Swire Properties bags 7% increase in gross rentals, hits HK$5bn

Hong Kong office occupancy got better, meanwhile.

In 1H14, Swire Properties’ gross rentals rose 7% y/y to HK$5.0bn, 5% ahead of Barclays’ estimates.

According to a research note from Barclays, with the improved expenses ratio, net rental income rose 8% to HK$4.2bn, 7% above estimates.

By segment, Hong Kong office occupancy improved slightly from 96% at end-2013 to 97% as of June 2014.

Here’s more from Barclays:

However, Pacific Place office’s rental revisions further slowed to 5% in 1H14, from 27% in full-year 2013 and 8% in 1Q14.

Management expects the Central office rents to remain at the current level.

Similar to the feedback from Champion REIT, Swire Properties indicated that Mainland Chinese companies are taking more space in the Central district.

Other Hong Kong office properties recorded rental revisions of 13-27% in 1H14.

Rental revision at Hong Kong retail malls were positive in 1H14 with occupancy remaining at 100%.