Hongkong Land Q1 underlying profit rises 5% on lower borrowing costs

[SINGAPORE] Property group Hongkong Land posted a 5 per cent rise in underlying profit for its first quarter ended Mar 31, 2026, compared with the same period a year earlier.

This was primarily due to lower net financing charges, offsetting reduced contributions from Singapore following the disposal of Marina Bay Financial Centre Tower 3 prior to the formation of its new fund, the group said in an interim management statement filed on Tuesday (May 19).

Hongkong Land said that it raised US$600 million in net proceeds through capital recycling in 2026.

This brings its total capital recycled to US$3.6 billion since the company announced a new strategic direction in October 2024. It is targeting to hit US$4 billion by the end of 2027.

In February, the group established its inaugural private real estate fund, Singapore Central Private Real Estate Fund (SCPREF), with S$8.2 billion of assets under management (AUM). Hongkong Land operates as the general partner and manager of the fund.

“The group is actively assessing growth opportunities for SCPREF, with a goal of increasing AUM to S$15 billion within five years,” the release read.

Profit contribution from the Hong Kong Central portfolio was broadly in line with the prior year period, as higher retail rents and lower costs offset lower office rents.

On a committed basis, central office vacancies declined to 5.5 per cent as at Mar 31, 2026, from 6 per cent at the end of 2025, while physical vacancy was stable at 7 per cent.

The group highlighted that its Landmark’s retail portfolio logged slightly higher rental contributions, supported by resilient luxury spending despite over 30 per cent of its lettable space being under renovation.

Contributions from the Singapore portfolio fell during the quarter, primarily due to the divestment of its one third stake in MBFC Tower 3 in December 2025. Uncommitted vacancy in Singapore stood at 4.1 per cent at the end of March.

“The SCPREF portfolio delivered solid operating performance during the period, benefiting from a sustained flight-to-quality trend amongst occupiers and a favourable supply demand dynamic in the Marina Bay Central Business District,” the group said.

Meanwhile, mainland Chinese portfolio contributions climbed on the back of incremental rental income from projects newly opened in 2025.

Looking ahead, Hongkong Land noted that its full-year earnings outlook for 2026 has improved, with underlying profit expected to be mildly higher than the prior year, supported by positive leasing sentiment in Hong Kong and proactive cost management across the business.

Shares of Hongkong Land closed at US$7.96 on Tuesday, down US$0.03 or 0.4 per cent, before the release of the results.