SWIREPROPERTIES net profit of HKD 6.7 billion in 2024

The established Hong Kong commercial real estate company Swire Properties has once again achieved a solid performance report.

On March 13, Swire Properties (01972.HK) released its 2024 performance report, indicating that despite a challenging market environment, the company's performance remains strong. Swire Properties is effectively implementing its long-term investment strategy, with a strategic investment plan of HKD 100 billion progressing well this year, having committed 67% of the funds to various projects.

This investment plan outlines a clear roadmap for Swire Properties' future business growth, establishing strategic expansion plans in Hong Kong, mainland China, and Southeast Asia. Swire Properties stated, "Our capital turnover strategy has been quite successful, maintaining our financial liquidity at a healthy level, which is beneficial for implementing the next phase of our investment plan."

The financial report shows that last year, Swire Properties achieved revenue of HKD 14.4 billion, with a profit attributable to shareholders of approximately HKD 6.7 billion. By the end of last year, Swire Properties' net debt ratio was about 15.7%, maintaining a low level of debt in the industry.

Rental income is the core source of revenue for Swire Properties and supports its robust performance through industry cycles. Last year, the total rental income from investment properties was HKD 13.316 billion.

As an important base for Swire Properties, despite the overall weakness in the Hong Kong office market, the company has maintained strong market competitiveness due to its high-quality property portfolio and successful community-building strategies.

Among them, the occupancy rate of Pacific Place is 95%, while the occupancy rates of Island East Centre and One Taikoo Place reached 94%. In response to the decline in renewal rental prices for office buildings, Swire Properties adopted a strategy to maintain occupancy rates, sacrificing prices appropriately, with rental income from Hong Kong office buildings contributing approximately HKD 5.1 billion last year.

Swire Properties noted that although there are slight signs of recovery in the Hong Kong financial market due to interest rate cuts and a moderate increase in initial public offering activities, the unclear economic environment and corporate cost-cutting measures hindered the growth of office space demand. It is expected that the Hong Kong office market will continue to be sluggish in 2025. Weak demand and a large supply will continue to exert downward pressure on rents.

However, Swire Properties believes that the trend of tenants pursuing office quality continues to be a key indicator for potential tenants when choosing office buildings, and new office buildings such as Two Taikoo Place and Six Pacific Place will benefit.

In addition, Swire Properties' successful community-building strategy continues to create vibrant office communities, along with prioritizing sustainability, health and safety, and the well-being of employees under tenants, which has been highly recognized by both existing and potential tenants.

Against this backdrop, Swire Properties stated that if the market rebounds, the office portfolio of Pacific Place and Taikoo Place, with its existing advantages, is expected to continue to be the preferred choice for office locations.

Regarding retail properties, last year, Swire Properties' rental income from Hong Kong retail properties was approximately HKD 6.4 billion, with nearly all of its shopping malls fully leased SWIREPROPERTIES pointed out that foot traffic and retail sales in Hong Kong's shopping malls will continue to face multiple challenges, particularly the trend of outbound travel and changes in tourist consumption patterns. "However, through our ongoing optimization of the tenant mix, strong marketing campaigns, and membership programs, we expect the foot traffic and sales performance of our malls to remain robust."

Looking ahead, SWIREPROPERTIES Chairman Adrian Cheng stated that in the short term, the Hong Kong office market is likely to remain soft, while retail sales in mainland China are expected to gradually recover.

In the remaining time of this year, SWIREPROPERTIES will focus on implementing growth plans for various businesses while strengthening the resilience of its existing property portfolio