Hysan Development Company (14) H2 2024 earnings summary

Executive summary

• 2024 marked a major milestone as the group celebrated its centenary, focusing on rejuvenating Lee Gardens with luxury retail, premium dining, and cultural facilities, and expanding the precinct by 30% with Lee Garden Eight.

• Strategic growth in Shanghai saw 70% office space commitments and new recurring income, with high occupancy in the Greater Bay Area.

• Diversification into flex office, healthcare, and cultural initiatives, including a five-year MOU for Lee Garden Eight’s performing arts facilities, supported resilience.

• Major projects, including Lee Garden Eight and an integrated walkway system, are on track for completion by 2026.

• Over 210 campaigns and events, plus a new loyalty app, drove digital engagement and increased member spending.

Financial highlights

• Group turnover rose 6.2% year-over-year to HK$3,409 million, led by retail and Shanghai contributions.

• Hong Kong retail turnover grew 9.5% to HK$1,684 million, with 92% occupancy and positive rental reversion.

• Office turnover declined 1.5% to HK$1,440 million, but occupancy remained stable at 90%.

• Residential turnover increased by 6.3% to HK$218 million, with occupancy up to 73%.

• Shareholders' funds and NAV per share declined by 1.8% and 1.7%, mainly due to non-cash fair value adjustments.

Outlook and guidance

• Management remains cautiously optimistic, focusing on financial discipline, steady dividends, and future-proofing the portfolio.

• CapEx outflows are expected to tail off as major projects, including Lee Garden Eight and connectivity bridges, complete by H2 2026.

• Early 2025 saw a mid-single-digit year-on-year increase in tenant sales and footfall, with expectations for continued improvement if market sentiment holds.

• Strategic focus remains on portfolio rejuvenation, tenant mix optimization, and capturing growth in the Greater Bay Area.

• Ongoing expansion in Shanghai and the Greater Bay Area to drive recurring earnings.