OREANDA-NEWS. March 19, 2013. Swire Properties Limited announced adjusted underlying attributable profits of HKD 6,932 million for 2012, a 58.6% increase from HKD 4,372 million in 2011.

Gross rental income of the Company’s investment property portfolio increased by 5.4 % to HKD
9,015 million in 2012. In Hong Kong, there were positive rental reversions in the office portfolio throughout the year. Occupancy levels remained high despite a slowdown in leasing activity. Demand for retail space in Hong Kong continued to be robust in 2012. In Mainland China, the TaiKoo Hui development in Guangzhou made its first full year rental contribution in 2012, after its completion in the second half of 2011.

Net rental contributions from Sanlitun Village improved from 2011, reflecting active management of the tenant portfolio, cost reductions and capital expenditure designed to enhance footfall and circulation.

Profits from property trading were HKD 1,834 million in 2012. These principally arose from the completion of the sale of 98 units at the AZURA residential development in Hong Kong
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Despite improved performances from the managed and non - managed hotels in Hong Kong, the hotel  operations recorded a lower underlying profit due to pre - opening expenses at the Mandarin Oriental in TaiKoo Hui and EAST, Beijing at INDIGO.

In December 2012, Swire Properties agreed to acquire eight residential units at Hampton Court, 2 Draycott Park in Singapore as investment properties.

In January 2013, Swire Properties and Bal Harbour Shops entered into a joint venture agreement to develop the retail component of Brickell CityCentre in Miami, Florida, U.S.A. In March 2013, the company which owns the existing Citygate Outlets development at Tung Chung in Hong Kong (in which the Group has a 20% equity interest) won a tender to develop an adjacent commercial site.

Swire Properties Chairman Christopher Pratt commented on the company’s prospects: “We are cautious about the outlook for office properties in Hong Kong in 2013. Demand from financial services companies for office space in Central is likely to remain soft, although rents at Pacific Place are expected to prove fairly resilient due to high occupancy. At Island East, rents are expected to remain robust owing to high occupancy and continued demand. Despite slower growth in the second half of 2012, the Hong Kong retail market is expected to continue to benefit from local economic growth and from tourists from Mainland China. Demand for retail space, particularly at prime locations, continues to be strong. Rents are expected to continue to increase.”

He added: “Demand for office space and rental rates are expected to remain stable in Mainland China in 2013. There has been some reduction in consumer confidence and lower growth in spending in Mainland China, but retailers of internationally branded goods in the few high quality shopping malls remain popular. Retail rents are expected to be steady in 2013. Profits from property trading in Hong Kong are expected to be lower in 2013 than in 2012, but nevertheless significant, with the completion of the ARGENTA development and the expected sale of the remaining units at the AZURA development.

The effect of substantial increases and other changes in Hong Kong stamp duty on demand for luxury residential properties is uncertain. In the USA, the residential market in downtown Miami is expected to continue to improve in 2013. Excess condominium supply has been largely absorbed and new condominium developments are being built.

In 2013, the hotel operations will benefit from the fact that EAST, Beijing will be in operation for its first full year and from a contribution from the Mandarin Oriental in TaiKoo Hui, Guangzhou”