27/2/2018-8

Hysan Park three rental income next year spent 300 million yuan

Hysan Industries (014) earned 3.666 billion yuan last year, up 198.52% from a year earlier. Earnings per share were 347.78 cents. Final dividend was 111 cents, or 137 cents, %.

During the period, the turnover was 3.548 billion yuan, up 0.37% over the previous year. The turnover of the Company’s retail business unit dropped 2.2% YoY to RMB1.925bn and the occupancy rate was 97%. The turnover of the office building business unit increased by 5.2% yoy to RMB1.393bn and the occupancy rate was 96%. Residential business turnover dropped 3.6% YoY to RMB 264 million with a rental rate of 75%. The Group’s basic profit rose 5.1% YoY to RMB2,491 million, partly reflecting the one-off compensation of RMB142 million for the retirement of one of its retail tenants. The recurring basic profit, which is the key indicator of the Group’s core leasing business, fell 0.8% to RMB2,349 million.

Causeway Bay office and non-Central area competition

At the performance meeting, He Shurin, Chief Financial Officer of the Group, said that 35% of its shops will need to renew their leases in 2018, and over 80% of them expect positive growth in re-lease rentals. However, the actual increase is temporarily unpredictable and the Group will continue to adjust its tenant mix appropriately. He also pointed out that Lee Gardens Phase III current office pre-rent rate of about 60%, commercial pre-leasing rate of about 70%, is expected in 2019 annual contribution of up to 300 million to 350 million yuan.

Li Yun-lian, chairman of the Group, is expecting a rise in rental prices in Central’s office sector due to strong demand from the Chinese capitalists. However, Causeway Bay will have to compete with other non-Central regions. She believes that tenants will not only consider the price but the overall environment.

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