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Kerry Properties Shifts Focus to Hong Kong Land and Luxury Amid Mainland Slump
Kerry Properties is doubling down on Hong Kong residential land, acquiring three sites in the first half and considering asset sales to fund new investments, even as its mainland business slows.
Kerry Properties acquired three residential sites in Hong Kong during the first half, representing about 235,000 square feet of gross floor area. The developer said it will remain active in government land tenders, betting on a tighter local housing supply.
The push into Hong Kong comes as the company's mainland business contends with China's property downturn. To support new investments, Kerry Properties is considering recycling capital from existing assets, including a potential sale of its Mid-Levels rental project.
The Mid-Levels property was originally intended for long-term holding because of its rare location and views, but Calvin Tong, director and general manager for Hong Kong, said the company received a significant number of inquiries about a possible sale.
During an earnings briefing for its interim first half results, Tong said Kerry Properties will continue to invest very actively in Hong Kong's future. The company's gearing ratio improved to 31.3 percent at the end of June, down from 33.3 percent six months earlier, and management expects leverage to fall to about 30 percent by year-end.
The strategy reflects a pivot toward Hong Kong's residential and luxury property market as mainland growth weakens. Kerry Properties aims to capitalize on limited supply while maintaining financial discipline through asset recycling.