Hongkong Land takes writedown on office properties, incurs US$582 million loss for FY2023

Hongkong Land's revaluation losses were mainly for its portfolio of investment properties in Hong Kong (Photo: Hongkong Land)

Hongkong Land Holdings, having taken a US$1.3 billion writedown, has ended FY2023 with a loss of US$582 million, versus earnings of US$203 million in the preceding FY2022.

The revaluation losses were mainly for its portfolio of investment properties in Hong Kong.

Underlying profit, which the company says is a more accurate view of its operational performance, was down 5% y-o-y to US$734 million.

Despite the poorer numbers, Hongkong Land plans to maintain a final dividend of 16 US cents, which will bring the full-year total to 22 US cents, the same as what was paid for FY2022.

Thanks to its luxury retail properties and Singapore office portfolios, Hongkong Land generated better earnings for its investment properties.

However, its development projects, most of which are in mainland China, fared poorer.

“Market conditions in the Group’s core markets of Hong Kong and the Chinese mainland are expected to remain challenging in 2024," says chairman Ben Keswick.

"While the resilience of our investment properties business provides the group with a solid base of recurring earnings, trading performance of the Hong Kong Central portfolio is expected to be lower, due to negative office rental reversions," he says.

"An improvement in development properties earnings is anticipated, however, based on planned project completions on the Chinese mainland and in South Asia," says Keswick.

"The group remains in a strong financial position, with a development pipeline of income-producing assets," he adds.

Last November, Hongkong Land announced the appointment of Michael Smith as the new CEO. Smith, whose previous role was regional CEO for US and Europe for Mapletree Investments, will start on April 1.

Keswick says he looks forward to Smith's contribution to the group’s future growth.

Hongkong Land's NAV as at Dec 31 2023 was US$14.49, down from US$14.95 at the end of 2022.

Hongkong Land shares ended March 7 at US$3.15, up 1.94%.