Hong Kong’s Kerry Properties Sees Profit Rises 16% to $120M on Lower Valuation Losses

Kerry Properties reported an attributable profit of HK$938 million ($120 million) for 2025, up 16 percent from a year earlier, as lower valuation losses and stronger development contributions lifted earnings at the Hong Kong-listed builder.

Underlying profit, which excludes fair value changes on investment properties, fell 22 percent to HK$2 billion, pressured by softer rental income and higher tax charges, the group controlled by the family of Shangri-La Hotel tycoon Robert Kuok said Monday in a stock filing. Revenue edged up 0.4 percent to HK$19.6 billion.

Chairman and CEO Kuok Khoon Hua said the group would maintain a “prudent” approach to investment while navigating a challenging environment, with a focus on long-term growth in its core markets.

“While Hong Kong’s prospects are looking up, sentiment is still fragile and the impact of the recent extreme geopolitical events in the Middle East are already being felt in the stock and property markets,” said Kuok, who is Robert Kuok’s youngest son.

Mainland Sales Surge

Contracted sales jumped 175 percent year-on-year to HK$34.7 billion, driven primarily by strong presales at the Jinling Residences project in Shanghai. Hong Kong accounted for HK$9.4 billion of that total, down 7 percent from a year earlier, as buyers remained selective despite improving sentiment in the residential market.

Kerry’s Hong Kong business saw revenue rise on increased development completions, including Mont Verra and projects in Yuen Long, though margins narrowed due to product mix changes. The group’s rental income in the Asian finance hub declined, with office and retail segments continuing to soften amid oversupply and weak demand, while the apartment portfolio showed more resilient performance.

In mainland China, Kerry recorded HK$25.3 billion in contracted sales, up more than ninefold from the prior year and accounting for 73 percent of the group’s total. The mainland division’s revenue declined due to project phasing, but earnings improved on stronger margins, with high-end developments in core cities outperforming weaker sales in lower-tier markets.

Rental income from mainland investment properties slipped slightly as office rents came under pressure from rising vacancies, though retail assets delivered stable performance with improved tenant sales and occupancy.

Stocking Up on Sites

Looking ahead, Kerry said it would continue to pursue a disciplined landbanking strategy supported by a development pipeline capable of sustaining sales for at least six years.

The developer also plans to expand its investment property portfolio by 7.6 million square feet (706,063 square metres) in mainland China, focusing on mixed-use projects in cities including Shanghai, Wuhan and Shenyang.

Last month, Kerry beat seven other bidders to win a government tender for a residential site in Shau Kei Wan on Hong Kong Island, with the development expected to yield more than 130,000 square feet of gross floor area and 300 homes upon completion.

The developer’s activity this year has extended to Hong Kong’s distressed asset market, with Kerry agreeing to acquire a Kowloon Tong residential site formerly owned by Agile Group at a price roughly 55 percent below its 2023 valuation.

The HK$430 million deal for the Eastbourne Road property highlights opportunities emerging from mainland builders’ financial distress, with the site offering redevelopment potential of close to 65,000 square feet of gross floor area.