in Mid-Levels. On the mainland, a new phase of Shanghai Arch in Shanghai and new batches of the joint-venture development Hangzhou IFC will be put on the market for sale. 

The Group’s diversified property investment portfolio remained a reliable source of substantial recurring income. Many of the Group’s offices and shopping malls are part of an integrated project, complementing each other and benefitting from transport interchanges and large-scale residential developments in the vicinity. In addition, the Group’s leasing teams stay up-to-date with market trends and regularly refine the trade-and-tenant mix of the malls to keep abreast of customer needs. 

The Point, an integrated loyalty programme for SHKP malls, has recently revamped its mobile app. A new service called Instant Point Earn was introduced to further enhance shoppers’ experience, drive footfall and boost tenant sales. Furthermore, pet- and family-friendly facilities were introduced to boost traffic and expand the customer base, and the indoor and outdoor areas refurbished to suit customer preferences. For office buildings, the Group has consistently pursued asset and service enhancements, ensuring they meet stringent international and local corporate environmental requirements. Over the years, many of our office buildings have attained top ratings of green-building certifications.

The Group is growing its property investment portfolio to bolster recurring income base. The Group’s serviced-apartment project, TOWNPLACE WEST KOWLOON, soft opened in October 2023. Market response to the first batch of rooms was encouraging with many young professionals from the mainland and abroad being attracted to the hybrid short- and long-term leasing model. Including this development, the Group’s portfolio of serviced apartments now provides a total gross floor area of over 1.2 million square feet. They offer diverse types of lodging in various locations, catering to different accommodation needs of incoming talents from different parts of the world. 

YOHO Mix, an extension of the Group’s flagship YOHO Mall in Yuen Long, and the shopping mall beneath The Millennity in Kwun Tong are scheduled to open in 2024. In the medium term, the High Speed Rail West Kowloon Terminus Development and the Artist Square Towers Project will join the Group’s ICC and two luxury hotels to form a unique commercial cluster in Hong Kong. With its proximity to the West Kowloon Cultural District, exceptional transport connectivity, and business opportunities brought by an increasing number of visitors using the high-speed rail, this commercial cluster is expected to become a distinctive hub in the Greater Bay Area and will offer a wide range of commercial, retail, cultural and entertainment options.

On the mainland, Nanjing IFC is the Group’s third IFC complex. The mall within the complex had a soft opening in January this year with a positive response from the market. Serving as a unique one-stop destination for shopping, entertainment and leisure, the mall houses a selection of top-tier brands, including some that are new to Nanjing. The business of the Andaz Nanjing Hexi hotel at Nanjing IFC has been steadily growing since its opening in April 2023. Meanwhile, construction is currently underway for Hangzhou IFC, another integrated landmark project by the Group that upholds the IFC brand of excellence. The final phase of its residential portion was sold out in August 2023. In Shanghai, the flagship ITC Maison mall will open in phases starting from 2025 onwards.

Prudent financial management is an important pillar underpinning the Group’s sustainable growth. The Group has placed great emphasis on cash flow management. As at the end of 2023, the Group’s Hong Kong contracted sales yet to be recognized amounted to HK$32.8 billion. Among this, about HK$22.4 billion is expected to be recognized in the second half of this financial year. In addition, the Group will further strengthen its recurring income stream and continue its proactive leasing management to strengthen the competitiveness of its property investment portfolio. At the same time, the Group remains dedicated to delivering premium properties and professional services in an efficient and cost-effective manner. A number of measures have been implemented to control construction costs without compromising on quality. The overall construction expenditure for its Hong Kong projects has already reached its peak and is expected to come down in the next few financial years.

Looking ahead, Hong Kong will continue to benefit from robust institutional frameworks, a sound common law system, a simple and low tax regime, free flow of capital and a well-functioning exchange-rate system under ‘One Country, Two Systems’. These enduring advantages, coupled with a pool of professionals, are difficult to replicate and have supported Hong Kong’s prominent position as a major international financial centre. The legislation of Article 23 of the Basic Law is now underway. This, together with the National Security Law, will bring safety, stability, and a favourable business environment to Hong Kong. With the support of the motherland, Hong Kong will continue to thrive as a global connector. The Group has strong confidence in the long-term prospects of both the mainland and Hong Kong.

For over half a century, SHKP has navigated through the ups and downs alongside Hong Kong, and has overcome various challenges, including the Asian financial crisis and global financial crisis. With an unwavering commitment to quality, the Group has established itself as a trusted brand while continuously pursuing innovation. Supported by seasoned management, a dedicated team of staff, prudent financial discipline, agile business strategies and strong execution ability, our Group is poised to continue delivering premium properties and services in Hong Kong and on the mainland, meeting the diverse needs of our customers.