Hang Lung’s chairman warns of turbulent times ahead for Hong Kong’s real estate as city finds itself squeezed between US and China

Hang Lung Properties, the first developer to post interim results during Hong Kong’s reporting season, warned of turbulent times ahead for the real estate market as the city increasingly finds itself caught in deteriorating relations between the United States and China.

“The US-China relationship is going to trump everything,” Hang Lung’s chairman Ronnie Chan Chi-chung said during the China Conference: Hong Kong organised by South China Morning Post. “Let’s not underestimate the madness with which the US wants to destroy mainland China, and by extension also Hong Kong, including our international financial service position. We have to be very careful.”

Hang Lung’s underlying interim net profit edged up 1 per cent to HK$2.22 billion (US$282.42 million) in the first half, while total revenue increased by 6.6 per cent to HK$5.3 billion. Rental income from property remained flat at HK$4.98 billion, while property sales rose to HK$316 million from zero a year ago.

Including a revaluation loss of HK$269 million on investment properties, net profit dropped 12.8 per cent to HK$1.95 billion from HK$2.24 billion a year ago, the company said.

“Will [mainland China’s cities] be locked down again in the future?” Chan said during a media briefing after Hang Lung’s results were announced, emphasising that the world is chaotic. “We do not know how the Covid-19 pandemic will develop. We do not know how US-China relations will develop.”

The issue is not the Russia-Ukraine war, but how the Western countries responded to the war, he said.