Hong Kong’s biggest developer posted a 36% decline in first-half profit, hurt by Covid restrictions and a population outflow.
(Bloomberg) — Hong Kong’s biggest developer posted a 36% decline in first-half profit, hurt by Covid restrictions and a population outflow.
Sun Hung Kai Properties Ltd.’s underlying earnings, which exclude property revaluations, fell to HK$9.5 billion ($1.2 billion) in the six months ended Dec. 31, the company said in an exchange filing Thursday.
“The residential market in Hong Kong went through a period of consolidation amid weak domestic economic conditions and rising mortgage rates,” the firm said in the filing.
Another Hong Kong real estate company New World Development Co. also saw underlying profit fall 14% to HK$3.36 billion for the first half, it said in a separate filing.
Hong Kong’s strict policies during Covid-19 deterred businesses and visitors in the past three years, leading to lackluster demand for the city’s traditionally sought-after real estate. Office towers and retail space saw high vacancies while home sales reached a decade low last year.
That said, major developers’ new-home sales are set to rebound this year with stronger demand from mainland Chinese following the removal of border controls. Sun Hung Kai may achieve its annual sales target in the fiscal year ending in June thanks to its “robust” project pipeline, according to Bloomberg Intelligence.
The market is already seeing signs of a recovery. Prices for used homes increased by more than 2% since the beginning of the year, after a 16% decline in 2022, data from Centaline show.
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