Fortune REIT Announces Interim Results for 2026

Leasing momentum remains solid, with occupancy rate reaching a six-year high of 96.4%. The retail market is gradually recovering, and rental rates are showing initial signs of stabilization.

$FORTUNE REIT (00778.HK)$ (as the manager (“ $FORTUNE REIT (00778.HK)$ ”) of Fortune REIT (“Fund managers”) announces $FORTUNE REIT (00778.HK)$ the unaudited results for the six months ended June 30, 2026 (“First half of 2026” or “Reporting Periodinterim financial results.

Disciplined cost management and interest savings mitigated downward pressure on revenue. $FORTUNE REIT (00778.HK)$ Recorded revenue of HK$8,208 million in the first half of 2026, a 3.9% year-on-year decline. Although rental adjustments from the prior year continued to affect income performance, the decline in renewal rents narrowed compared to the previous half-year period, reflecting gradual improvement in leasing market conditions. Rigorous cost control and lower financing costs partially offset the impact of declining revenue, resulting in net property income and distributable income of HK$5,843 million and HK$3,618 million, respectively. Fortune REIT maintained a 100% distribution payout ratio, with an interim distribution per unit of HK$0.1750, representing an annualized distribution yield of 8.0% based on the closing unit price as of June 30, 2026.

Strong lease renewals drove occupancy to a six-year high. The Hong Kong retail market continued its modest recovery, though structural transformation is persistently reshaping the retail landscape. In this environment, Fortune REIT has reinforced the resilience and income stability of its property portfolio through proactive asset management and flexible leasing strategies. During the first half of 2026, new leases signed totaled 375,000 square feet, representing 12.4% of the total portfolio area, while tenant retention remained at a healthy 82%. As of June 30, 2026, portfolio occupancy further improved to 96.4%. The continued rise in occupancy, coupled with a notably narrower rental decline on newly signed leases during the period, indicates initial signs of stabilization in rental income.

Optimizing tenant mix to enhance everyday consumer appeal and portfolio resilience.Fortune Malls continues to refine its tenant mix to align with evolving consumer preferences, while maintaining its core positioning centered on community services and daily necessities. The portfolio is gradually shifting toward more resilient sectors—those focused on services and experiential offerings that are less affected by e-commerce. The combined contribution from three key categories—F&B, services & education, and health & lifestyle & entertainment—now accounts for 60% of total rental income, up significantly from just 50% a few years ago. F&B remains a key driver of both revenue and foot traffic; services & education serve as a critical pillar supporting portfolio resilience; and health & lifestyle & entertainment has emerged as a new growth segment. During the Reporting Period, new tenants introduced include Xiao Noodles, Luckin Coffee, Snap Fitness, and Adventure Land, primarily in F&B, health & lifestyle, and experiential consumption, further enhancing the appeal of Fortune Malls and strengthening their connection to everyday life.

Targeted marketing initiatives drove footfall growth and customer engagement.Through festive promotions, family-oriented events, and targeted rewards programs, we further reinforced the positioning of Fortune Malls as vibrant community hubs, while also boosting mall footfall and customer interaction. In the first half of 2026, footfall and time-based carpark usage across the property portfolio increased by 1.4% and 3.6% year-on-year, respectively. Meanwhile, active members on the Fortune+ mobile app grew by 9% year-on-year, with registered spending rising by 16% year-on-year, reflecting strong popularity of the membership rewards program.

Ms. Yu Zhao, Chief Executive Officer of the Managerstated："Despite the ongoing structural transformation in Hong Kong's retail sector, Fortune REIT achieved solid operational progress in the first half of 2026. Benefiting from healthy lease renewal rates, the portfolio’s occupancy rate reached a six-year high, and rental downside pressure has eased as the foundation for retail recovery continues to broaden. These outcomes reflect the effectiveness of our proactive asset management, flexible leasing strategies, and continuous optimization of tenant mix."

"Looking ahead, we will remain committed to strengthening portfolio resilience, enhancing operational efficiency, and maintaining a robust balance sheet through prudent capital management. These core strengths will support Fortune REIT in delivering sustainable long-term value to unitholders."

Ms. Zhao Yu (left), Chief Executive Officer of Fortune Asset Management Limited, and Ms. Kong Yuanzhen (right), Deputy Chief Executive Officer, at the 2026 Interim Results Announcement Press Conference

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