The world’s largest property developer by market value, Sun Hung Kai Properties Ltd, has announced that its full-year underlying profit surged 12 percent due to an increase in rental income from its shopping malls and offices.
The company’s net income excluding property revaluations jumped to HK$13.9 billion (S$2.4 billion) for the fiscal year that ended June 30, from HK$12.4 billion in the previous year. However, this was below the HK$14.1 billion estimate of 17 analysts polled by Bloomberg.
Rental profit rose 14 percent, as the “leasing demand has been picking up”, said the company in a statement.
Rental portfolio of Sun Hung Kai “should reduce earnings volatility and provide the company the capital to take on more risks,” said Trevor Cheung, a Hong Kong-based analyst at BNP Paribas.
Controlled by the family of Kwong Siu-hing, Sun Hung Kai built and manages office buildings such as the International Commerce Centre – HK’s tallest skyscraper – and the International Finance Centre – a joint project with Henderson Land Development Co. The company’s rental profit climbed to HK$8.31 billion from HK$7.27 billion in the previous year.
It recorded a profit of about HK$6.62 billion from apartment sales in the last fiscal year, mainly attributed to projects like Orchard Residence in Singapore, Greenview and Yoho Midtown in Hong Kong.
It also sold nearly 95 percent of the units at Larvotto, a harbor-front high-end apartment project in the Island South district of Hong Kong.
According to Centaline Property Agency Ltd., the developer also sold 3,200 units for approximately HK$30 billion in the first six months of the year, the most among developers in Hong Kong, as home prices in the city-state surged 13 percent driven by low mortgage rates.
Victor Lui, executive director of the company’s property agency unit, said Sun Hung Kai is expecting to sell HK$26 billion worth of properties this year, in addition to HK$8-billion properties it has already sold in the last two months.