“There are plenty of uncertainties both domestically and internationally. Visibility beyond 2023 is unclear. Until the clouds lift, we will continue working to enhance operational efficiencies to make our assets everywhere even more productive.”

The developer added that it has a strong pipeline of projects yet to be completed, including Westlake 66 in Hangzhou, a retail office and hotel development, as well as “a few hotels and residential developments” in the works in mainland China.

Looking ahead, both international and domestic uncertainties will affect business operations, the developer said in a statement. Globally sluggish economic conditions coming out of Covid-19 pandemic, with relatively low GDPs and rising interest rates, will remain as headwinds in the short term.

Hang Lung’s luxury malls in mainland cities proved to be a strength after a few challenging years.

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For example, Plaza 66 and Grand Gateway 66 in Shanghai recorded year-on-year revenue growth of 23 per cent and 11 per cent, respectively, in the first half of 2023. Rental revenue for luxury malls outside Shanghai also increased by 11 per cent year on year.

Overall business sentiment in mainland China rebounded quickly after the Covid-19 surge in December last year when the spread of cases subsided in early January and related pandemic containment measures were lifted, the developer said.

Meanwhile, the company’s Hong Kong portfolio achieved year-on-year rental growth for the first time since 2020, with Hang Lung citing the government’s “Hello Hong Kong” campaign, a new round of consumption vouchers and a mall rewards programme for boosting consumer sentiment.

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Revenue from retail properties located in central business and tourist districts in Hong Kong grew by 8 per cent, while the developer’s shopping centre portfolio saw overall revenue increase by 4 per cent compared with the same period last year. Overall occupancy remained stable at 97 per cent.

The results are in line with expectations overall, with slightly stronger-than-expected Hong Kong rental performance, Citi said in a note on Monday. The bank has recommended a buy for the developer’s stock, adding that downside risks include worse-than-expected retail sales and rental growth in China, slower sales of noncore investment properties and worse-than-expected economic developments and policies in Hong Kong and mainland China.

Hang Lung expects to complete the construction of its second premium hotel, Grand Hyatt Kunming, in the first half of 2024. It also expects its office portfolio to maintain rental growth, saying demand still outweighs the limited supply of grade A office towers.

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Preparations are also under way for the mainland China launch of the company’s premium serviced residences brand, Hang Lung Residences. The first batch of units, at Heartland Residences in Wuhan, is slated for handover to buyers in late 2023.

Hang Lung Group, the parent company of Hang Lung Properties, reported a 16.9 per cent year-on-year increase in net profit to HK$1.68 billion in the first six months of the year, while revenue contracted 1.4 per cent to HK$5.53 billion.

Hang Lung Properties’ Hong Kong shares gained 1 per cent to HK$12.10 on Monday, while Hang Lung Group fell 0.7 per cent to HK$12.16.