MTR Expects Capex and Investment of HK$82.6 Billion from 2026 to 2028

MTR Corporation (00066) expects capital expenditures and investments of approximately HKD 82.6 billion from 2026 to 2028, including Hong Kong railway projects, property investment and development projects in Hong Kong, as well as mainland China and overseas investments.

CEO Yang Mei-chen stated that the company is actively advancing six new railway projects and will utilize new thinking and technology, such as extensive use of prefabricated components, to help manage costs and construction timelines. These large-scale railway projects are not only investments in Hong Kong’s future but also represent new growth points for the company’s business. From 2027 to 2034, more than 20 new stations will be completed gradually, significantly improving transportation connectivity across regions, with new communities also being developed subsequently.

Executive Director—Property and International Business Deng Zhi-hui pointed out that MTR has a large-scale railway construction plan, which will lead to numerous property development projects. Land development will be carried out prudently, depending on market conditions, demand, and overall land supply. The company aims to tender for the second phase of the Kam Sheung Road Station and the 16th Tuen Mun District Station in this financial year. Property development profits are affected by various factors and can vary each year; the company will strive to plan carefully and recognize revenue steadily.

Additionally, Yang Mei-chen admitted that despite the challenging environment for MTR malls, overall rental rates still face downward pressure. However, last year, mall occupancy rates remained close to 100%, with strong foot traffic, reflecting the resilience of the business.

Deng Zhi-hui stated that the retail market still faces challenges, as consumer behavior has changed significantly. He hopes these are only short-term impacts rather than long-term. The year started well, with increased passenger numbers in January and good retail sales performance. The company awaits government data for February and hopes that, with the advantage of railway station locations and near 100% occupancy rates, the trend can be maintained this year. Some retail categories are struggling, so the company has provided a lump-sum rent subsidy. Excluding these factors, rental performance is close to the overall market.

Last year, Hong Kong railway operations recorded a loss of HKD 63 million, expanding to HKD 254 million. Additionally, profits from Hong Kong station commercial activities decreased by 3% to HKD 3.66 billion, and Hong Kong passenger service profits fell by 8.2% to HKD 3.406 billion. Yang explained that the loss in Hong Kong railway operations last year was due to intense overall transportation competition, adverse weather reducing travel, and rising costs. The company will continue to work on managing railway operations effectively.

Regarding fare adjustments this year, the company will wait for the government to announce the nominal wage index for the transportation industry in December at the end of this month, then follow the mechanism to announce fare arrangements. The accumulated delayed fare increases will be capped based on the median household income according to the mechanism.