Swire Properties Falls Most Since January Debut: Hong Kong Mover

Swire Properties Ltd. (1972) fell the most since trading began in January as the shareholder after which the company is named said it is selling a HK$5.04 billion ($650 million) stake in the Hong Kong commercial landlord.

Swire Properties fell 8.4 percent at HK$21.85 as of 9:40 a.m. local time, cutting its gain since Jan. 19 to 27 percent. The benchmark Hang Seng Index rose 3 percent over the same period. John Swire & Sons Ltd. will sell 234 million shares of Swire Properties at HK$21.53 apiece, according to a statement to Hong Kong’s stock exchange yesterday. The sale cuts its holdings in the company to 3.71 percent from 7.71 percent.

The owner of Pacific Place and Island East office and shopping mall complexes in Hong Kong has seen demand for prime office space in the city “weakening,” Chief Executive Officer Martin Cubbon said in a Bloomberg TV interview yesterday. Prime office rents in Hong Kong, the world’s most expensive place to lease commercial space, fell for a third consecutive quarter in the three months ended March and may decline another 4 percent over the next 12 months, according to Colliers International.

Swire Properties is 82 percent-owned by Swire Pacific Ltd. (19), which also controls Hong Kong’s biggest carrier. John Swire & Sons owns 44.19 percent of Swire Pacific, according to yesterday’s statement.

Swire Properties said Aug. 10 profit excluding real estate revaluation rose 3.8 percent to HK$2.44 billion ($315 million) because of growth in rental income from its office and shopping malls in the city and mainland China.

Hong Kong’s retail rents may gain 12 percent over the next 12 months after increasing 18 percent in the first half from a year earlier, as international brands continue expanding in the city, a major shopping destination for wealthy mainland Chinese, according to Colliers.

Swire Properties, which owns the most shopping spaces in the Admiralty and Quarry Bay areas on Hong Kong Island, is also expanding in Chinese cities including Guangzhou, Beijing and Chengdu.

To contact the reporter on this story: Kelvin Wong in Hong Kong at kwong40@bloomberg.net

To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net

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