Press Release

30/07/2019
Hang Lung Reports Solid Growth in Core Business
(Hong Kong, July 30, 2019) Hang Lung Properties Limited (HKSE Stock Code: 00101) and Hang Lung Group Limited (HKSE Stock Code: 00010) today announced financial results for the six months ended June 30, 2019.

The core property leasing business in the first half of 2019 sustained the strong growth momentum from the second half of 2018. In spite of a 6% period-on-period Renminbi (RMB) depreciation, the rental revenue of leasing portfolio for Hang Lung Properties and Hang Lung Group both increased 2%.

Commenting on the financial performance, Mr. Ronnie C. Chan, Chairman of Hang Lung Group and Hang Lung Properties, said, “We have sustained solid growth in our core leasing business in the first half of 2019, despite the uncertainties in the global economy. The growth momentum of our leasing portfolio, especially at our Mainland properties, reflected effective measures taken to improve our tenant mix and enhance facilities and customer services.”

“Our properties outside of Shanghai have achieved a remarkable revenue growth of 14%, while our investments in asset enhancement in Shanghai are paying off handsomely, as evident in the strong performance of Plaza 66. The progressive completion of the major renovation at the Grand Gateway 66 mall in Shanghai this year is expected to deliver a similar boost in revenue. Moreover, a number of new properties will commence business in the second half of this year, providing a further impetus to business growth,” he added.

Total revenue of the eight malls in mainland China increased 8% to RMB1,479 million for both Hang Lung Properties and Hang Lung Group. The asset enhancement initiatives at Grand Gateway 66 caused a short-term disruption of rental income, while the properties outside of Shanghai achieved an outstanding 14% revenue growth and continued the growth momentum with a 7% increment compared to the second half of last year. Total revenue from the office towers provided a solid and stable income stream for Hang Lung Properties and Hang Lung Group, accounting for 22% and 26% of our mainland China leasing revenue, respectively.

In Hong Kong, the performance of the core leasing properties was stable. Total revenue at Hang Lung Properties and Hang Lung Group both recorded growth of 3% to HK$2,014 million and HK$2,096 million, respectively.

The Boards of Directors of Hang Lung Properties and Hang Lung Group have declared an interim dividend of HK17 cents per share and HK19 cents per share, respectively, to be paid on September 26, 2019, to shareholders registered as at September 13, 2019.

 

Business Outlook


While the US-China trade dispute shows no sign of abating, the Group remains cautiously optimistic that our business will deliver sustainable growth in both Hong Kong and the Mainland. The growth will be fueled by a number of key drivers.

The established properties in both Hong Kong and Mainland are expected to sustain the current momentum. With the implementation of various customer-centric initiatives, including the roll-out of the HOUSE 66 Customer Relationship Management (CRM) program and adoption of new technologies, the Group will build stronger engagement with both the tenants and customers and offer a unique Hang Lung Brand experience, boosting sales and leasing revenue.

In the second half of 2019, a number of new properties will commence business, including the mall and office tower of Spring City 66 in Kunming, the second office tower of Center 66 in Wuxi, and the Conrad Hotel at Forum 66 in Shenyang. Moreover, the investment in asset upgrading programs at Grand Gateway 66 in Shanghai and Peak Galleria in Hong Kong is expected to deliver a further increase in revenue.

Depending on market conditions, the Group will continue to sell down residential units on hand in Hong Kong. At the same time, Hang Lung will extract more value from its property portfolio through disposal of non-core properties. 

On the property development side, in Hong Kong, the Group has started two re-development projects, and will continue to look for opportunities. On the Mainland, four mixed-use projects have serviced apartment element and are intended for sale. The construction work of luxury serviced apartments at Heartland 66 in Wuhan has started, and similar development at projects in Wuxi, Kunming and Shenyang will also commence in phases.

The Group will continue to adopt prudent financial management strategies to support its long-term growth. With a strong financial position and cash generation capability, it is well-placed to capture market opportunities in Hong Kong and mainland China.

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