Consolidated Statement of Profit or Loss (continued) 2022 2021 HK$M HK$M Reference Restated Gross Profit 9,523 10,517 Gross profit decreased by HK$994 million. Gross profit from property investment, property trading and hotels decreased by HK$576 million, HK$287 million and HK$131 million respectively. Gross profit from property investment decreased by HK$576 million, mainly due to lower profits from the office properties in Hong Kong and from the retail properties (reflecting in part the rental concessions given to retail tenants) in the Chinese Mainland. Gross profit from property trading reflected the recognition of profits on the sale of EIGHT STAR STREET units in Hong Kong and a property in Fort Lauderdale in Florida, U.S.A. Hotel business recorded a loss of HK$120 million in 2022 compared with a gross profit of HK$11 million in 2021, mainly due to loss of hotel revenue from EAST Miami in the U.S.A. and lower hotel revenue in the Chinese Mainland. Operating Profit 9,024 7,834 Notes 6 The increase in operating profit of HK$1,190 million was principally and 8(a) due to a net valuation gain on investment properties in 2022 (compared with a net valuation loss in 2021), partly offset by lower profits from property investment and on sale of interests in investment properties in Hong Kong. A net valuation gain on investment properties of HK$801 million was recorded in 2022, compared with a net valuation loss of HK$1,947 million in 2021. Investment properties in Hong Kong recorded a net valuation loss of HK$1,127 million, principally due to lower rents. Investment properties in the Chinese Mainland recorded a net valuation gain of HK$1,539 million, principally due to a reduction of 25 to 50 basis points in the capitalisation rates applicable to certain investment properties in the portfolio. The investment properties at Brickell City Centre in Miami, U.S.A. recorded a valuation gain of HK$389 million, mainly due to higher rents. Administrative and selling expenses decreased by HK$175 million compared to 2021. The decrease principally reflected lower project related costs in 2022. 75 SWIRE PROPERTIES ANNUAL REPORT 2022