Hong Kong-headquartered mall operator Hang Lung Properties has overcome the regional economic headwinds to report a solid increase in revenue from its core leasing business.
Hang Lung, which owns eight Mainland China shopping centers carrying the 66 brand, along with The Peak Galleria, Fashion Walk and Amoy Plaza in Hong Kong, achieved a 2 percent rise in rental revenues during the first half year, despite a 6 percent period-on-period Renminbi (RMB) depreciation
“We have sustained solid growth in our core leasing business in the first half of 2019 despite the uncertainties in the global economy,” said Ronnie C Chan, chairman of Hang Lung Group and Hang Lung Properties.
“The growth momentum of our leasing portfolio, especially at our mainland properties reflected effective measures taken to improve our tenant mix and enhance facilities and customer services.
“Our properties outside of Shanghai have achieved remarkable revenue growth of 14 percent, while our investments in asset enhancement in Shanghai are paying off handsomely, as evident from the strong performance of Plaza 66.”
He said the progressive completion of the major renovation at the Grand Gateway 66 mall in Shanghai this year is expected to deliver a similar boost in revenue and a number of new properties will commence business in the second half of this year.
Revenue from the eight mainland malls rose by 8 percent to RMB 1.479 billion (US$214.8 million) for both Hang Lung Properties and Hang Lung Group. The asset enhancement initiatives at Grand Gateway 66 caused a short term disruption of rental income, while the properties outside of Shanghai achieved 14 percent revenue growth.
In Hong Kong, the company said the performance of its core leasing properties was stable.
Combined revenue at Hang Lung Properties and Hang Lung Group both recorded growth of 3 percent, to HK$2.014 billion and HK$2.096 billion, respectively.
The company said that while the US China trade dispute shows no sign of abating, the group remains cautiously optimistic its business will deliver sustainable growth in both Hong Kong and the mainland.