【1997 Performance】Kowloon Properties for the full year reported a net loss of HKD 4.26 billion, with basic net profit increasing by 5%. Dividends rose by 10% to HKD 0.66 per share.

Kowloon Development (01997)
Announces full-year results. Kowloon Development’s net profit increased by 5.2% to HKD 6.46 billion last year. After accounting for a net revaluation deficit of HKD 10.58 billion on investment properties, the company recorded a turnaround from profit to loss, with a group attributable loss of HKD 4.26 billion, compared to a profit of HKD 0.89 billion in the same period of 2024. Earnings per share were a loss of HKD 1.4. The second interim dividend increased by 10% to HKD 0.66 per share.

During the period, Kowloon Development’s revenue was HKD 12.82 billion, a decrease of 0.8% year-on-year. Investment property income declined by 1.4% to HKD 10.65 billion, while hotel revenue increased by 5.8% to HKD 1.63 billion. Within the investment property and hotel segments, Harbour City (including hotels) saw total revenue rise by 1.4% to HKD 9.22 billion. Development property revenue fell by 23.7% to HKD 120 million.

Investment properties are reported at an independent valuation of HKD 211.7 billion, reflecting a 5% revaluation deficit of HKD 10.59 billion.

Harbour City’s overall revenue and operating profit rise by 1%

Harbour City’s total revenue and operating profit (including hotels) both increased by 1%. The year-end occupancy rate was 92%. Office leasing occupancy was 91%.

Kowloon Development mentioned that Louis Vuitton’s flagship store in Harbour City has expanded to four floors, including a new VIP-only level. Chanel Beauté has also expanded its stores at Gateway and Ocean Centre. CANALI, Locanda CANALI, and Bacha Coffee opened Hong Kong’s first concept stores combining cafes and retail. Several mainland brands are expanding into Harbour City, including Lao Pao Gold, while fashion brand Urban Revivo, high-end cosmetics brand Mao Geping, and Michelin-recommended Xiang cuisine restaurant Xiang Shang Xiang have opened their first stores in Hong Kong.

Times Square’s overall revenue drops by 10%

Times Square’s total revenue declined by 10%, with operating profit down by 14%. The year-end occupancy rate was 95%. Office leasing occupancy remained at 90%.

However, the office leasing environment is becoming increasingly challenging, with demand mainly for smaller units. New supply in Causeway Bay and the abundance of low-priced options in non-core areas further pressure the market. The group continues to maintain constructive communication with tenants and tailor leasing solutions based on individual needs.

Debt ratio decreases to 17.2%

Kowloon Development stated that in a challenging external environment, asset values continue to decline. The group maintains strict financial management, with net debt and debt ratio further decreasing to HKD 32 billion and 17.2%, respectively. Benefiting from lower interest rates and reduced debt, borrowing costs decreased by 32%.

Kowloon Development indicated that 2026 has just begun, and more explosive disruptions are expected. The Russia-Ukraine conflict has lasted four years, the Gaza conflict has been ongoing for nearly two and a half years, and the latest Iran conflicts could evolve into the most destructive chaos in the Middle East. Venezuela, Cuba, and Greenland are also facing threats. The US dollar is no longer a “safe haven,” with gold prices soaring. The US Supreme Court’s rulings on tariffs seem to have opened a new Pandora’s box.

Looking ahead, geopolitical risks and trade tensions remain key variables for the global economic outlook. The world’s turmoil continues to intertwine, while Hong Kong’s recovery is progressing gradually. As financial markets rebound and sentiment improves, coupled with potential US rate cuts, a more favorable business environment is expected.

The retail and hotel sectors are expected to benefit from renewed consumer confidence and a series of major events. Growth momentum is building, but local and regional competition remains fierce. Turning this momentum into sustained revenue growth will take time. In the office sector, although leasing activity is picking up, a surge in new supply in the short term will pressure occupancy rates and rental levels. Facing this turbulent environment, the group will continue to maintain low leverage and sound financial health, while cautiously responding to challenges and actively seeking development opportunities.

Source: Kowloon Development Announcement