Hong Kong’s largest developer Sun Hung Kai Properties Ltd. reported a 17% drop in full-year profit as the city’s property market continued to struggle amid interest rate hikes.

Underlying earnings, which exclude property revaluations, fell to HK$23.9 billion ($3 billion) in the year ended June 30, Sun Hung Kai said in a filing on Thursday. That compares with the average estimate of HK$27.6 billion from 11 analysts surveyed by Bloomberg.

Rising interest rates and increasing home supply have put pressure on Hong Kong developers with some cutting prices to lure buyers. Hong Kong property developers saw the lowest sales since 2019 for new residential units completed in the first six months of 2023, according to real estate agency JLL.

The city’s office market slump will also weigh on landlords like Sun Hung Kai. Office vacancy rate is at its all-time high as companies cut costs and supply increases. CBRE Group Inc. expects office rents to fall as much as 5% in 2023.