Analysts see a 4% increase in Hong Kong’s retail rental income for FY2022

Retail rental income for rated companies is said to climb as borders reopen to mainland China 

As mentioned by Hong Kong Business, earnings for property developers in Hong Kong may relatively stabilise in FY2022 due to an income increase in the retail rental segment.  

Moody’s Investors Services said in a report that it predicts a four percent increase in retail rental income for the next fiscal year, as borders reopen to mainland Chinese visitors. 

“This will allow developers to scale back the retail rental concessions and marketing expenses,” the analysts said. 

However, the growth in the retail rental will not be seen in the office segment.  

Analysts anticipate some contraction by a mid-single-digit percentage due to “corporate downsizing and lowered expansion demand.” 

The residential segment can expect similar conditions seen in offices.  

Analysts forecast revenue for the sector to decrease around 10-15 percent in the next 12-18 months for “three companies that generate a significant portion of their earnings from property development.”  

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They attributed the decline to fewer completed projects.  

On the contrary, analysts added that presales and the associated cash flow will be strong in the following 12-18 months in the sector.