By Clare Jim

HONG KONG, July 29 (Reuters) - High-end property developer Hongkong Land HKLD.SI said the Hong Kong office market in the Central financial district was showing signs of stabilising and that its portfolio had posted steady valuations for the first time since 2018.

The Hong Kong office market has been under pressure since 2019, with prices falling by more than 50% and vacancy rates reaching record highs at double digits. Some analysts said valuations could stay under pressure for the next couple years as new office spaces are expected to add to supply.

But Hongkong Land CFO Craig Beattie said the higher end of the market was stabilising.

"Potentially, this could be the point of turning for the Hong Kong office market in the prime space," Beattie said in an interview.

He cited the company's stable portfolio value, "stabilised rents" in the second quarter, an increase in demand and "the huge uptick in capital markets activity".

The developer's vacancies in Hong Kong's Central district declined to 6.9% at the end of June from 7.1% six months earlier.

Rents are still under pressure from the high market vacancy rate in the area, and HongKong Land expects average rent per square foot to continue to fall after a 7.8% decline in the first half versus a year ago.

HongKong Land on Tuesday reported an underlying profit of $297 million in the first six months, after an underlying loss of $7 million a year ago, saying it had made fewer provisions in mainland China and recorded better residential sales.

It expected the profit contribution from the build-to-sell segment to be substantially lower in the second half, however, due to lower profit margins in mainland China, where the home market remains challenging.

The developer, part of conglomerate Jardine Matheson JARD.SI, announced a strategy in October to refocus its activities exclusively on investment properties in major Asian cities and redirect capital out of its residential or build-to-sell division.

In April, HongKong Land sold the top nine floors of a tower in a complex, together with some retail space, to Hong Kong's bourse operator as its headquarters for HK$6.3 billion ($812.06 million), but Beattie said the company has no plans to break up its Central portfolio and sell off more.

However, Beattie said the company would like to invest more in Singapore, and it has also started studying new markets, including Tokyo, Seoul and Sydney.

(Reporting by Clare Jim; Editing by Barbara Lewis)

((clare.jim@thomsonreuters.com;))