Swire Properties swings to profit as mainland China malls race ahead of Hong Kong

Swire Properties reported a swing to profit for the first half of 2026, with reported profit attributable to shareholders of HK$3,631m, against a loss of HK$1,202m in the same period last year, according to the Hong Kong-listed landlord's interim results announced on 6 August. The company's underlying profit, which strips out non-cash property valuation swings, rose 11% to HK$4,900m, while recurring underlying profit — which also excludes one-off divestment gains — climbed 36% to HK$4,661m.

The reported-profit swing owed mostly to accounting rather than operations: Swire's investment properties recorded a net fair-value gain of HK$26m in the first half, against a HK$4,680m fair-value loss a year earlier that was concentrated in the Hong Kong office portfolio, the company said. Underlying profit growth was driven chiefly by the HK$2.2bn sale of two houses at 6 Deep Water Bay Road, completed in March, plus higher retail rental income. The board declared a first interim dividend of HK$0.37 per share, up 6% year on year.

Despite market uncertainties, the underlying strength of our business is evident.

Mainland malls pull away

The clearer operating story sat in retail. Attributable retail sales across Swire's mainland China malls rose 23% in the first half, the company said, led by Taikoo Li Sanlitun in Beijing, up 63%, and HKRI Taikoo Hui in Shanghai, up 82%. Swire attributed Sanlitun's jump to a completed north-zone trade-mix upgrade and the April opening of a Hermès global flagship there, while HKRI Taikoo Hui benefited from Louis Vuitton's "The Louis" concept store, opened in June 2025, and a new Rolex Prestige boutique. Taikoo Li Chengdu and Taikoo Li Qiantan in Shanghai each grew sales 14%, Taikoo Hui in Guangzhou 9%, and INDIGO in Beijing 3%.

Hong Kong's retail portfolio grew more slowly by comparison. Sales rose 15% at the Mall at Pacific Place, 16% at Citygate Outlets and 3% at Cityplaza, against a provisional 10% rise for the Hong Kong market overall, Swire said. The company pointed to steady demand for watches, jewellery and gold from local and visiting shoppers, even as outbound travel by Hong Kong residents continues to weigh on the wider market. All of Swire's Hong Kong malls stayed fully let through the period.

The mainland's growing weight in the group shows up in the numbers: attributable gross rental income from Swire's completed mainland China properties reached 46% of the group total for the first half, up from 43% for the whole of 2025, with Hong Kong's share correspondingly lower. Of Swire's HK$100bn, decade-long investment programme, about 70% is now committed, and more than 90% of the mainland allocation has already been assigned — including seven mainland projects under construction, among them a first riverside Taikoo Li development in Guangzhou and a resort-style retail complex in Sanya.

The interim statement also flagged one detail relevant closer to home: Swire Hotels' expansion plans include a new Tokyo property under a management contract, alongside a Shenzhen signing — the group's first disclosed move into the Japanese hotel market. Set against the mainland-versus-Hong-Kong retail split, the wider pattern is consistent: Swire is following its luxury tenants toward the Chinese cities where flagship openings are still driving footfall, while treating Hong Kong as a steadier, slower-growing base to defend rather than expand.