Green light for Wharf Holdings to list malls separately

Hong Kong landlord The Wharf Holdings has unveiled plans to spin off its top two shopping malls as a separate stock-exchange listing.

It intends to list Harbour City and Times Square under a new entity, Wharf Real Estate Investment Company, and says the proposal has already been approved by The Hong Kong Stock Exchange although permission for the listing has yet to be granted.

Several other retail and commercial properties will be included in the new company, which The Wharf says would have a valuation of about HK$230 billion (US$29.4 billion) and annual turnover of $13 billion.

The demerger will leave The Wharf Holdings mainly comprising commercial properties in China.

Meanwhile, the group’s half-year results show a 22 per cent year-on-year rise to $7.27 billion.

Core profit from properties advanced by 28 per cent to $7.1 billion, representing 98 per cent of the group total, compared to 92 per cent for the same time last year.

While mainland properties rose by 75 per cent to $1.9 billion, Hong Kong’s growth was 17 per cent to $5.2 billion.

Revenue from the group’s Hong Kong malls grew by 4 per cent to $6.6 billion while operating profit rose by the same percentage to $5.9 billion.

Harbour City

Overall revenue for Harbour City (excluding hotels) also grew by 4 per cent, to $4.6 billion and operating profit by 5 per cent to $4.1 billion. Retail revenue grew by 5 per cent to $3.2 billion from an occupancy rate of 96 per cent.

Harbour City outperformed the market with a 2.8 per cent growth in tenant sales.

As well as new additions, including BA & SH, John Hardy and Mr & Mrs Italy, the mall had Hong Kong debuts from Adore, Eres, Eve Lom, Little Mo & Co and Yves Salomon, plus Kowloon debuts by Laurel, St John and Tsuta. Pop-up stores included Chaumet, Chloe (exclusive), Coach (exclusive) and Estee Lauder/Tom Ford.

In F&B, The Cheesecake Factory made its Hong Kong debut in May, while four outlets were included in the Michelin Guide Hong Kong/Macau 2017 – China Tang, Epure, Sushi Tokami and Ye Shanghai. Openings included the Hong Kong debut of traditional Tainan restaurant Du Hsiao Yueh.

Times Square

Times Square hong kong

For Times Square, overall revenue and operating profit both edged up 1 per cent, to $1.4 billion and $1.2 billion respectively, with an occupancy rate of 96 per cent.

However, its retail revenue retreated by 2 per cent to $1 billion notwithstanding a “modest” increase in passing rent. The decline was primarily because of the lettable area being reduced by 4 per cent because of shop amalgamation by two new anchors, Facesss and the Lego Certified Store, as well as ongoing tenant mix reshuffling, says The Wharf. There was a 4.3 per cent decline in tenant sales for the period.

Kids Square was established on 13A floor, and the 9th floor and part of the floor above were converted into a lifestyle hub. New additions included BA & SH, John Masters Organics (Hong Kong debut), Michael Kors and Proteca & Ace.

Plaza Hollywood, with 97 per cent occupancy rate at the end of June, saw revenue growth of 6 per cent to $287 million and operating profit rise by 8 per cent to $228 million.

High occupancy and positive rental reversions underpinned steady performances for both Crawford House and Wheelock House. The retail spaces at Crawford House (including Zara’s largest flagship) were 96 per cent occupied.

China

Chengdu International Finance Square, IFS, Wharf Holdings

For China, despite unfavourable currency movements, revenue grew by 4 per cent to $1.2 billion and operating profit by 6 per cent to $732 million.

With an occupancy rate of 99 per cent, there was a 15 per cent leap in overall revenue to $508 million and 24 per cent jump in operating profit to $259 million for Chengdu International Finance Square (IFS).

Retail revenue was up 18 per cent to RMB367 million (US$55 million). Tenants’ sales burgeoned 30 per cent while foot traffic grew by 22 per cent. The tenant mix was further optimised with new FJAllraven, Nike Jordan, Onitsuka Tiger and Vacheron Constantin stores.

Chengdu Times Outlet, with a 73 per cent occupancy rate, had 11 per cent retail sales growth for the six months, while Shanghai Times Square had an occupancy rate of 97 per cent.

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