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Hongkong Land's profits climb 41% on strong HK property market
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| Fiona Chan |
Fri, Mar 07, 2008
The Straits Times
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CONTINUED buoyancy in the Hong Kong property market and strong sales of its overseas projects gave a boost to Hongkong Land's profits last year.
The Hong Kong-based property group's core earnings rose 41 per cent to US$345 million (S$479.5 million) for the year ended Dec 31.
This figure excludes gains from revaluing the group's investment properties. Including the gains, which rose steeply over those in 2006, profit would have climbed 49 per cent to US$2.8 billion, Hongkong Land said.
Revenue was up 68 per cent at US$933.2 million.
| The firm's net rental income rose 26 per cent last year over 2006, a result of decade-high office rents and occupancy rates.
This was due to broad-based demand for offices and shops, especially in Hong Kong's coveted Central district, where the group's buildings are largely located.
The office shortage is gradually being eased by new supply in decentralised areas. This, however, has had little effect on Hongkong Land's office portfolio, as the Central district still lacks new space, the group said.
Hongkong Land also benefited from soaring rents in the Singapore office market. It has a share in One Raffles Quay, which is fully let, and the Marina Bay Financial Centre.
Earnings per share rose 37 per cent to 15 US cents. With revaluation gains included, they climbed 45 per cent to US$1.24, while net asset value per share increased 29 per cent to US$5.16.
In its residential segment, Hongkong Land said profits nearly doubled, due mainly to its joint venture in Beijing and the completion of three projects in Singapore by its subsidiary, MCL Land.
These three projects - Mera East in Changi Road, The Metz in Devonshire Road and The Calrose in Yio Chu Kang - led to MCL Land almost doubling its core earnings last year.
MCL Land also booked better-than-expected sales for four developments in Singapore last year.
Hongkong Land is proposing a final dividend of 9 US cents a share, payable on May 14. This will bring its total dividend payout this year to 13 US cents per share, 30 per cent more than in the previous year.
The group believes the outlook for its Central properties in Hong Kong remains positive, although the 'possible effects of the economic slowdown in the United States and Europe have yet to be seen'. It also said revenues would strengthen in the coming years from projects in Singapore and Macau.
WARY OUTLOOK
The group believes the outlook for its Central properties in Hong Kong remains positive, although the 'possible effects of the economic slowdown in the United States and Europe have yet to be seen'.
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