Hang Lung flags ‘tough slog’ for property, looks to mainland malls for growth

Hong Kong developer Hang Lung Properties is pinning its medium-term outlook on a recovery in mainland Chinese consumption, even as it warned that both the city’s and China’s property markets remain under strain. The commercial landlord, residential developer and hotel owner said it expected a “tough slog” for the broader sector despite signs of improvement in operating conditions, particularly in the second half of the year. Net profit attributable to shareholders fell 16 per cent to HK$1.8 billion (US$231 million) in 2025, while revenue declined 11 per cent to HK$9.95 billion, according to its latest results. “There’s pressure across the board,” Adriel Chan, chairman of Hang Lung Properties and its parent, Hang Lung Group, said at a post-results briefing on Friday. He added that he did not expect a rapid or broad-based rebound across property segments. “The best hope we have is probably in mainland retail,” Chan said, citing the group’s efforts to upgrade tenant mixes and introduce new and more compelling brands across its shopping malls. Rental revenue from its mainland mall portfolio rose 1 per cent, with occupancy climbing by two percentage points. Hang Lung operates 11 retail properties across mainland China, including projects such as Plaza 66 in Shanghai and Palace 66 in Shenyang. The company said leasing revenue trends turned positive from May, led by assets in Shanghai, Wuxi, Dalian and Kunming. Chan said domestic travel and Beijing’s policy push to stimulate consumption should support sales at its mainland malls, which he described as the company’s “biggest hope” for future growth. In Hong Kong, conditions had shown early signs of stabilising since the fourth quarter, he added, though rental revenue in the city still slipped 2 per cent to HK$2.97 billion for the year. Group CEO, Weber Lo, said performance strengthened in the latter half, supported by resilient occupancy and steady leasing income across its assets. “We maintained high occupancy and stable leasing revenue across the portfolio, reflecting asset quality, customer focus and strong tenant relationships,” Lo said, adding that the group continued to adjust its tenant mix to match shifting consumption patterns. Lo declined to comment on the planned closure of a four-storey outlet by Swedish fashion retailer H&M at the group’s Fashion Walk mall in Causeway Bay, where the brand has been a tenant since 2013. Hang Lung Properties proposed a final dividend of HK$0.40 per share, payable on June 15. Its parent, Hang Lung Group, reported a 15 per cent drop in net profit attributable to shareholders to HK$1.37 billion and recommended a final dividend of HK$0.65 per share, also payable on June 15.