Swire Properties 2023 Profit

Swire Properties 2023 Profit Likely To Fall By 70%

HONG KONG – Swire Properties, a major commercial property landlord in the Chinese territory, just disclosed that its profit attributable to shareholders for the fiscal year ending on 31 December 2023 could be 70 percent lower than the HK$8.0 billion recorded in the prior year, according to a Hong Kong bourse filing published on Tuesday (26 December, SGT).

The office landlord and real estate developer warned that the sharp drop is due to a HK$4.5 billion (US$580 million) valuation loss in the company’s property investment portfolio, namely lower fair-value gain for its retail investment properties in mainland China and a fair-value loss for its office investment properties that are under construction.

Comparatively, Swire Properties registered a profit of HK$8 billion for the whole of 2022, as well as a fair-value gain on its investment properties to the tune of HK$1.6 billion.

“A change in the fair value of investment properties is non-cash in nature and will not have any impact on the group’s operating cash flow or underlying profit attributable to shareholders,” explained the company.

Nonetheless, Swire Properties greatly benefited from the sale of office assets in Hong Kong. In fact, the company’s expected underlying profit for 2023, which excludes fair-value change in investment properties, is forecasted to rise by 30 percent from the HK$8.7 billion recorded in 2022.

The expected growth in underlying profit is partly due to a gain of HK$3.3 billion from the recent divestment of nine office levels at One Island East, a 69-storey Grade A office building in Quarry Bay. Spanning 296,000 sq ft, the office floors were acquired by Hong Kong’s Securities and Futures Commission (SFC) in a deal that was completed on 21 December 2023.

Jones Lang LaSalle (JLL), which advised the commission on the office asset purchase, said the sale marked the biggest office investment in the city by an end user since 2019. Still, this year’s largest property deal in Hong Kong was the HK$5.6 billion sale of the Goldin Financial Global Centre in January 2023.

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