Stock Code: SEHK: 00859.HK
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Corporate Profile
Properties Portfolio
- Jardine Center
No.50 Jardine's Bazaar
Causeway Bay
- Ground Floor and Cockloft Floor
No. 38 Jardine's Bazaar
Causeway Bay
- First floor of No. 38
Jardine's Bazaar and
No. 40 Jardine's Bazaar
Causeway Bay
- Shop No. 1 on Ground floor,
K.K. Mersion, Nos. 119,
121 & 125, Caine Road
- Ground Floor including Cockloft
No. 41 Jardine’s Bazaar
Causeway Bay
Hong Kong
- Ground Floor
No. 57 Jardine’s Bazaar
Causeway Bay
Hong Kong
Chairman’s Statement
Board of Directors
Other Information

Dear Shareholders

On behalf of the board of directors (the “Board”), I would like to present the annual report of Henry Group Holdings Limited (the “Company”) and its subsidiaries (collectively the “Group”) for the year ended 31 March 2017.

During the year under review, Hong Kong’s external business environment was difficult and challenging in early 2016 particularly after the result of the referendum in the United Kingdom during June last year to leave the European Union. However the global economy has shown some improvement in the second half of the year driven by stronger US currency demand and steady economic growth in the Mainland.

Turning to Hong Kong, as the pace of global economic growth weakened, the local economy expanded at a slower pace during the year under review, at 1.9%, as compared with the 2.4% growth in prior year. Notwithstanding the slowdown in inbound tourism and weakness in retail sales, the economic performance for the year was supported in part as Hong Kong’s total export of goods rose modestly while domestic demand remained resilient benefitting from the labour market maintaining full employment all through the year, dragged by the drop in visitor arrivals, the local retail market remained weak, consequently dampening the leasing activity and rents continued to decline and undergo adjustment period. Despite retail sentiment remaining sluggish, the Group’s tenant portfolio for the year enjoyed a good retention rate as it less exposed to the luxury retail sector.

Despite challenging business environment, the Group’s total revenue generated from investment properties in Hong Kong for the year ended 31 March 2017 was approximately HK$65.8 million, increasing 15.0% from approximately HK$57.2 million in 2016. Contributing factors to the rental growth included (i) full year effect of rental income contributed from two investment properties (namely, No. 57 and No. 41, ground level shops at Jardine Bazaar) acquired in December 2015; and (ii) benefited from good occupancy levels maintained throughout the year. The credit for the relatively good performance also goes to the management team for refining the tenant portfolio while restructuring the Group’s investment properties portfolio into a strategically well-balanced and diverse tenant portfolio better able to respond to changes in the market and business environment. Our tenant portfolio is now made up of differentiated vertical service-based retailers including quality spa and beauty services, premium food and beverage catering, etc., better able to respond to the growing demand of consumers for unique personal care services and healthy dining experiences which will provide a stable revenue contribution to the Group.

The Group’s investment properties portfolio in Hong Kong as of 31 March 2017 was approximately HK$3,065,000,000. A breakdown of properties valuation and the comparison of the revenue by property for two financial years ended 31 March 2017 are shown below:

  Properties Valuation as of
31 March
Revenue for the year ended 31 March  
Causeway Bay
Jardine Center, No. 50 Jardine’s Bazaar 1,470,000 29,522 26,955 9.5%
L’hart, Nos. 487–489 Lockhart Road 960,000 25,582 22,954 11.4%
Ground Floor, No. 38 Jardine’s Bazaar 100,000 2,245 2,085 7.7%
First Floor, Nos. 38–40 Jardine’s Bazaar 14,000 410 27 1,419%
Ground Floor, No. 41 Jardine’s Bazaar 135,000 2,532 1,009 151%
Ground Floor, No. 57 Jardine’s Bazaar 138,000 3,167 957 231%
Mid-levels West
Ground Floor of K.K. Mansion,
Nos. 119, 121, 125, Caine Road
50,000 119 1,328 (91)%
Island South
House No. 12, Villa Bel-Air, Bel-Air on the Peak 198,000 2,249 1,932 16%
Total 3,065,000 65,826 57,247 15%

Jardine Center
Jardine Center is located on No. 50 Jardine’s Bazaar, Causeway Bay. It is a 24-storey Ginza-style building marking the Group’s first adoption of Ginza-i-za-tion (our self-created word) — enabling retail businesses to operate above the ground floor level of buildings, giving them an effective CBD presence in a city. The concept has since proven successful over almost a decade of our ownership. Right in the heart of Causeway Bay, it is just steps away from Jardine’s Crescent, a traditional “must-visit” tourist destination in the city as recommended by the Hong Kong Tourism Board. As such, Jardine Center boasts a consistently high occupancy rate during the year. With structural frontage construction enhancement works at ground floor leasable areas and the lobby renovation completed in mid-September 2016, Jardine Center now has a higher appeal to consumers and is able to better cope with peak hour customer traffic, which will translate into higher rental income contributions to the Group. Jardine Center has also been relaunched as the brand “50 Jardine” to address changes in consumption trends

L’hart is located at Nos. 487–489 Lockhart Road — another Ginza-style building of the Group rising 26 storeys, it has the special attraction of a duplex floor layout offering retail tenants the opportunity to truly customise business space and reinforce the distinctive personality of their unique business style and brand. To optimise this advantage, during the year, L’hart has brought in to its podium ground level a renowned fashion brand (namely Giordano) in order to meet changing consumer preferences as well as attract new retailers in the mid-range-to-affordable retail goods segments.

Nos. 38, 41 and 57, Ground Level Shops at Jardine Bazaar
Besides two core ginza-style buildings, the Group’s investment properties portfolio also includes several other street-front shops at Nos. 38, 41 and 57 Jardine’s Bazaar neighbouring Jardine Center. These properties and Jardine Center together are presenting synergies conducive to enhancing return on investments for the Group.

Disposal of a Residential House No. 12 Villa Bel-Air — Discloseable Transaction
As announced on 11 May 2017, the Group entered into a provisional sale and purchase agreement with an independent third party to dispose a residential property situated at House No.12, Villa Bel-Air, Bel-Air on the Peak at a consideration of approximately HK$205,000,000. The disposal of the property constituted a discloseable transaction of the Company under the Listing Rules. Completion of the disposal of the property is to take place in August 2017.

The 2017 global financial market is expected to be challenging being buffeted by (i) the potential rise of the protectionist policy adopted by the new US administration after the beginning of the Trump administration in January 2017; (ii) probable likelihood of further raises in federal funds/interest rates to be announced by the Federal Reserve; and (iii) Brexit-related developments and the upcoming general elections in several major European countries. We anticipate market volatility to be intensified over time

Notwithstanding the above-mentioned external threats and uncertainties, Hong Kong still remains an attractive tourist destination and we foresee that the Hong Kong local retail sales market will continue to improve benefitting from (i) the change in China’s tourist policy of banning Chinese tour groups from visiting South Korea; (ii) Hong Kong being relatively safe for tourist as compared with Europe and the UK where there are frequent warnings of high terrorism threats; and (iii) despite falling arrivals Hong Kong remaining first among the top 100 city destinations as released by Euromonitor International in January 2017.

Going forward, management is confident that the investment properties portfolio will provide a stable contribution to the Group and will manage this premium assets driving rental growth by adopting a proactive and resilient management strategy in response to the rapidly changing local business environment. Taking into account that retail properties remained in negative territory, we will take a cautious approach to capture opportunities for acquiring potential premier investment properties to strengthen capacity of our investment property portfolio in order to build up the Group’s net asset value through future growth in a way to enhance shareholders returns.


I would also like to take this opportunity to express my gratitude to my fellow directors for their guidance, to all staff for their dedication and hard work and to our principal banks for their continuing support

Ng Ian

Hong Kong, 27 June 2017