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
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.
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.
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.
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.