Hang Lung Properties Chairman Adriel Chan discussed the Hong Kong property market, noting a "bit more price discovery" and signs of recovery, particularly in residential and retail sectors. He highlighted strong occupancy and foot traffic in retail, suggesting a rebound in Hong Kong. However, Chan expressed that the office market continues to be weak, indicating that it is still finding its bottom.
While Hang Lung's underlying net profit declined 10% to HK$1.44 billion (US$184 million) in the first half of the year, and net profit attributable to shareholders decreased 17% to HK$758 million, revenue rose 23% to HK$6.11 billion. This revenue growth was driven by the handover of residential units in Hong Kong, including The Aperture. Home sales revenue surged over sixfold to HK$1.04 billion due to a recovery in Hong Kong's luxury property market. However, the development business saw a wider operating loss due to HK$124 million in non-cash impairment charges on slow-selling mainland residential projects like Heartland Residences in Wuhan.
Despite the headwinds, Hang Lung's office portfolio maintained strong occupancy rates, and rental pressure is viewed as cyclical, with expectations for improvement as market dynamics evolve. Hong Kong's residential market, across both high-end and mass segments, has shown positive performance, with hopes for continued momentum into 2026. Bloomberg Intelligence projects Hong Kong home prices to rise a total of 19% over 2026 and 2027, with an 11% surge in 2026, driven by strong mainland Chinese demand, limited supply, and robust rental growth. This forecast indicates the largest gain in nearly a decade, bolstered by factors like mainland Chinese buyers, declining new builds, and a hot rental market where yields for smaller apartments in April were higher than mortgage rates.
Chan described Hang Lung's overall performance as "relatively good" given China's uneven property recovery. While consumer spending started strongly, momentum faded in the second quarter. He remains "cautiously optimistic" that the full-year outlook "won’t be too bad." The company also announced a change in leadership, with a CEO-designate joining on September 7 to succeed Weber Lo on October 1, marking the end of Lo's eight-year tenure.
