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Hong Kong property
Business

Hong Kong mall and office landlord Wharf Reic says unless economy recovers quickly, situation will be ‘difficult to deal with’

  • Prospects for this year are ‘very cloudy’, chairman says
  • Wharf Reic’s underlying net profit for last year decreased by 13 per cent, to pay second interim dividend of 64 Hong Kong cents per share

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Wharf’s Harbour City shopping centre in Tsim Sha Tsui. Footfall at shopping centres suffered a big drop in the first two months of this year, says Stephen Ng, the company’s chairman and managing director. Photo: Nora Tam
Lam Ka-sing
Wharf Real Estate Investment Company (Wharf Reic), which owns the Harbour City and Times Square shopping centres in Hong Kong, said it expected business to be difficult amid Hong Kong’s most serious Covid-19 outbreak yet.
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Footfall at shopping centres suffered a big drop in the first two months of this year, while a downward pressure on office rents will continue unless the economy recovers, Stephen Ng, the company’s chairman and managing director, said during a briefing on Thursday.

“Originally, we hoped that starting from this year, the downward trend would stabilise. But very unfortunately, since the week after Lunar New Year, this fifth wave outbreak has had a more serious economic impact than any wave before,” he said. “So, the prospects for this year are, so far, very cloudy.”

Ng’s comments came after Financial Secretary Paul Chan Mo-po said in his budget briefing last week that small and medium-sized enterprises (SMEs) in certain sectors will be allowed to defer rent payments by up to six months. The Real Estate Developers Association of Hong Kong failed to reach a consensus with the government on the policy in an online meeting on Tuesday.

04:19

Hong Kong reimposes tough Covid-19 restrictions in bid to ward off fifth pandemic wave

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Wharf Reic’s underlying net profit for the year ending on 31 December, 2021 decreased by 13 per cent to HK$6.5 billion (US$834 million), compared with about HK$7.5 billion in the previous year, according to its exchange filing on Thursday. In lieu of a final dividend, a second interim dividend of 64 Hong Kong cents per share would be paid, the company said.

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The speed and scope of the rent deferral legislation, such as the definition of SMEs, remained uncertain, Ng said. He pointed out that many of Wharf Reic’s tenants were larger than the company in scale.

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