Swire Properties’ Rental Income From HK Offices Down 8%
HONG KONG – The gross rental income of Swire Properties’ office portfolio in the Chinese territory declined by 8 percent year-on-year to HK$2.874 billion during H1 2021, according to local bourse filings published on Thursday (12 August, SGT).
“The decrease mainly reflected the loss of gross rental income from the Cityplaza One office tower, which was disposed of in the second half of 2020,” stated the commercial property landlord. If the effect of Cityplaza One’s sale was excluded, its gross rental income only dipped by 2 percent over the period.
Moreover, Swire said Hong Kong’s office market was weak due to the COVID-19 pandemic. This resulted in higher office vacancy rates in Central, and the dismal situation was exacerbated by a large amount of new office supply.
Nevertheless, the landlord revealed that there was more leasing activity in its office buildings in Hong Kong. Its office portfolio was also resilient, with firm occupancy levels and positive rental reversions at Taikoo Place.
“Our office portfolio continued to show resilience, particularly in Hong Kong, where the decentralisation trend continues. Our investment in creating a global business district at Taikoo Place is drawing increasing interest from major corporations and cementing the position of Taikoo Place as the 2nd central business district (CBD) on Hong Kong Island,” said Swire, adding that Two Taikoo Place has already signed up an anchor tenant.
As of 30 June 2021, 96 percent of its office portfolio was leased. In particular, its office assets in Hong Kong saw healthy occupancy rates. For instance, Taikoo Place (including One Island East and One Taikoo Place), which has a gross floor area of about 2.55 million sq ft, was fully occupied. As for the 2.19 million sq ft Pacific Place, 98 percent of its area was taken up.
Swire revealed that its fully-owned existing office properties in Hong Kong collectively measure 9 million sq ft. Their overall attributable gross rental income reached HK$3.04 billion during the first half of the year.
As of the end of June 2021, all of its office properties in Hong Kong – either completed, under development, or partially owned – were valued at nearly HK$181.19 billion. Of this, Swire owns almost HK$171.3 billion.