Sun Hung Kai Properties 2023/24 Interim Results Announcement
Sun Hung Kai Properties Limited (SHKP) today announced its 2023/24 interim results.
During the period under review, the Group faced the challenges of an uncertain economic outlook and a high-interest rate environment, which had an impact on business development. In the face of the challenging macro environment, the Group placed great emphasis on cash flow management and prudent financial discipline, including maintaining a tight control on capital expenditure and being highly selective in land bank replenishment. These measures, coupled with the Group’s robust and sizeable recurring income generated from a quality property investment portfolio and non-property businesses, have helped put the company in good stead to withstand adverse economic conditions.
During the period, SHKP launched YOHO WEST Phase 1 in Tin Shui Wai, NOVO LAND Phase 2A in Tuen Mun and University Hill near The Chinese University of Hong Kong for sale. The units were very well received, reflecting buyers’ continued strong confidence in SHKP’s developments. As always, the Group will launch new projects for sale when they are ready. Over the next 10 months, major Hong Kong projects on offer will include The YOHO Hub II in Yuen Long, the third phase of NOVO LAND in Tuen Mun, the second phase of YOHO WEST, the first phases of Cullinan Sky and Cullinan Harbour in Kai Tak, and the first phase of a large-scale project in Sai Sha near Ma On Shan. The Group will also put up for sale its unsold completed residential units and some of its non-core properties, including the renovated Dynasty Court in Mid-Levels. On the mainland, a new phase of Shanghai Arch in Shanghai and new batches of the joint-venture development Hangzhou IFC will be put on the market for sale.
The Group’s diversified property investment portfolio remained a reliable source of substantial recurring income. Many of the Group’s offices and shopping malls are part of an integrated project, complementing each other and benefitting from transport interchanges and large-scale residential developments in the vicinity. In addition, the Group’s leasing teams stay up-to-date with market trends and regularly refine the trade-and-tenant mix of the malls to keep abreast of customer needs.
The Point, an integrated loyalty programme for SHKP malls, has recently revamped its mobile app. A new service called Instant Point Earn was introduced to further enhance shoppers’ experience, drive footfall and boost tenant sales. Furthermore, pet- and family-friendly facilities were introduced to boost traffic and expand the customer base, and the indoor and outdoor areas refurbished to suit customer preferences. For office buildings, the Group has consistently pursued asset and service enhancements, ensuring they meet stringent international and local corporate environmental requirements. Over the years, many of our office buildings have attained top ratings of green-building certifications.
The Group is growing its property investment portfolio to bolster recurring income base. The Group’s serviced-apartment project, TOWNPLACE WEST KOWLOON, soft opened in October 2023. Market response to the first batch of rooms was encouraging with many young professionals from the mainland and abroad being attracted to the hybrid short- and long-term leasing model. Including this development, the Group’s portfolio of serviced apartments now provides a total gross floor area of over 1.2 million square feet. They offer diverse types of lodging in various locations, catering to different accommodation needs of incoming talents from different parts of the world.
YOHO Mix, an extension of the Group’s flagship YOHO Mall in Yuen Long, and the shopping mall beneath The Millennity in Kwun Tong are scheduled to open in 2024. In the medium term, the High Speed Rail West Kowloon Terminus Development and the Artist Square Towers Project will join the Group’s ICC and two luxury hotels to form a unique commercial cluster in Hong Kong. With its proximity to the West Kowloon Cultural District, exceptional transport connectivity, and business opportunities brought by an increasing number of visitors using the high-speed rail, this commercial cluster is expected to become a distinctive hub in the Greater Bay Area and will offer a wide range of commercial, retail, cultural and entertainment options.
On the mainland, Nanjing IFC is the Group’s third IFC complex. The mall within the complex had a soft opening in January this year with a positive response from the market. Serving as a unique one-stop destination for shopping, entertainment and leisure, the mall houses a selection of top-tier brands, including some that are new to Nanjing. The business of the Andaz Nanjing Hexi hotel at Nanjing IFC has been steadily growing since its opening in April 2023. Meanwhile, construction is currently underway for Hangzhou IFC, another integrated landmark project by the Group that upholds the IFC brand of excellence. The final phase of its residential portion was sold out in August 2023. In Shanghai, the flagship ITC Maison mall will open in phases starting from 2025 onwards.
Prudent financial management is an important pillar underpinning the Group’s sustainable growth. The Group has placed great emphasis on cash flow management. As at the end of 2023, the Group’s Hong Kong contracted sales yet to be recognized amounted to HK$32.8 billion. Among this, about HK$22.4 billion is expected to be recognized in the second half of this financial year. In addition, the Group will further strengthen its recurring income stream and continue its proactive leasing management to strengthen the competitiveness of its property investment portfolio. At the same time, the Group remains dedicated to delivering premium properties and professional services in an efficient and cost-effective manner. A number of measures have been implemented to control construction costs without compromising on quality. The overall construction expenditure for its Hong Kong projects has already reached its peak and is expected to come down in the next few financial years.
Looking ahead, Hong Kong will continue to benefit from robust institutional frameworks, a sound common law system, a simple and low tax regime, free flow of capital and a well-functioning exchange-rate system under ‘One Country, Two Systems’. These enduring advantages, coupled with a pool of professionals, are difficult to replicate and have supported Hong Kong’s prominent position as a major international financial centre. The legislation of Article 23 of the Basic Law is now underway. This, together with the National Security Law, will bring safety, stability, and a favourable business environment to Hong Kong. With the support of the motherland, Hong Kong will continue to thrive as a global connector. The Group has strong confidence in the long-term prospects of both the mainland and Hong Kong.
For over half a century, SHKP has navigated through the ups and downs alongside Hong Kong, and has overcome various challenges, including the Asian financial crisis and global financial crisis. With an unwavering commitment to quality, the Group has established itself as a trusted brand while continuously pursuing innovation. Supported by seasoned management, a dedicated team of staff, prudent financial discipline, agile business strategies and strong execution ability, our Group is poised to continue delivering premium properties and services in Hong Kong and on the mainland, meeting the diverse needs of our customers.
SHKP reaches a new milestone in green construction
Sun Hung Kai Properties Limited (SHKP) today announced the purchase of nine pieces of electric construction equipment to replace their diesel counterparts. This crucial move towards decarbonisation marks a key milestone in green construction and sets an example for the construction industry. To commemorate it, a ceremony was held today, with David Lam, Under Secretary for Development, and Thomas Ho, Chairman of the Construction Industry Council as officiating guests.
Speaking at the ceremony, SHKP Executive Director Adam Kwok said: “SHKP has committed substantial resources to reducing carbon emissions and promoting sustainable development. Electrification on construction sites is an important component of the Group’s carbon-reduction strategy. Through the procurement of nine pieces of electric construction equipment, we strive to create a ‘triple-win’ scenario benefitting the environment, the industry, and our construction workers. Our collective efforts will contribute to making Hong Kong a greener, low-carbon city.”
Kwok emphasized that while most construction equipment relies on diesel engines, the new equipment operates on cleaner electric power, and has superior energy conversion efficiency. The replacement is estimated to lead to an annual reduction of approximately 240 tonnes of carbon emissions, equivalent to planting over 10,000 trees. Alongside the Group’s green construction initiatives in five areas, the acquisition exemplifies SHKP’s active support of HKSAR Government’s Climate Action Plan 2050, which envisions a Zero-carbon Emissions‧Liveable City‧Sustainable Development.
He hoped the move would encourage other industry players to use more green building equipment. He also noted the use of electric equipment eliminates diesel combustion, effectively reducing emissions and noise levels on construction sites, and would provide frontline workers with a cleaner and healthier work environment.
The nine pieces of electric construction equipment are of three types: five truck cranes, two truck mixers and two trailer pumps. Some have already been put to use in SHKP projects, including the mega project at Sai Sha near Ma On Shan, the Hong Kong Business Aviation Centre in-situ expansion, and the projects in Kwu Tung and So Kwun Wat.
All the equipment is produced by SANY Group, a mainland construction machinery company. Liang Zaizhong, Rotating Chairman of SANY Group, said: “In response to the HKSAR Government's ‘Energy Saving and Green Building’ initiative, SHKP and SANY Group are working together to promote electrification and new energy equipment in more scenarios. Today’s ceremony signifies a new milestone in our collaboration, as we aim to further develop SANY’s new energy equipment in Hong Kong. Together, we are contributing to the HKSAR Government’s goal of achieving carbon neutrality outlined in the Climate Action Plan 2050.”
SHKP has spared no effort in promoting green building
One of the largest developers in Hong Kong, SHKP is committed to Building Homes with Heart and actively supports sustainable development through a multi-pronged approach. Green initiatives are being implemented across five major areas of construction:
1. Adopting Green Smart Technologies
SHKP’s projects adopt green smart technologies from design and construction to facility management. These technologies include Modular Integrated Construction (MiC), Multi-trade integrated Mechanical, Electrical & Plumbing (MiMEP), Design for Manufacture and Assembly (DfMA), Internet of Things (IoT), and Building Information Modelling (BIM). Notably, BIM enables the precise calculation of construction materials, thus reducing unnecessary building waste.
Thanks to these advanced technologies and other measures, several of the Group’s commercial projects have achieved Leadership in Energy and Environmental Design (LEED) Platinum certification. Prominent examples include the International Commerce Centre (ICC), Sun Hung Kai Centre, One IFC and Two IFC. As of June 2023, SHKP had received 122 green-building-related certificates for 105 Hong Kong projects.
2. Developing Green Energy Infrastructure
SHKP is building one of Hong Kong’s largest solar energy networks. Nearly 15,000 solar panels had been installed by the end of last year across various locations, totalling an area of approximately 400,000 square feet. This extensive network is expected to result in an annual reduction of approximately 2,700 tonnes of carbon emissions, equivalent to planting more than 117,000 trees. In addition, the Group has installed battery energy storage systems on construction sites to power electric machinery.
3. Research and Innovation in Green Building Technologies
Through collaboration with enterprises, universities and research institutions, SHKP aims to enhance the efficiency and scale of emissions reduction. The Group has partnered with The Hong Kong Polytechnic University to conduct research in three areas: green applications, green building materials and green construction processes. The research on the injection of carbon dioxide into concrete is anticipated to yield results in 2025.
4. Supply of Green Building Materials
SHKP’s subsidiary, Glorious Concrete, is providing the industry with low-carbon, ready-mixed concrete with CIC Green Product Certification. This includes four types of Platinum-grade Ground Granulated Blast-furnace Slag (GGBS) concrete.
5. Training Green Building Talent
SHKP has established Sanfield Construction Innovations Limited, a company comprised of experienced engineers and professionals specializing in information technology and digital transformation. It takes a leading role in advocating for the adoption of environmentally friendly and energy efficient technologies. Together with the four areas mentioned above, the Group actively promotes the transformation of the operation on its construction sites.
Looking ahead, SHKP will continue to invest in green construction and purchase more equipment that uses clean energy sources to help Hong Kong transform into a greener, low-carbon city.
SHKP-Kwoks’ Foundation continues to support talented students from The Chinese University of Hong Kong
The SHKP-Kwoks’ Foundation has been supporting a scholarship programme that subsidizes outstanding local and mainland students with limited means to pursue undergraduate studies at The Chinese University of Hong Kong (CUHK) since 2005. Recently, Professor Anthony Chan, a Pro-Vice-Chancellor and Vice-President of CUHK, visited the headquarters of Sun Hung Kai Properties (SHKP) with academic staff and scholarship recipients to share the latest updates on the programme with SHKP-Kwoks’ Foundation Executive Director, Amy Kwok.
Ms Kwok said: “The SHKP-Kwoks’ Foundation adheres to the Group’s belief in Building Homes with Heart, and has been dedicated to supporting exceptional students from underprivileged families, enabling them to fully concentrate on their studies with the hope of having a bright future after graduation. SHKP hopes that the beneficiary students will cherish the opportunity to study at CUHK, develop a global perspective and contribute back to society in the future.” She said she looked forward to maintaining the collaboration with CUHK to nurture more talent for the country and Hong Kong.
Professor Anthony Chan expressed his gratitude to the Foundation for its support over the years, which has helped groom many high-calibre talent and contributed to Hong Kong’s advancement. He emphasized the importance of grooming more talent in light of the numerous opportunities presented by the country's Belt and Road Initiative.
During the meeting, the students conveyed their deep appreciation for the scholarships, which greatly relieved the financial burdens on their families and helped them achieve a better balance between academic work and extra-curricular activities. They expressed their aspirations to make meaningful contributions to society in the future. Lee Ka-wai, a medical student, recently went to Guangxi to provide medical assistance to Thalassaemia patients. Another medical student Chan Sau-yee said that the scholarship allowed her to dedicate more time to social services and research projects. Notably, her experience as an assistant in a public hospital made her acutely aware of the significance of empathy.
Since its establishment over 20 years ago, the SHKP-Kwoks’ Foundation has initiated more than 85 charitable projects, benefitting over 70,000 people in 29 provinces and cities across the country.