Hongkong Land “uncertain” over COVID-19's full-year impact

The property firm has yet to determine how the prolonged pandemic will affect its performance.

SIngapore-listed Hongkong Land Holdings Limited has raised that uncertainty lingers over the prolonged pandemic, particularly on its impact on the Group’s full-year performance.

“The Group’s Investment Properties portfolio continued to demonstrate resilience in the period, underpinned by its high-quality tenant base and active lease management, whilst the Development Properties business benefited from improving market conditions on the Chinese mainland and in Singapore,” the group said.

Its balance sheet also remained “strong,” reporting a net debt of $5.59b (US$4.2b) as of March 2021, compared to $6.12b (US$4.6b) in 2020. Its committed liquidity is unchanged at $5.72b (US$4.3b).

The firm, however, saw a general decrease in rents in its Hong Kong central office portfolio since the start of the pandemic.

In March 2021, physical vacancy stood at 7.6% against 6.3% in the same quarter last year. Vacancy rate, on a committed basis, also rose to 6.8% from 5.9% in the same period.

This was offset by a modest increase in new office leasing activities, linked to improved sentiment and narrowing rental gap.

“The Group’s Central retail portfolio benefited from marginally better trading conditions in the quarter compared to the prior year, although luxury retail sentiment remains weak relative to pre-pandemic levels,” it added.

Physical vacancy in the sector rose to 1.7% during the quarter from only 0.3% in 2020; whilst vacancy on a committed basis inched up to 0.4% from 0.3%.

Meanwhile, its Singapore office portfolio saw a “mildly negative” outcome in rental reversions, which is expected to turn positive before end-June. Physical vacancy increased 7.9% from 2.1% in 2020, which was linked to the timing of new tenant occupancy.