Hysan Development Company (14) H2 2025 earnings summary

Executive summary

• Turnover increased by 1.6% year-over-year, with underlying profit surging 28.3% due to fair value gains from Bamboo Grove disposals, outperforming the market.

• All core portfolios—retail, office, and residential—registered positive growth in turnover, with retail up 2.6%, office up 0.1%, and residential up 15.0% versus 2024.

• Retail tenant sales grew 8% year-on-year, with double-digit growth in the second half of 2025, supported by new luxury flagships.

• Office occupancy rate rose to 94%, and retail occupancy reached 95%, mitigating negative rental reversions.

• HK$8 billion five-year capital recycling program launched, with 26% achieved and HK$2.1 billion collected in 2025.

Financial highlights

• Turnover reached HK$3,464 million (+1.6% YoY); underlying profit HK$2,510 million (+28.3% YoY); recurring underlying profit HK$1,918 million (-1.9% YoY); reported profit HK$315 million.

• Shareholders' fund stood at HK$65.5 billion (-0.8% YoY); NAV per share at HK$63.7 (-0.9% YoY); DPS HK$1.08 (flat).

• Net gearing ratio at 32.4%; effective interest rate averaged 3.7% in 2025, down from 4.3% the previous year.

• Fixed-rate debt comprised 54% of total debt; average debt maturity at 2.8 years.

• Undrawn committed facility and cash totaled HK$14.3 billion, covering debt maturities for the next two years.

Outlook and guidance

• Management expects continued challenges in 2026 but remains confident in navigating changes and seizing opportunities.

• Lee Gardens rejuvenation, including Lee Garden Eight and new walkways, targets completion in 2H 2026, expected to boost retail traffic by over 20%.

• Retail and residential segments expected to benefit from tourism recovery and improved sentiment.

• Office demand anticipated to grow as financial sector recovers and IPO activity remains active.

• Focus remains on prudent financial management, capital recycling, and shaping Lee Gardens' future.