Sun Hung Kai Properties Ltd., one of the biggest developer in Hong Kong saw profit drop 9%, extending its decline into a third year as Hong Kong’s real estate slump weighs.

Expensive borrowing costs and a glut of apartment supply have hurt sales for Hong Kong’s property developers, prompting them to offer discounts to boost transactions. Home prices fell to the lowest level in eight years in July, putting pressure on the residential development business.

Sun Hung Kai’s dividend for the full year was cut by 24% from the previous year to HK$2.8 per share.

The residential market in Hong Kong has “softened” due to high interest rates, the company said in the statement. Property sales revenue fell 4% in the period. 

Nonetheless, the group saw a rise of 3% in rental income from its investment properties. Its retail and serviced apartment portfolio offset the loss in the lackluster office sector. Weak demand has pushed office vacancy rates to an all-time high in Hong Kong, and rents may fall as much as 10% this year, CBRE Group Inc. estimates.

Source from: bnnbloomberg