SINGAPORE (July 26): Hongkong Land, a member of the Jardine Matheson Group, reported earnings of US$455 million ($619 million) for the 1H18 ended June, compared with US$470 million in 1H17.

The developer says results from the group’s investment properties were higher, due to positive rental reversions in Hong Kong, while profits from development properties were lower, due to the timing of sales completions in mainland China, partially offset by a higher contribution from Singapore.

Hong Kong’s Central office leasing market continues to benefit from tight supply. At the end of June, the group’s Central office vacancy was 1.9%, compared with 1.4% at the end of 2017. Rental reversions in the portfolio remained positive.

The group’s average office rent rose to HK$111 psf, compared to HK$106 psf and HK$109 psf in the 1H17 and 2H17, respectively. The group’s Central retail portfolio effectively remains fully occupied, with mildly positive rental reversions.

The average retail rent increased to HK$231 psf, compared with HK$224 psf and HK$225 psf in in the 1H17 and 2H17, respectively. The value of the group’s investment property portfolio in Hong Kong increased by 2%, due to the impact of higher open market rents.

In mainland China, fewer sales completions in the period resulted in a lower profit contribution, while the group’s attributable interest in contracted sales was lower due to fewer sales launches.

The attributable interest in contracted sales in mainland China was US$650 million in the 1H18, compared to US$701 million and US$411 million in the 1H17 and 2H17, respectively.

In Singapore, the group recognised profits on the completion of the 1,327-unit Sol Acres executive condominium development. In addition, it benefited from profit recognised on the percentage of completion of sold units to date at the 710-unit Lake Grande project, which is on schedule for completion in 2019. The 309-unit Margaret Ville project was launched for sale in May 2018. In April 2018, the group was successful in a conditional joint tender for the en-bloc acquisition of Tulip Garden, a freehold residential site, for redevelopment. The project will comprise 670 mid-rise apartments with a developable area of 47,000 sqm.

The directors have declared an unchanged interim dividend of US 6 cents per share.

In its outlook, Hongkong Land says the strong performance from the group’s investment properties is expected to continue in the second half of the year, while the contribution from development properties will benefit from higher sales completions in mainland China.

Year to date, shares in Hongkong Land are up 1.3% at $7.15.