Emperor, biggest landlord on Hong Kong's Russell Street, world's most expensive shopping avenue, reports US$464.5 million loss

By Pearl Liu pearl.liu@scmp.com / https://www.scmp.com/business/companies/article/3090316/emperor-biggest-landlord-hong-kongs-russell-street-worlds-most?utm_medium=partner&utm_campaign=contentexchange&utm_source=EdgeProp&utm_content=3090316 | June 30, 2020 4:45 PM SGT
Emperor International Holdings, the biggest landlord on Hong Kong's Russell Street, the world's most expensive shopping avenue last year, reported a net loss of HK$3.6 billion (US$464.5 million) for the 2019-2020 financial year on Tuesday.
The company, the property arm of Albert Yeung Sau-shing's privately run Emperor Group, reported the loss in a filing to the Hong Kong stock exchange late on Tuesday.
Emperor said the loss, its first since 2016, could be attributed mainly to a revaluation loss of HK$1.4 billion on investment properties. "Market leasing demand of both retail and office segments remained under pressure, while demand for hospitality services was also adversely affected during the year," it said in the filing. Its rental income declined 9 per cent to HK$1 billion, while income from hotels dropped 22 per cent to HK$1.2 billion.
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Annual rent on the street dropped to US$2,000 per square foot in the first quarter of this year, a third lower than its highest level recorded in 2013, when it was first crowned the most expensive shopping strip globally, according to property consultancy Cushman and Wakefield.
Cushman said rent in most of Hong Kong's core retail districts might drop by as much as 40 per cent in the six months to end of June. Emperor owns shops at street level in Causeway Bay and Tsim Sha Tsui, two of these districts, as well as shopping centres and hotels.
It is the first major landlord and developer to report a loss, after some others sounded the alarm back in April. The Wharf (Holdings), Wharf Reic, Hang Lung Properties, Swire Pacific and Shui On Land issued profit warnings and said they expected to report losses for the six months ending June 30, or the full year, while CK Asset Holdings expected to report a profit drop for the first half of 2020.
Emperor also said it will "continue to acquire commercial buildings that have great potential", as it is confident that Hong Kong will be one of the hottest shopping destinations in Asia, and was among cities best placed to benefit from a recovery in consumption sentiment. Last year, it reported a profit of HK$3.1 billion.
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The company plans to issue a final dividend of HK$0.035 per share, bringing the total to HK$0.07 per share for the year, down from HK$0.11 last year. Emperor's shares closed 2.33 per cent higher at HK$1.3 on Tuesday, before the result was announced.
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