[True Insight Institutional View] Swire Pacific (00019.HK): Significant improvement in mainland retail sector

$SWIRE PACIFIC A(00019.HK) As of the fourth quarter of 2025, the Group's overall operational performance remained stable. Although the Hong Kong office market is still in an adjustment period, the overall occupancy rate was slightly adjusted to 91%, but the decline was controlled. In contrast, the Hong Kong retail portfolio showed strong resilience, with Taikoo Hui, Cityplaza and Citygate Outlets all maintaining a 100% full occupancy rate. Among them, Taikoo Hui's retail sales increased by 5.6% year-on-year, reflecting the continued positive consumer sentiment in the core business district.

The mainland retail sector performed well, becoming the core engine of performance growth. Benefiting from the effective optimization strategy of the tenant mix, Shanghai Taikoo Hui's retail sales recorded an astonishing 49.6% year-on-year growth, and the occupancy rate also climbed to 96%; after the completion of the optimization project in the North District of Beijing Sanlitun Taikoo Li, sales also surged by 11.2%, with an occupancy rate of 99%. In addition, Chengdu Taikoo Li and Shanghai Qiantan Taikoo Li recorded steady growth of 6.5% and 6.9% respectively, showing the strong recovery momentum of high-end consumption in the mainland and the significant effect of brand upgrading.

Looking ahead, property transactions and new development projects will drive growth on both fronts. The pre-sale response of several residential projects in Shanghai Lujiazui and Qiantan has been positive, and a large number of contracted areas are expected to be confirmed before the end of 2026, locking in future revenue. Together with the orderly progress of large-scale integrated projects such as Beijing Taikoo Li, Sanya and Xi'an Taikoo Li, and the strong momentum of the mainland retail business, the Group's long-term growth foundation is solid, and the resilience of the asset portfolio is expected to be further enhanced.

Source: KGI Securities