Hang Lung earnings drop 14% as developer flags risks from tariff war, rates

Hong Kong developer Hang Lung Properties expects the city’s retail sector to remain sluggish this year amid a prolonged industry slump, while an unresolved tariff war with the US keeps businesses and consumers in mainland China in limbo.

“The recent trade disputes and escalating restrictions between the US and China have created uncertainties in the global economy,” chairman Adriel Chan said in a statement after reporting weak first-half results on Wednesday. This could stall interest-rate cuts, which could be detrimental to consumer spending and business expansion, he added.

The commercial landlord, residential developer and hotel owner said earnings fell 14 per cent year on year to HK$912 million (US$116.2 million) in the six months to June 30, while revenue declined 19 per cent to HK$4.97 billion. It trimmed total borrowings by 4.5 per cent to HK$54.8 billion from the end of last year.

Hang Lung owns shopping malls including The Peak Galleria on The Peak, Hong Kong’s most exclusive residential enclave, and Fashion Walk in Causeway Bay. Its major assets in mainland China, which include Grand Gateway 66 and Plaza 66 in Shanghai, contribute about two-thirds of the group revenue.

Hang Lung faced a blowback in consumer spending on both sides of the border in the first half. Retail sales in Hong Kong shrank for 14 straight months before rebounding in May. China’s real estate sector also struggled as households boosted savings despite various policies to spur spending amid concerns about the economy’s outlook.