Wharf Holdings outperforms HK retail growth of 4.2%

It eyes double-digit growth for 2014.

According to Barclays, in the first three months of 2014, Wharf’s Harbour City and Times Square recorded retail sales growth of +6.7% and +18.5%, respectively, outperforming Hong Kong’s overall retail sales growth of 4.2%.

For the full year 2014, Wharf hopes to achieve low-double-digit sales growth for Harbour City.

Here’s more from Barclays:

Considering 1Q’s growth of only 6.7%, this suggests an acceleration in 2Q-4Q 2014.

Growth will accelerate in 2H14 as renovation and tenant repositioning works in Harbour City are completed. As Harbour City only has one gold shop, the base effect from 2013’s 2Q gold rush is not likely to have a big impact on Wharf.

Wharf’s China contract sales reached Rmb5.8bn in the first four months of 2014. This is roughly 25% of Wharf’s full-year target of Rmb23bn.

While Wharf remains confident of its ability to achieve its full-year contract sales target, it also recognise the current difficult operating environment in China’s housing market and, as such, it is not in a rush to add to its China landbank.

On its China investment properties, Chengdu IFS mall is now 99% leased with 77% in use. Chengdu IFS offices are now 17% committed and 17% is under discussion. The average leasing rate is around Rmb130-170psm per month.