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- Stable underlying profit
- Resilient Investment Properties performance
- Higher residential profits in China
- 12 new development projects secured
- US$500 million share buyback in progress
|
2021
|
2020
|
Change (%)
|
|
|---|---|---|---|
|
Underlying profit attributable to shareholders (US$ million)
|
966
|
963
|
–
|
|
Gross assets (US$ billion)
|
39.7
|
40.3
|
(1)
|
|
Net asset value per share (US$)
|
15.05
|
15.30
|
(2)
|
million sq. m.
Area of operational commercial investment portfolio under management (including 100% of joint ventures)
Hongkong Land delivered a resilient performance in 2021, despite the continued impact of the pandemic and related restrictions. The group delivered underlying profit of US$966 million, in line with the prior year. Profits from the group’s Investment Properties business were flat against the prior year. Retail rental income increased during the year, although this was offset by lower office rents in Hong Kong. A greater number of residential sales completions on the Chinese mainland resulted in a higher contribution from the Development Properties business. Good progress was made during the year on the replenishing of the group’s land bank, with nine new projects secured on the Chinese mainland and three in Singapore.
There was a loss attributable to shareholders of US$349 million, reflecting net losses of US$1,315 million due to lower valuations of Investment Properties. This compares to a loss attributable to shareholders of US$2,647 million in 2020, which included a US$3,610 million reduction in property valuations.
Investment Properties
The group’s Central office portfolio in Hong Kong continued to perform well overall and Central rents declined to a lesser extent than the broader market. Vacancy and average office rents were both lower at the end of 2021 than at the end of the prior year.
The Central LANDMARK retail portfolio remained effectively fully occupied and saw improved tenant sales due to a modest recovery in consumer sentiment and an increase in average retail rents due to a reduction in temporary rent relief provided to tenants.
The value of the group’s Hong Kong Investment Properties portfolio decreased by 5% compared with the prior year, due to lower rents, with no change in capitalisation rates.
In Singapore, positive rental reversions continued, with average office rents increasing and vacancy remaining low. The value of the group’s Singapore Investment Properties portfolio increased by 1% compared with the prior year.
In Beijing, trading performance at WF CENTRAL continued to benefit from the strength of luxury retail sentiment on the Chinese mainland.
In Shanghai, construction is proceeding on schedule at the group’s 43%-owned prime 1.1 million sq. m. mixed-use development on the West Bund, which is expected to complete in multiple phases between 2023 and 2027.
Development Properties
On the Chinese mainland, the profit contribution from Development Properties increased compared with the prior year, due to more residential sales completions. Market sentiment weakened in the second half of the year amidst tightened credit conditions for the sector, but contracted sales performance at the group’s projects remained satisfactory, reflecting the superior locations of its developments in Tier 1 and 2 cities.
In April 2021, the group launched a seven-level shopping mall in Chongqing under a new lifestyle retail brand – The Ring, the first in a series of malls under development using this new brand. In addition, the group has three luxury retail properties under development, in Shanghai, Chongqing and Nanjing. It also has six premium lifestyle retail properties under development on the Chinese mainland. Singapore profits were in line with the prior year. Despite ongoing impact from the pandemic, residential market sentiment remained robust during the year, resulting in the introduction of cooling measures in late 2021 to moderate demand. In the rest of Southeast Asia, there were moderate improvements in market sentiment and a gradual recovery in construction activities as borders across the region reopened.
- Investment Properties – Office
- Investment Properties – Retail
- Development Properties
Underlying profit attributable to shareholders (US$ million)
Net asset value per share (US$)
Underlying operating profit by activity (before corporate costs) (US$ million)
Investment Properties
Development Properties
Gross assets by activity
Investment Properties
Development Properties
Gross assets by location
Hong Kong
Chinese mainland & Macau
Southeast Asia
