Hongkong Land Q3 profit falls 13% on lower contributions from its office portfolio

[SINGAPORE] Hongkong Land’s underlying profit for the third quarter of its 2025 financial year is 13 per cent lower than the same period the previous year.

This is primarily due to lower contributions from its Hong Kong office portfolio and pre-opening costs of its prime properties in China, said the property company in an interim management statement filed on the bourse on Thursday (Nov 20).

Hongkong Land added that its outlook for the full-year financial results remains unchanged, with performance expected to be lower than the previous year. However, it said that the company’s financial position remained strong.

The firm had generated net cash inflows in Q3. When combined with proceeds from the sale of MCL Land, net debt was down to US$4.4 billion as at Oct 31, 2025, while gearing ratio – which measures a company’s debt to equity – went down to 15 per cent.

Hongkong Land had announced in September that it would sell its Singapore and Malaysian property arm MCL Land to Malaysia’s Sunway Group in a S$738.7 million cash deal.

In its bourse statement, Hongkong Land said that total net proceeds from the divestment, including cash distributions before completion, amounted to S$839 million. Including the proceeds from this transaction, the company has secured 50 per cent of its target of recycling at least US$4 billion of capital by the end of 2027.

The US$200 million share buyback programme announced in April this year has also been fully invested, reducing the issued share capital of the company by 1.6 per cent.

An additional US$150 million, financed by proceeds from the MCL Land transaction and other recycled capital, was allocated to the share buyback programme in September, with about US$40 million invested to date.

The company had announced last month its plans for the next 10 years to exit the build-to-sell residential development business as it pivots towards fund management and focuses on ultra-premium integrated commercial properties in Asia’s gateway cities. 

It intends to recycle up to US$10 billion in capital by 2035, and grow assets under management from US$40 billion now to up to US$100 billion by then.

While the company had already exited the Singapore and Malaysia residential markets, it has continued with ongoing projects in China and a select number of South-east Asian countries.

Hongkong Land noted that buyer sentiment for the residential sector in China deteriorated in the quarter, as the impact of new stimulus policies were limited. It will carry out a thorough review of the carrying value of its build-to-sell inventory in China at the end of the year.

The company has focused on driving sales by adapting its sales strategies and selectively reducing selling prices to cater to local market conditions. Further price reductions may be considered in the remainder of the year, as it continues to progress towards its capital-recycling targets. The firm had secured attributable contracted sales of US$161 million in Q3.

Shares of Hongkong Land fell 0.5 per cent, or US$0.03, to close at US$6.30 on Thursday.