By ZHANG Xilong
Hong Kong portfolio operator Wharf Real Estate Investment Company, a subsidiary of Wheelock and sister company of Wharf Holdings, had a bad year. The company saw a net loss of 8.94 billion yuan (US$1.3 billion, HK$10 billion) in 2022.
Wharf owns Harbour City and Times Square, two shopping malls in the busiest parts of Hong Kong. Once a ready source of money, the properties became liabilities during the pandemic. Wharf saw a 5.6 billion yuan profit in 2021, last year, it lost 7.2 billion yuan.
The income of Harbour City was largely the same as the year before, with occupancy of shops at 94 percent, which chairman Stephen Ng considered “low”. Times Square’s revenue last year went down 12 percent.
Wharf’s predicament is only the tip of the iceberg as Hong Kong’s real estate withers. Vacancies in office buildings reached a new high last year, with average rent down 5 percent year-on-year. The trading volume of offices in 2022 was only about half of 2021’s.
“New companies didn’t have a chance to come to Hong Kong so the office building market looked bleak,” Ng said. “Hopefully things will turn around this year with borders open.”
The value of retail sales in January went up 7 percent year on year to 36 billion yuan, the highest since January 2020. Morgan Stanley expects retail sales in Hong Kong to recover to 95 percent of the 2018 level by the end of this year.
