July 31, 2025 • 17 mins
Asian stocks fell for a sixth straight session — the longest losing streak this year — as President Donald Trump announced new tariff rates and as solid earnings from megacap tech firms failed to lift broader market sentiment. The MSCI Asia Pacific Index dropped 0.4% at the open while contracts for the S&P 500 also fell by the same amount. Trump will maintain a minimum global tariff of 10%, while imports from countries with trade surpluses with the US face duties of 15% or higher, the White House announced Thursday. We get reaction from Jenny Gordon, Non-Resident Fellow at the Lowy Institute. She speaks with Bloomberg's Shery Ahn and Haidi Stroud-Watts on The Asia Trade.
Plus - Bloomberg Intelligence says Hang Lung Properties may stabilize retail rental income in mainland China, mainly driven by solid leasing performance of prime shopping malls in Shanghai. Its retail rental revenue on the mainland held steady at 2.4 billion yuan in the first half, with high occupancy rates of Plaza 66 and Grand Gateway 66 at 98% and 99% as of June 30. We speak with Adriel Chan, Chair of Hang Lung Properties.
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:10):
Welcome to the Bloomberg Daybreak Asia podcast. I'm Dan Schwartzman.
We're just hours away from the August first tariff deadline
imposed by US President Donald Trump. We'll have more on
trade in a moment, plus a look at the Chinese
property sector. Later on, we'll bring you Doug Prisner's conversation
with Adriel Chan, chair of Hang Lung Properties. President Trump
(00:32):
will keep minimum global tariff rates at ten percent, according
to a White House statement Thursday. Meantime, it appears that
the US and Canada have not reached a trade agreement.
The White House says the terifate on Canada has now
been increased from twenty five to thirty five percent. Thailand
and Cambodi have received a nineteen percent tariff rate, while
Taiwan's was set at twenty. Switzerland was a standout the
(00:55):
rate of thirty nine percent. For a closer look, we
heard from Jenny Gordon, non resident fellow the Loewe Institute.
She spoke with Bloomberg's Sherry on In Heidi Stroud Watts
on the Asua trade.
Speaker 3 (01:05):
Jenny, really great to have you with us, particularly at
a time where the news and the tariff news continues
to move at such a frenetic pace. We're still sort
of a few hours out from the official deadline, of course,
But has anything surprised you about the numbers that we've seen,
and also the fact that, you know, obviously for maximum
leverage or negotiating pressure, this is pushed to the eleventh hour. Industry,
(01:29):
logistics exporters and importers, not a whole lot of time
to be able to prepare for these scenarios.
Speaker 4 (01:35):
No, no's that's definitely the case. And I think the
other problem is that nobody's clear that August first and
all these numbers will be the final round. You know,
Trumps could well ask for more at some other point
in time, and I suspect probably will, so I guess
there's that lack of certainty is a real concern for
(01:55):
most countries. I think the one that really surprised me
was thirty nine on Switzerland. I had thought they might
get kind of treated like the rest of Europe, but
that one was a surprise. The fact that it's fairly
common nineteen percent across Indonesia and Malaysia and many of
the other countries in Southeast Asia. I suspect is you know,
(02:20):
that's a common tariff, the high tariff on Lao and Cambodia.
There's very little trade and most of it is in
consumer goods. I think that's probably reflecting concerns about transshipment
and the ability to control transhipment from China, so it
might reflect that. But none of this is good. None
(02:41):
of this is good for the globe, nor actually for
the US consumer. And I think one of the big
things is the US imports a lot of inputs and
so costs are going to rise, even in non traded industries.
So you know, it's going to get more expensive to
set up a new business or a new factory in
(03:02):
the United States as a result of these tariffs on
the inputs as well as on the final goods.
Speaker 3 (03:10):
It's interesting because as you say, none of this is good.
Obviously ten percent tariff is better than a forty percent tariff,
and on that it's interesting. Australia isn't even on this
annex that we can see at the moment, so not
quite clear what the tariff is on the likes of
Australia for now. But do you think that there is
a level of complacency. Certainly that we've seen in financial
markets that well, these are you know, levels and tariff
(03:32):
rates that were better than expected and so therefore somehow
more palatable.
Speaker 4 (03:37):
Well it's funny, isn't it, Because as you go from
almost zero tariffs to ten, fifteen, twenty, you know, thirty
five percent, you're kind of saying, oh, thank goodness, I
don't have thirty five percent. I've only got fifteen percent.
And so you know, it's kind of interesting because really
the baseline was close to zero in most cases, and
(03:59):
so this this is a massive cost impost and you know,
you could almost think if you had one single uniform tariff,
then it would be largely a revenue raising exercise and
it would almost be like putting a value added tax
on the American consumer. And that'd be one way to
think about it. But this is creating different opportunities for
(04:20):
different countries because of different tariff rates. The actual rates
don't actually reflect very closely what those countries export to
the United States. So there doesn't seem to be an
overwhelming strategy of you know, countries that export mainly inputs
into production face lower tariffs and countries export final goods.
(04:42):
So there seems to be I can't quite work out
the rhymal logic to all of this, right, and I
don't know stock markets have woken up to it either.
Speaker 1 (04:52):
I'm trying to get through this annex and I'm not
sure if I'm reading this correctly. But is Brazil's tariffy
a ten now? Because then President Trump just threatened fifty
percent tariffs and in fact he was ready to impose them,
and he had linked some of that animosity with Brazil
and President Lula to political reasons around the former president
(05:15):
Bilsonaro as well. Right now, I'm seeing the annex, and
as we're trying to digest his new tariff rates, Brazil
is now back a ten percent. Jenny. When he comes
to linking geopolitical issues with economic sanctions like tariffs, has
President Trump changed the pleabook?
Speaker 4 (05:32):
Now? Well, I think the US has always used financial
sanctions for geopolitical purposes, and so they've tended to use
that rather than tariffs. And part of that was because,
you know, really they'd been part of this global commitment
to bring tariffs down across the world, and the only
sort of potential upside of Trump's threatening tariffs was to
(05:55):
help other countries who were struggling politically to bring down
their tariffs to do so in exchange for lower tariffs.
But I think this has moved the US into entirely
new territory. And this is why I don't think we
feel like we've seen the end of tariffs and that
this final set of numbers is the one that will
(06:16):
go ahead, because Trump has changed the way he uses tariffs,
and that just increases the uncertainty in the global economy,
and if you're trying to get investment going, that's the
last thing you want his uncertainty. Investors need certainty. And
so even though he's extracted promises of large amounts of
extra investment into the United States, that faces some real
(06:37):
barriers to go ahead, because one, you've got a shortage
of construction workers anyway in the United States, so constructing
new manufacturing plants is going to take time. And two,
it's just that you're not sure what that tariff ruling
is going to be. And if you know, the Trump
administration gets annoyed at a particular leader in a country
(06:59):
or a particular country for doing something, then they might
just sort of say, oh, we're going to raise your
tariff again. So it just completely undermines the certainty that's
needed for investment around world.
Speaker 1 (07:12):
And Jenny, we're also seeing that the White House is
really emphasizing the transship goods. So if there are any
ways to try to evade the thirty five percent tariff,
I think it's talking about Canada that there will be
subject to transhipment tariffs of forty percent. And that has
been a key issue right because we have seen other
countries like China, for example, trying to send goods through
(07:33):
Southeast Asian countries. How meaningful is it that this administration
is cracking down on transhipments.
Speaker 4 (07:41):
Well, I think that actually makes you know, more difficult
for China's strategy is to how does it bring down
you know, just the stretcham shipment is you just you know,
stick it in a container and take it to somewhere
and relabel it and ship it off. But the bigger
issue is all the componentory. That is where you've got
the integrated supply chain problem, where countries, particularly in Asia,
(08:06):
import a lot of components, add value to them and
may ship it back to China and then gets shipped
back again. The complexity of supply chains is enormous, and
so what Asian countries are looking to do is almost
have dual supply chains, so that they'll have one set
of supply chains that try to keep Chinese content out
in order to ship to the US, and then they'll
(08:27):
have another set of supply chains that use Chinese content
because of the price advantages of it. And so that's
I think from what I'm here from Asian colleagues, is
what they're trying to kind of work towards. And it
adds costs, so it just is less efficient than the
character and which means the prices of everything go up.
Speaker 2 (08:47):
That was Jenny Gordon, non Resident fellow at the Lower Institute,
speaking to Bloomberg. Sherry On and Heidi Shroud wants coming
up a conversation with Adrial Chen Chaff Hang Lung Properties
here on the Daybreak Asia podcast.
Speaker 5 (09:07):
Welcome back to the Daybreak Asia Podcast. I'm Doug Krisner.
Let's turn our attention now to the property markets in
both Hong Kong and on the Chinese mainland. Joining me
is the chairman of Hong Long Properties, Adrial Chan. Adrill
joins us from our studios in Hong Kong. Good of
you to make time to chat with me. I want
to bring up a source subject right out of the gate.
I'm sorry because I noted that net income for your
(09:31):
company was down fourteen percent year over year in the
latest period. Can you give me a sense of what's happening,
what you're struggling with right now?
Speaker 6 (09:39):
Thanks Doug. The decrease in net income really is as
a result of a lower number of sales of apartments,
and that is something that fluctuates for us. The primary
sector of our business is retail leasing and office leasing.
So commercial leasing is actually down low single digits, which
is a lot less bad than being down fourteen percent,
(10:03):
but that's the explanation for that. If you look into
retail and offices, retail has been actually surprisingly resilient in
the mainland. I think our share price has reacted relatively
well since the announcement of our results, and that was
a little bit of a surprise to me, honestly, But
I think that the market was perhaps expecting worse. So
(10:23):
we're down retail sales low single digits, but I think
people were probably expecting worse than that.
Speaker 5 (10:29):
So give me a sense of what your portfolio looks like.
When you talk about retail spaces, I think shopping malls
are you catering to retailers that perhaps service the higher
end of the market. Are these luxury type retailers primarily?
Absolutely so.
Speaker 6 (10:45):
Our biggest exposure is to the luxury brands, and as
we've been seeing over the past couple of days, the
luxury brands have been posting let's say, mixed results. Asia
extrapan is sort of broadly flat ish, while Japan is
down significantly, and that kind of I think is what
explains our reasonable performance. A lot less Chinese outbound tourism
(11:07):
to Japan for shopping and staying on shore to do
that shopping. So that's one of the macro trends that
we've seen. I don't know if that's because of all
this rumors about earthquakes and this and that, but for
various reasons, the Chinese consumers seem to be staying put
on shore.
Speaker 5 (11:26):
So when you cater to that segment of the real
estate market, those higher end retailers, do they have expectations
about certain upgrades or modifications that the landlord in your
case has to provide them, And does that kind of
draw down or maybe force you to do a little
bit of cap X.
Speaker 6 (11:46):
Oh, it certainly does. So you know, in terms of
luxury moles, this sector in the mainland of China has
only been around for maybe twenty years or so, twenty
twenty five years, and so if you think about the
life time of a mall, that's kind of the time
that you need to definitely start looking into capex upgrades.
We've done quite a few. We've done three upgrades in
(12:09):
three of our separate malls across the mainland. They've been
well received. I think now in terms of the market cycles,
it's a relative down market, it's probably a good time
to be investing in oneself. That being said, because we're
in a down market, the tenants have pricing power. It's
a buyer's market for our tenants, and so we have
to make sure that we're on the ball in terms
(12:31):
of how those capex upgrades go and our ability to
deliver on operations and service.
Speaker 5 (12:37):
Okay, let's change gears talk a little bit about the
commercial office space and the return to work. What is
that situation right now and how is it impacting your business?
Speaker 6 (12:47):
So the return to work phenomenon is more important here
in Hong Kong, less important in the mainland of China
because in main and China they never really worked from
home except for during certain lockdowns here in China. What
we're hearing actually just over the past couple of weeks
has been that some of the big banks are asking
their staff to come back to the office. And you know,
(13:08):
there's the vacancies in central Hong Kong have been pretty high.
There's been a lot of new supply, but there's been
a lot of pressure on both occupancies and rents, and
I think that this request for people to come back
into the office is going to help with both of those.
I don't know if it can take up all of
the slack, but certainly it'll help.
Speaker 5 (13:26):
I have to ask you about high technology. There's been
so much focus right now in the market around artificial intelligence.
Are you tempted to do a little bit in the
data center end of things?
Speaker 6 (13:36):
You know, we looked at the data center end of
things probably ten years ago. At the time, we felt
like maybe we were even late to the game. In hindsight,
we probably weren't. So yes, we are tempted, if you may,
to look at that. But we've made this, We've basically
made the decision that that's not our business model. It's
(13:56):
real estate, but everything else about it is very different
from the location to operations, the capex required.
Speaker 5 (14:02):
What about your act sss to capital these days? Are
you having difficulty or is it not a problem for
a company such as yours.
Speaker 6 (14:09):
It's a little bit polarized. So we have a very
good access to capital. We just raised ten billion Hong
Kong dollars earlier this year, and you know that was
We did that at a very favorable rate as well,
you know, because we're a high quality and because people
trust us because they see our financials in the very
sound But definitely it's a polarized market and if you're
(14:33):
not in my camp, then it could be a very
difficult time to raise money right now.
Speaker 5 (14:38):
So you do business obviously, both on the mainland and
in Hong Kong. Talk to me a little bit about
what happens when you're dealing with two different currencies, the
Hong Kong dollar on one hand and the Chinese you
on on the other.
Speaker 6 (14:50):
I mean, it's it's like any other company that has
exposure to multiple currencies. We experienced a depreciation of the
R and B over the past half year, so our
numbers from mainland China are about one point four percent lower.
In reported currency, which is Hong Kong dollars, and you know,
thankfully the fluctuations haven't been too big, but when they
(15:13):
come around, you know, we do have to make sure
that we're on top of that in terms of currency
swaps and the way that we borrow, where we finance
in mainland China versus offshore, so on, so forth.
Speaker 5 (15:24):
So when you're dealing with let's call it a soft
market in relative terms, are you inspired maybe to expand
at this time or do you have any expansion plans?
Speaker 6 (15:33):
You know, we just announced one partnership in hang Jo,
which is the final city in which we have yet
to open our mall. And by expansion in partnership, what
I mean is we've agreed to rent the neighboring plot
to our shopping mall that we're building ourselves. So we
have our own asset, which is the main asset, and
(15:55):
we've rented the neighboring plot in which we will extend
our footprint, and that sort of represents our commitment to
the market, our conviction in the market as well. Honzo
is a super strong market in me and then China.
I think it's probably the hottest right now.
Speaker 5 (16:11):
Because of tech.
Speaker 6 (16:12):
But also because of commercial.
Speaker 5 (16:14):
Are there areas of the market that you're curious about
that you might begin to test And I'm thinking of
gaming being one industry. Does that interest you at all?
Speaker 6 (16:24):
I am always looking at different sub sectors of the market.
Gaming financially is great, it's just not our bread and butter, though.
It's something that we have agreed many years to stay
away from despite the financial returns, and so that's in particular,
it's not something that we're looking at. However, I think
(16:44):
it behooves us to make sure that we're looking at
all the opportunities in the market.
Speaker 5 (16:49):
Adriel, we'll leave it there, Thank you so very much.
He is Adriel Chan, the chairman of Hong Long Properties,
joining us from Hong Kong here on the Daybreak Asia Podcast.
Thanks for listening to today's episode of the Bloomberg Daybreak
Asia Edition podcast. Each weekday, we look at the story
shaping markets, finance, and geopolitics in the Asia Pacific. You
(17:12):
can find us on Apple, Spotify, the Bloomberg Podcast YouTube channel,
or anywhere else you listen. Join us again tomorrow for
insight on the market moves from Hong Kong to Singapore
and Australia. I'm Doug Chrisner, and this is Bloomberg
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:10):
Welcome to the Bloomberg Daybreak Asia podcast. I'm Dan Schwartzman.
We're just hours away from the August first tariff deadline
imposed by US President Donald Trump. We'll have more on
trade in a moment, plus a look at the Chinese
property sector. Later on, we'll bring you Doug Prisner's conversation
with Adriel Chan, chair of Hang Lung Properties. President Trump
(00:32):
will keep minimum global tariff rates at ten percent, according
to a White House statement Thursday. Meantime, it appears that
the US and Canada have not reached a trade agreement.
The White House says the terifate on Canada has now
been increased from twenty five to thirty five percent. Thailand
and Cambodi have received a nineteen percent tariff rate, while
Taiwan's was set at twenty. Switzerland was a standout the
(00:55):
rate of thirty nine percent. For a closer look, we
heard from Jenny Gordon, non resident fellow the Loewe Institute.
She spoke with Bloomberg's Sherry on In Heidi Stroud Watts
on the Asua trade.
Speaker 3 (01:05):
Jenny, really great to have you with us, particularly at
a time where the news and the tariff news continues
to move at such a frenetic pace. We're still sort
of a few hours out from the official deadline, of course,
But has anything surprised you about the numbers that we've seen,
and also the fact that, you know, obviously for maximum
leverage or negotiating pressure, this is pushed to the eleventh hour. Industry,
(01:29):
logistics exporters and importers, not a whole lot of time
to be able to prepare for these scenarios.
Speaker 4 (01:35):
No, no's that's definitely the case. And I think the
other problem is that nobody's clear that August first and
all these numbers will be the final round. You know,
Trumps could well ask for more at some other point
in time, and I suspect probably will, so I guess
there's that lack of certainty is a real concern for
(01:55):
most countries. I think the one that really surprised me
was thirty nine on Switzerland. I had thought they might
get kind of treated like the rest of Europe, but
that one was a surprise. The fact that it's fairly
common nineteen percent across Indonesia and Malaysia and many of
the other countries in Southeast Asia. I suspect is you know,
(02:20):
that's a common tariff, the high tariff on Lao and Cambodia.
There's very little trade and most of it is in
consumer goods. I think that's probably reflecting concerns about transshipment
and the ability to control transhipment from China, so it
might reflect that. But none of this is good. None
(02:41):
of this is good for the globe, nor actually for
the US consumer. And I think one of the big
things is the US imports a lot of inputs and
so costs are going to rise, even in non traded industries.
So you know, it's going to get more expensive to
set up a new business or a new factory in
(03:02):
the United States as a result of these tariffs on
the inputs as well as on the final goods.
Speaker 3 (03:10):
It's interesting because as you say, none of this is good.
Obviously ten percent tariff is better than a forty percent tariff,
and on that it's interesting. Australia isn't even on this
annex that we can see at the moment, so not
quite clear what the tariff is on the likes of
Australia for now. But do you think that there is
a level of complacency. Certainly that we've seen in financial
markets that well, these are you know, levels and tariff
(03:32):
rates that were better than expected and so therefore somehow
more palatable.
Speaker 4 (03:37):
Well it's funny, isn't it, Because as you go from
almost zero tariffs to ten, fifteen, twenty, you know, thirty
five percent, you're kind of saying, oh, thank goodness, I
don't have thirty five percent. I've only got fifteen percent.
And so you know, it's kind of interesting because really
the baseline was close to zero in most cases, and
(03:59):
so this this is a massive cost impost and you know,
you could almost think if you had one single uniform tariff,
then it would be largely a revenue raising exercise and
it would almost be like putting a value added tax
on the American consumer. And that'd be one way to
think about it. But this is creating different opportunities for
(04:20):
different countries because of different tariff rates. The actual rates
don't actually reflect very closely what those countries export to
the United States. So there doesn't seem to be an
overwhelming strategy of you know, countries that export mainly inputs
into production face lower tariffs and countries export final goods.
(04:42):
So there seems to be I can't quite work out
the rhymal logic to all of this, right, and I
don't know stock markets have woken up to it either.
Speaker 1 (04:52):
I'm trying to get through this annex and I'm not
sure if I'm reading this correctly. But is Brazil's tariffy
a ten now? Because then President Trump just threatened fifty
percent tariffs and in fact he was ready to impose them,
and he had linked some of that animosity with Brazil
and President Lula to political reasons around the former president
(05:15):
Bilsonaro as well. Right now, I'm seeing the annex, and
as we're trying to digest his new tariff rates, Brazil
is now back a ten percent. Jenny. When he comes
to linking geopolitical issues with economic sanctions like tariffs, has
President Trump changed the pleabook?
Speaker 4 (05:32):
Now? Well, I think the US has always used financial
sanctions for geopolitical purposes, and so they've tended to use
that rather than tariffs. And part of that was because,
you know, really they'd been part of this global commitment
to bring tariffs down across the world, and the only
sort of potential upside of Trump's threatening tariffs was to
(05:55):
help other countries who were struggling politically to bring down
their tariffs to do so in exchange for lower tariffs.
But I think this has moved the US into entirely
new territory. And this is why I don't think we
feel like we've seen the end of tariffs and that
this final set of numbers is the one that will
(06:16):
go ahead, because Trump has changed the way he uses tariffs,
and that just increases the uncertainty in the global economy,
and if you're trying to get investment going, that's the
last thing you want his uncertainty. Investors need certainty. And
so even though he's extracted promises of large amounts of
extra investment into the United States, that faces some real
(06:37):
barriers to go ahead, because one, you've got a shortage
of construction workers anyway in the United States, so constructing
new manufacturing plants is going to take time. And two,
it's just that you're not sure what that tariff ruling
is going to be. And if you know, the Trump
administration gets annoyed at a particular leader in a country
(06:59):
or a particular country for doing something, then they might
just sort of say, oh, we're going to raise your
tariff again. So it just completely undermines the certainty that's
needed for investment around world.
Speaker 1 (07:12):
And Jenny, we're also seeing that the White House is
really emphasizing the transship goods. So if there are any
ways to try to evade the thirty five percent tariff,
I think it's talking about Canada that there will be
subject to transhipment tariffs of forty percent. And that has
been a key issue right because we have seen other
countries like China, for example, trying to send goods through
(07:33):
Southeast Asian countries. How meaningful is it that this administration
is cracking down on transhipments.
Speaker 4 (07:41):
Well, I think that actually makes you know, more difficult
for China's strategy is to how does it bring down
you know, just the stretcham shipment is you just you know,
stick it in a container and take it to somewhere
and relabel it and ship it off. But the bigger
issue is all the componentory. That is where you've got
the integrated supply chain problem, where countries, particularly in Asia,
(08:06):
import a lot of components, add value to them and
may ship it back to China and then gets shipped
back again. The complexity of supply chains is enormous, and
so what Asian countries are looking to do is almost
have dual supply chains, so that they'll have one set
of supply chains that try to keep Chinese content out
in order to ship to the US, and then they'll
(08:27):
have another set of supply chains that use Chinese content
because of the price advantages of it. And so that's
I think from what I'm here from Asian colleagues, is
what they're trying to kind of work towards. And it
adds costs, so it just is less efficient than the
character and which means the prices of everything go up.
Speaker 2 (08:47):
That was Jenny Gordon, non Resident fellow at the Lower Institute,
speaking to Bloomberg. Sherry On and Heidi Shroud wants coming
up a conversation with Adrial Chen Chaff Hang Lung Properties
here on the Daybreak Asia podcast.
Speaker 5 (09:07):
Welcome back to the Daybreak Asia Podcast. I'm Doug Krisner.
Let's turn our attention now to the property markets in
both Hong Kong and on the Chinese mainland. Joining me
is the chairman of Hong Long Properties, Adrial Chan. Adrill
joins us from our studios in Hong Kong. Good of
you to make time to chat with me. I want
to bring up a source subject right out of the gate.
I'm sorry because I noted that net income for your
(09:31):
company was down fourteen percent year over year in the
latest period. Can you give me a sense of what's happening,
what you're struggling with right now?
Speaker 6 (09:39):
Thanks Doug. The decrease in net income really is as
a result of a lower number of sales of apartments,
and that is something that fluctuates for us. The primary
sector of our business is retail leasing and office leasing.
So commercial leasing is actually down low single digits, which
is a lot less bad than being down fourteen percent,
(10:03):
but that's the explanation for that. If you look into
retail and offices, retail has been actually surprisingly resilient in
the mainland. I think our share price has reacted relatively
well since the announcement of our results, and that was
a little bit of a surprise to me, honestly, But
I think that the market was perhaps expecting worse. So
(10:23):
we're down retail sales low single digits, but I think
people were probably expecting worse than that.
Speaker 5 (10:29):
So give me a sense of what your portfolio looks like.
When you talk about retail spaces, I think shopping malls
are you catering to retailers that perhaps service the higher
end of the market. Are these luxury type retailers primarily?
Absolutely so.
Speaker 6 (10:45):
Our biggest exposure is to the luxury brands, and as
we've been seeing over the past couple of days, the
luxury brands have been posting let's say, mixed results. Asia
extrapan is sort of broadly flat ish, while Japan is
down significantly, and that kind of I think is what
explains our reasonable performance. A lot less Chinese outbound tourism
(11:07):
to Japan for shopping and staying on shore to do
that shopping. So that's one of the macro trends that
we've seen. I don't know if that's because of all
this rumors about earthquakes and this and that, but for
various reasons, the Chinese consumers seem to be staying put
on shore.
Speaker 5 (11:26):
So when you cater to that segment of the real
estate market, those higher end retailers, do they have expectations
about certain upgrades or modifications that the landlord in your
case has to provide them, And does that kind of
draw down or maybe force you to do a little
bit of cap X.
Speaker 6 (11:46):
Oh, it certainly does. So you know, in terms of
luxury moles, this sector in the mainland of China has
only been around for maybe twenty years or so, twenty
twenty five years, and so if you think about the
life time of a mall, that's kind of the time
that you need to definitely start looking into capex upgrades.
We've done quite a few. We've done three upgrades in
(12:09):
three of our separate malls across the mainland. They've been
well received. I think now in terms of the market cycles,
it's a relative down market, it's probably a good time
to be investing in oneself. That being said, because we're
in a down market, the tenants have pricing power. It's
a buyer's market for our tenants, and so we have
to make sure that we're on the ball in terms
(12:31):
of how those capex upgrades go and our ability to
deliver on operations and service.
Speaker 5 (12:37):
Okay, let's change gears talk a little bit about the
commercial office space and the return to work. What is
that situation right now and how is it impacting your business?
Speaker 6 (12:47):
So the return to work phenomenon is more important here
in Hong Kong, less important in the mainland of China
because in main and China they never really worked from
home except for during certain lockdowns here in China. What
we're hearing actually just over the past couple of weeks
has been that some of the big banks are asking
their staff to come back to the office. And you know,
(13:08):
there's the vacancies in central Hong Kong have been pretty high.
There's been a lot of new supply, but there's been
a lot of pressure on both occupancies and rents, and
I think that this request for people to come back
into the office is going to help with both of those.
I don't know if it can take up all of
the slack, but certainly it'll help.
Speaker 5 (13:26):
I have to ask you about high technology. There's been
so much focus right now in the market around artificial intelligence.
Are you tempted to do a little bit in the
data center end of things?
Speaker 6 (13:36):
You know, we looked at the data center end of
things probably ten years ago. At the time, we felt
like maybe we were even late to the game. In hindsight,
we probably weren't. So yes, we are tempted, if you may,
to look at that. But we've made this, We've basically
made the decision that that's not our business model. It's
(13:56):
real estate, but everything else about it is very different
from the location to operations, the capex required.
Speaker 5 (14:02):
What about your act sss to capital these days? Are
you having difficulty or is it not a problem for
a company such as yours.
Speaker 6 (14:09):
It's a little bit polarized. So we have a very
good access to capital. We just raised ten billion Hong
Kong dollars earlier this year, and you know that was
We did that at a very favorable rate as well,
you know, because we're a high quality and because people
trust us because they see our financials in the very
sound But definitely it's a polarized market and if you're
(14:33):
not in my camp, then it could be a very
difficult time to raise money right now.
Speaker 5 (14:38):
So you do business obviously, both on the mainland and
in Hong Kong. Talk to me a little bit about
what happens when you're dealing with two different currencies, the
Hong Kong dollar on one hand and the Chinese you
on on the other.
Speaker 6 (14:50):
I mean, it's it's like any other company that has
exposure to multiple currencies. We experienced a depreciation of the
R and B over the past half year, so our
numbers from mainland China are about one point four percent lower.
In reported currency, which is Hong Kong dollars, and you know,
thankfully the fluctuations haven't been too big, but when they
(15:13):
come around, you know, we do have to make sure
that we're on top of that in terms of currency
swaps and the way that we borrow, where we finance
in mainland China versus offshore, so on, so forth.
Speaker 5 (15:24):
So when you're dealing with let's call it a soft
market in relative terms, are you inspired maybe to expand
at this time or do you have any expansion plans?
Speaker 6 (15:33):
You know, we just announced one partnership in hang Jo,
which is the final city in which we have yet
to open our mall. And by expansion in partnership, what
I mean is we've agreed to rent the neighboring plot
to our shopping mall that we're building ourselves. So we
have our own asset, which is the main asset, and
(15:55):
we've rented the neighboring plot in which we will extend
our footprint, and that sort of represents our commitment to
the market, our conviction in the market as well. Honzo
is a super strong market in me and then China.
I think it's probably the hottest right now.
Speaker 5 (16:11):
Because of tech.
Speaker 6 (16:12):
But also because of commercial.
Speaker 5 (16:14):
Are there areas of the market that you're curious about
that you might begin to test And I'm thinking of
gaming being one industry. Does that interest you at all?
Speaker 6 (16:24):
I am always looking at different sub sectors of the market.
Gaming financially is great, it's just not our bread and butter, though.
It's something that we have agreed many years to stay
away from despite the financial returns, and so that's in particular,
it's not something that we're looking at. However, I think
(16:44):
it behooves us to make sure that we're looking at
all the opportunities in the market.
Speaker 5 (16:49):
Adriel, we'll leave it there, Thank you so very much.
He is Adriel Chan, the chairman of Hong Long Properties,
joining us from Hong Kong here on the Daybreak Asia Podcast.
Thanks for listening to today's episode of the Bloomberg Daybreak
Asia Edition podcast. Each weekday, we look at the story
shaping markets, finance, and geopolitics in the Asia Pacific. You
(17:12):
can find us on Apple, Spotify, the Bloomberg Podcast YouTube channel,
or anywhere else you listen. Join us again tomorrow for
insight on the market moves from Hong Kong to Singapore
and Australia. I'm Doug Chrisner, and this is Bloomberg
Popular Podcasts
24/7 News: The Latest
The latest news in 4 minutes updated every hour, every day.
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.
The Clay Travis and Buck Sexton Show
The Clay Travis and Buck Sexton Show. Clay Travis and Buck Sexton tackle the biggest stories in news, politics and current events with intelligence and humor. From the border crisis, to the madness of cancel culture and far-left missteps, Clay and Buck guide listeners through the latest headlines and hot topics with fun and entertaining conversations and opinions.