Revenue Of Office & Retail Landlord Down

Revenue Of Office & Retail Landlord Down 17% In 2020

HONG KONG – Revenue of Wharf Real Estate Investment Company’s investment properties, which mainly consists of office space, retail outlets, and serviced apartments in the Chinese territory and in Singapore dropped by 17 percent year-on-year to HK$11.83 billion in fiscal year 2020, according to the company’s financial results announced on Thursday (4 March, SGT).

At the same time, the operating profit of its investment properties declined by 22 percent to HK$9.73 billion on an annual basis.

The fall is attributed primarily to rental support of more than HK$2 billion given to retail lessees, as well as significant increase in marketing and programming expenses to spur foot traffic and retail sales amidst dismal market conditions.

The company stated that its retail portfolio was severely impacted by the shrinking retail sector due to the COVID-19 pandemic. Similarly, its office portfolio was hit hard by a sharp contraction in the global economy, local “work from home” rules, and new office supply. This pushed up vacancy levels, while rents declined slightly.

For instance, the occupancy rate of the office component of Harbour City in Tsim Sha Tsui fell to 85 percent as of 31 December 2020. Also, revenue and operating profit of the office space there both dropped by 2 percent last year.

“As leasing activity remained subdued, the increasing vacancy level and the availability of cost-saving and flexible options in the market have created a more competitive landscape,” and this has exerted more pressure on office rents in Harbour City, said its landlord.

Similarly, the occupancy rate of the office component of Times Square in Hong Kong’s Causeway Bay fell to 86 percent, while revenue and operating profit fell by 6 percent and 7 percent respectively.

In Central, Crawford House and Wheelock House saw higher office occupancy levels of 94 percent and 95 percent respectively as of the end of December 2020 thanks to their diversified tenants. As for their retail component, both were fully occupied. Consequently, their combined revenue and operating profit edged up year-on-year by 2 percent and 3 percent respectively.

Over in Singapore, the landlord’s Wheelock Place in Orchard Road saw an office occupancy rate of 97 percent, while its retail premises were 93 percent let. As for its Scotts Square shopping centre in the city-state, the occupancy level stood at 91 percent as of 31 December 2020.

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