Located at the heart of Causeway Bay with direct access to the MTR station, Hysan Place showcases an enviable selection of nearly 120 most sought-after international brand boutiques spanning over 17 floors.

Located at the heart of Causeway Bay with direct access to the MTR station, Hysan Place showcases an enviable selection of nearly 120 most sought-after international brand boutiques spanning over 17 floors.

Tenants of Hysan still can afford the flagging retail sector to support the property developer gain more profit

Hysan Development (0014.HK) said its diversified tenant mix would continue to insulate the firm from the flagging local retail sector. Turnover from its retail portfolio rose 7.3 percent to HK$1.8 billion in 2014, with all premises let compared to 96 percent in 2013. Average rental of renewed and new leases rose 50 percent.

That partly helped underlying profit grow 5.9 percent to HK$2.16 billion from 2013, in line with expectation. Net profit fell 20.4 percent to HK$4.9 billion, reflecting a smaller fair value gain on its investment properties.

“Lee Gardens have always had a balanced exposure. Only one-third of customers were mainland tourists. So the performance has been stable,” said chairman Irene Lee Yun-lien, referring to the impact of such visitors on local retailers. Tenants of Hysan, the largest landlord in Causeway Bay, saw a 22 percent growth in overall sales, but that would have been single digit without hot sales of Apple’s latest iPhones.

Chief executive Lau Siu-chuen sees tenant demand this year being driven by emerging brands and those who could not afford sky-high rents years ago, with expansion of top-notch retailers set to slacken. In the office segment, revenue climbed 4.7 percent to HK$1.14 billion. Contracts were signed or renewed at an average 17 percent higher rents. For leases renewed this year, rentals rose 10-20 percent in retail space and up 10 percent at offices from three years ago.

Hysan’s net debt to equity ratio dropped to 4.2 percent in 2014.

“With a strong balance sheet, Hysan is now well positioned to seek opportunities beyond our core portfolio in Causeway Bay,” the firm said.

Source: The Standard Finance

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