Hongkong Land, the biggest landlord in Central, posted an 11 percent increase in underlying profit for 2012, despite experiencing weak demand for office and retail space.
In a press release, the company said underlying profit attributable to shareholders for the year to 31 December 2012 was US$777 million compared with US$703 million for the year before.
However if increases in property valuations are added to the underlying profit, then profit attributable to shareholders plunged 73 percent from US$5.34 billion in 2011 to US$1.44 billion in 2012.
“Rental reversions in the Group’s prime Hong Kong Central office portfolio remained positive overall as the market was supported by a lack of new supply,” the company said in the press release.
It said its office portfolio in Central had a vacancy rate of 3.4 percent at the end of 2012 while the retail portfolio remained fully occupied.
As such rental reversions remained positive for both office and retail rents.
The company, which is owned by Jardine Matheson Group, noted that demand for office space was particularly weak from the financial services sector.
According to property consultant CB Richard Ellis, average office rents in Central in the last quarter of 2012 was about HK$101.9 per square feet, having dropped 10.6 percent year on year.
Overall the office vacancy rate in Central in the fourth quarter of 2012 was 4.7 percent.
Hongkong Land owns five millions square feet of commercial space in Central that includes properties such as Chater House, One and Two Exchange Square, Jardine House and Prince’s Building.
The company is busy building 48,000 square feet of office space at The Forum at Exchange Square that will be leased entirely by Standard Chartered Bank on completion in early 2014.
For its China portfolio, the company said construction had started for a luxury retail complex in Wangfujing district in Beijing which will include a Mandarin Oriental hotel.
Separately the company announced its chairman Simon Keswick will step down after the annual general meeting in May to be replaced by Ben Keswick.