On March 14, Swire Properties (HK.01972) announced its full-year results for 2023: Compared to 2022, revenue increased by 6% to HK$14.67 billion, while net profit attributable to shareholders decreased by 67% to HK$2.637 billion.
The group’s primary source of income remains its investment properties, with this segment’s revenue growing by 9.6% year-on-year to HK$13.525 billion (2022: HK$12.34 billion). Within investment properties, retail properties, which are most notably represented by “Taikoo Li” and “Taikoo Hui,” saw a 22% increase in revenue to HK$7.143 billion (2022: HK$5.849 billion).
Regionally, the group’s retail property rental income in the Chinese Mainland increased by 42% year-on-year to HK$4.191 billion. Excluding rent support and the impact of changes in the value of the Renminbi, total rental income increased by 45%.
The financial report attributes the significant drop in net profit attributable to shareholders mainly to a loss of HK$2.829 billion in the fair value of investment properties, compared to a gain of HK$801 million in 2022. In 2023, the group recorded fair value losses of HK$3.638 billion and HK$920 million on its investment properties in Hong Kong and the Chinese Mainland, respectively, while its investment properties in the United States recorded a fair value gain of HK$166 million.
Group Chairman Guy Bradley wrote in his chairman’s statement that despite significant economic and geopolitical challenges, Swire Properties’ long-term development strategy remains unchanged. In Hong Kong, the company continues to expand and strengthen its core commercial property portfolios of Taikoo Place and Pacific Place. In the Chinese Mainland, the company continues to expand its business with its two major brands, “Taikoo Li” and “Taikoo Hui,” focusing on developing retail-led mixed-use projects in first-tier and emerging first-tier cities.
“The Chinese Mainland continues to be a major engine of global economic growth. Swire Properties currently operates six world-class projects in four major cities in the Mainland, with another five large new projects under development. The Group aims to double its total gross floor area in the Chinese Mainland by 2032.”
As of the close of March 14, the group’s share price had slightly increased by 0.86% to HK$16.46 per share, with a total market value of approximately HK$96 billion.
Based on the contents of the financial report, Luxeplace.com summarizes the latest performance of Swire Properties’ six international projects in the Chinese Mainland and the latest progress of five major projects in this article.
Latest Performance of “Taikoo Li” and “Taikoo Hui”
The group stated that in the Chinese Mainland, as pandemic restrictions were lifted, there was a significant improvement in foot traffic, and retail sales at most of its shopping malls significantly surpassed pre-pandemic levels. In 2023, the group’s share of retail sales in the Chinese Mainland (excluding car retailers) rose by 46%.
Retail sales in 2023 at Beijing’s Taikoo Li Sanlitun, Chengdu Taikoo Li, Guangzhou Taikoo Hui, Beijing INDIGO, Shanghai HKRI Taikoo Hui, and Shanghai The Bund Finance Center Taikoo Li increased by 31%, 33%, 15%, 27%, 29%, and 79%, respectively. The overall retail sales in the Chinese Mainland market increased by 7%.
The group indicated that after years of double-digit growth rates in retail sales in the Chinese Mainland, it expects a stabilization in 2024. Retailers will be more cautious, but optimistic about the medium- and long-term outlook. The number of inbound and outbound travelers is expected to increase, and compared to pre-pandemic patterns, consumers will readjust their spending behavior between local and overseas consumption.
The overall demand for retail floor space is expected to remain stable. Luxury brand retailers in Guangzhou and Chengdu are still eagerly seeking retail space; demand from fashion, cosmetics, lifestyle brands, and F&B merchants in Shanghai and Beijing is expected to remain stable, with luxury brand retailers being relatively cautious in expansion.
- Beijing Taikoo Li Sanlitun: Retail sales increased by 31%, rental income increased by 4%
Taikoo Li Sanlitun, located in Beijing’s Chaoyang District, Sanlitun area, is the group’s first retail property development project in the Chinese Mainland, comprising three adjacent retail zones: the South, North, and West. Foot traffic has returned to 2021 levels. Due to Taikoo Li Sanlitun’s consolidated position as a fashion retail landmark, the market demand for its retail space remains strong. As of the end of December 2023, the occupancy rate was 94%.
New stores in 2023 include the Arc’teryx concept store, Issey Miyake collection store, Maison Margiela’s first flagship store in northern China, Jordan Brand, Valentino, and Versace, among others.
- Chengdu Taikoo Li: Retail sales increased by 33%, rental income increased by 12%
Chengdu Taikoo Li is the group’s second “Taikoo Li” project in the Chinese Mainland. The group continues to consolidate its position as a high-end shopping and leisure landmark, with an occupancy rate of 97% as of the end of December 2023.
In 2023, more than 70 brands opened new stores or upgraded to their latest concept stores, including Alexander McQueen, the Arc’teryx flagship store, Stone Island, and others.
- Guangzhou Taikoo Hui: Retail sales increased by 15%, rental income increased by 5%
Taikoo Hui Shopping Mall, located in Guangzhou’s Tianhe District, is a popular shopping center in Guangzhou. As of the end of 2023, the occupancy rate was 100%.
Fashion and lifestyle new tenants in 2023 include Celine, Chow Tai Fook Pavilion, FERRAGAMO, Gucci Beauty, Laopu Huangjin, LensCrafters, Longines, Loewe, Longchamp, Maison Margiela, On Running, and others.
- Beijing INDIGO: Retail sales increased by 27%, rental income increased by 14%
As of the end of December 2023, the occupancy rate was 99%.
Fashion and lifestyle new tenants in 2023 include ARMANI EXCHANGE, Calvin Klein, Descente, Kailas, Max & Co., Neiwai Active, On Running, Bose, erdos KIDS, Fila Kids, New Balance KIDS, and Chow Tai Fook Pavilion, among others.
- Shanghai HKRI Taikoo Hui: Retail sales increased by 29%, rental income decreased by 3% (mainly due to some parts of the mall undergoing renovation)
HKRI Taikoo Hui is the group’s second “Taikoo Hui” project in the Chinese Mainland. As of the end of December 2023, the occupancy rate was 93%.
Fashion and lifestyle new tenants in 2023 include ALLSAINTS, FRED, Loewe Fragrances, Prada Beauty, Rimowa, Saint Laurent Beauty, and & other stories, among others.
- Shanghai The Bund Finance Center Taikoo Li: Retail sales increased by 79%, rental income increased by 22%.
The Bund Finance Center Taikoo Li, located in Shanghai’s Pudong New Area, is a retail project jointly developed by the group and a subsidiary of Shanghai Lujiazui Finance & Trade Zone Development Co., Ltd. This is the group’s second project in Shanghai and the third “Taikoo Li” project in the Chinese Mainland. As of the end of 2023, tenants had committed to 98% of the retail floor space, and 95% of the leasable retail floor space had opened.
Fashion and lifestyle new tenants in 2023 include the Chinese Mainland’s first Dior Café, Asia’s first Hennessy flagship store, the Chinese Mainland’s first MUJI Farm flagship store, Tiffany, LE LABO, Parfums de Marly (Shanghai’s first flagship store), and Snow Peak, among others.
Latest Progress on Five Major Projects
- Xi’an Taikoo Li
This is the largest “Taikoo Li” project in the Chinese Mainland to date and Swire Properties’ first project in Xi’an, aimed at creating an international cultural landmark. In November 2023, the Xi’an Taikoo Li project broke ground, with excavation work currently underway, and is expected to be completed in phases starting from 2026. The project is jointly developed by the group and Xi’an Chenghuan Cultural Investment Development Co., Ltd., with the group holding a 70% stake.
- Sanya International Duty-Free City Phase III
The project is located in the center of Haitang Bay National Coast in Sanya, the first resort-type high-end retail project. Currently, the basement construction is underway, and it is expected to be completed in phases starting from the end of 2025. The project is jointly developed by the group and China Duty Free Group, with the group holding a 50% stake.
- Beijing INDIGO Phase II
The project is an extension of the existing INDIGO project, planned to be completed in two phases in 2025 and 2026, with basement and superstructure construction currently underway. Inspired by Taikoo Place One and Taikoo Place Two, the goal is to create a vibrant and high-quality commercial district in the capital. The project is jointly developed by the group and Sino-Ocean Group, with the group holding a 35% stake.
- Shanghai The Bund Comprehensive Development Project
A mixed-use development project consisting of retail, office buildings, and residential buildings, expected to be completed starting from 2025. The group holds a 40% stake in the project.
- Shanghai Yangjing Comprehensive Development Project
The project will be developed into a comprehensive landmark integrating high-end residential, retail, office buildings, and cultural facilities (which may include a fashion lifestyle boutique hotel), expected to be completed in phases starting from 2027. The group holds a 40% stake in the project. After the completion of the two projects in Shanghai, Shanghai will become the city with the largest footprint of Swire Properties’ business in the Chinese Mainland.
Previously, in March 2022, Swire Properties announced plans to invest HK$100 billion in Hong Kong and the Chinese Mainland over the next ten years to develop a series of projects, while also engaging in a series of residential property sales projects in different regions.
As of March 8, 2024, the total amount of investment plans committed is approximately HK$58 billion, with HK$11 billion in Hong Kong, HK$37 billion in the Chinese Mainland, and HK$10 billion in residential property sales projects. Unconfirmed projects include more retail-led mixed-use development projects in first-tier and emerging first-tier cities in the Chines Mainland, including Guangzhou and Beijing.
About Swire Properties
Swire Properties was established in Hong Kong in 1972 and listed on the Main Board of the Hong Kong Stock Exchange in 2012. Its main business operations include commercial, hotel, retail, and residential properties. Completed shopping centers in the Chinese Mainland include Beijing Taikoo Li Sanlitun (wholly owned), Beijing INDIGO (50% stake), Guangzhou Taikoo Hui (97% stake), Chengdu Oceanwide Taikoo Li (wholly owned), Shanghai HKRI Taikoo Hui (50% stake), and Shanghai The Bund Finance Center Taikoo Li (50% stake).
| Source: Swire Properties‘’s financial report
| Image CreditS: Company website
| Editor: LeZhi
