“Sun Hung Kai Properties signs largest-ever syndicated loan of HK$27.5 billion with major international and local banks”

Viewpoint Network As the developer with the highest credit rating in Hong Kong, Sun Hung Kai Properties can still obtain extensive financial support despite the industry downturn.

On May 29, Sun Hung Kai Properties announced that it has recently signed a five-year loan agreement with 18 major international and local banks. The final total loan amount reached HK$27.5 billion, which is the largest syndicated loan in the history of the group.

It is reported that the loan was signed by Sun Hung Kai Properties (Financial Services) Co., Ltd. and guaranteed by the parent company SHKP. The loan includes 30% term loan and 70% revolving loan with a period of five years. The loan will be used to finance part of the debt and extend the repayment period. payment period.

Guo Binglian, chairman and managing director of Xindi, said that the group is developing a number of projects available for sale, and the property investment portfolio has brought considerable and stable recurring income, which will continue to strengthen. The Group will also accelerate the sales of residential projects to meet the housing needs of Hong Kong citizens.

The signing of this syndicated loan not only provides financial support for Sun Hung Kai Properties, but also reflects the bank’s recognition and support for its long-term and steady development.

Judging from the 2022/23 interim results, although Hong Kong capital, which is known for being cautious and conservative, is also facing a shrinking performance, it will not reach the level of a large-scale landslide. For the six months ended December 31, 2022, Sun Hung Kai Properties’ revenue was HK$27.428 billion, a year-on-year decrease of 31.69%; the profit attributable to shareholders for the period was HK$8.410 billion, a year-on-year decrease of 44.62%.

From the perspective of sales in the Mainland, Sun Hung Kai Properties’ contracted sales increased instead of falling, recording a year-on-year increase of 30% to 2.6 billion yuan, mainly from a number of cooperative development projects, including the first phase of the residential part of Hangzhou International Finance Center and the third phase of Chengdu JovoTown Phase A and a new batch of Foshan Longjing.

In addition, Sun Hung Kai Properties plans to sell the new phases of the ICC residential part of Guangzhou South Railway Station, Shanghai Binjiang Triumphal Arch, the residential part of Hangzhou International Finance Center, the new phases of cooperative development projects such as Zhongshan Yicuiyuan and Foshan Longjing.

Sun Hung Kai Properties expects that the total floor area completed in the second half of the 2022/23 financial year will increase to about 2.9 million square feet, of which about 2 million square feet will be residential properties available for sale, and the rest will be non-residential properties, of which about 635,000 sq. ft. will be used for rental.

SHKP prefers Hong Kong and mainland first-tier and major second-tier cities to develop a number of new landmark mixed-use projects, and these large-scale development projects will bring new impetus to the company’s medium and long-term recurring income. Recently, it has also won the bids for the Art Square Building Project in the West Kowloon Cultural District of Hong Kong and the large-scale comprehensive commercial project in Sai Yee Street, Mong Kok.

Sai Yee Street Commercial Project in Mong Kok has a floor area of ​​139,000 square meters and a height of 320 meters. It will be the second tallest landmark commercial building in Kowloon after the International Commerce Center (ICC) in Xindi. The project, together with the New Century Plaza project 149,000 square meters of floor space, the two projects together provide a total of about 279,000 square meters of commercial floor space.

According to Sun Hung Kai Properties, the project will become the largest landmark office building shopping mall combination in Mongkok District, and it will also be the core of commercial, retail shopping and tourism consumption in Central Kowloon.

In the mainland, Sun Hung Kai has created a number of urban complex landmarks in first-tier and strong second-tier cities. Currently, nearly 5 million square meters of self-owned properties have been completed in Hong Kong and the mainland, including Hong Kong IFC, Hong Kong ICC, Shanghai IFC, Shanghai ICC, Nanjing IFC , Guangzhou Tianhuan Plaza and other commercial landmarks.

The third phase of the ITC project located in the core area of ​​Xujiahui, Shanghai, has a construction area of ​​about 220,000 square meters (2.4 million square feet), and the core tube of Building B with a height of 370 meters has been officially capped. After completion, it will become the tallest building in Puxi, Shanghai .

Previously in March, Fitch affirmed SHKP’s long-term Issuer Default Rating (IDR) of ‘A’ and short-term IDR of ‘F1’. The rating affirmation reflects the high value of SHKP’s investment property portfolio, resulting in a Strong recurring revenue.

Fitch expects SHKP’s overall rental income to grow by an average of 4%-5% per annum between FY2022 and FY2025. It is expected that by the end of 2025, the total construction area of ​​Sun Hung Kai Properties’ investment properties in the Mainland will increase by 45%, mainly from new office buildings and retail properties in Shanghai and Nanjing.

Although its assets have a strong ability to absorb money, it should also be noted that the total rental income of Sun Hung Kai Properties in the Mainland in the last fiscal year fell by 10% year-on-year to 2.507 billion yuan, and the total rental income in Hong Kong also decreased by 2% year-on-year to 8.772 billion yuan Hong Kong dollar.

The financial report shows that as of the end of 2022, Sun Hung Kai Properties’ bank deposits and cash were 17.8 billion Hong Kong dollars, a decrease from 20.3 billion Hong Kong dollars in the middle of 2022; at the same time, bank loans increased from 15.857 billion Hong Kong dollars at the beginning of the period to 21.493 billion Hong Kong dollars.

From this point of view, Sun Hung Kai Properties does need to plan more financing to meet funding needs.

At the SmartHK Promoting High-Quality Development Hong Kong Forum held in Guangzhou on May 24, Guo Jihui, executive director of Sun Hung Kai Properties, pointed out that there is still room for improvement in the overall transfer experience of Guangzhou South Railway Station, and Sun Hung Kai will invest an additional 3.5 billion yuan in Public construction, with over 410,000 square meters of brand-new comprehensive transportation hubs and public service facilities.