(HONG KONG) Hang Lung Properties Ltd, the best performer in the Hang Seng Property Index this year, said full-year profit excluding gains from revaluations more than doubled after it sold more apartments in Hong Kong.
Net income excluding revaluation gains and deferred tax rose to HK$6.67 billion (S$1.2 billion) in the 12 months to June 30 from HK$2.39 billion a year earlier, the developer said in a statement to the Hong Kong stock exchange yesterday. That fell short of the average estimate of HK$6.96 billion from 12 analysts surveyed by Bloomberg.
Hong Kong's third-biggest developer by market value said full-year property sales jumped after it sold more luxury apartments at its HarbourSide project. Hong Kong home prices have risen 38 per cent since early 2009, fuelled by record-low mortgage costs, near-zero interest rates on savings deposits and buying by rich mainland Chinese.
Luxury home prices in the city may rise 10 per cent by the end of this year after already gaining 10 per cent in the first half, property consultant Jones Lang LaSalle Inc said last week.
'I'm optimistic about Hong Kong's luxury market in the long run,' Hang Lung chairman Ronnie Chan said at a press briefing yesterday.
The company sold 425 garden-view units at the HarbourSide development in West Kowloon and recorded profit from property sales of HK$5.26 billion, compared with HK$3 million a year earlier.
The shares fell 3.1 per cent to HK$32.60 at the 4pm close in Hong Kong, while the Hang Seng Property Index lost one per cent. The stock is up 6.5 per cent this year compared with a 3.6 per cent decline in the seven-member property index.
Hang Lung, which has two office and shopping mall complexes in Shanghai and one in Shenyang and is building several others in cities such as Wuxi and Jinan, said projects in China are progressing 'well'.
Rental profit from mainland China rose 14 per cent to HK$1.6 billion, it said.
The developer is seeking to buy more prime sites in China, according to yesterday's statement.
'We'll stay focused on mainland China's high-end commercial leasing properties, and focus primarily on second-tier cities, which generate returns as good as the first-tier cities,' Mr Chan said. 'China's system is flooded with money.'
Rental profit from its Hong Kong investment properties was little changed at HK$2.1 billion. Hang Lung owns the Hong Kong headquarters of Standard Chartered plc.
Hang Lung also booked a HK$21.2 billion gain reflecting the increased value of real estate held for investment, against a HK$3.5 billion gain the same period the previous year.
Including those gains, net income for the year surged more than 400 per cent to HK$22.3 billion, or HK$5.30 a share, from HK$4.13 billion, or 99 Hong Kong cents a share, a year earlier.
The company is the first of the city's biggest builders to announce earnings. Cheung Kong (Holdings) Ltd, Hong Kong's second-biggest developer controlled by billionaire Li Ka-shing, will report on Aug 5. Sun Hung Kai Properties Ltd, the city's biggest developer, and Sino Land Co will likely report next month.
Hang Lung will pay a final dividend of 54 Hong Kong cents, from 51 cents last year. -- Bloomberg
Source: Business Times, 29 Jul 2010
Showing posts with label Overseas Property - Hong Kong. Show all posts
Showing posts with label Overseas Property - Hong Kong. Show all posts
Thursday, July 29, 2010
HK site fetches HK$10.4b, close to estimates
Auction atmosphere not as good as expected, with no aggressive bidding
(HONG KONG) Nan Fung Development Ltd and Wharf (Holdings) Ltd bid HK$10.4 billion (S$1.85 billion) for a building site in Hong Kong's Peak district yesterday at an auction that was close to surveyors' estimates.
The price for the Mt Nicholson Road site in one of the city's most exclusive residential areas was lower than the HK$10.5 billion median estimate of seven analysts in a Bloomberg News survey.
Their forecasts ranged from HK$8.9 billion to HK$11.5 billion, or HK$27,000 to HK$35,000 per square foot of gross floor area.
The government has been trying to curb a 38 per cent surge in home prices since the beginning of 2009 amid concerns housing is out of reach of ordinary residents. The Hang Seng Property Index turned lower after the auction result, ending down one per cent at the 4 pm close in Hong Kong.
'The market is worried we're going to have a bubble burst again like after 1997,' when the market peaked, said Trevor Cheung, an analyst at BNP Paribas in Hong Kong.
Hong Kong's luxury home prices have been fuelled by record-low mortgage costs, near-zero interest rates on saving deposits and buying by mainland Chinese. The city's home prices have gained 9.6 per cent this year and last week rose to the highest since 1997, according to Centaline in a July 23 report.
Luxury home prices may rise another 10 per cent in the second half if interest rates stay at two-decade lows and the local economy keeps growing, property consultant Jones Lang LaSalle said this month.
Nan Fung, a privately held developer, and Wharf will develop the site in a 50-50 venture, said Donald Choi, managing director at Nan Fung, after the auction. Wharf owns two of Hong Kong's largest shopping centres and the city's cable TV operator.
The site at 103 Mt Nicholson Road, formerly used for government staff quarters, has a total gross floor area of 324,861 square feet (30,180 square metres). The auction was initiated by the government, which has pledged to increase land supply as part of its measures to keep home prices in check.
About 30 per cent of the gross floor area at the plot will be used to build townhouses, while the rest will be used for apartments, Mr Choi said. At HK$10.5 billion, the developers paid HK$32,014 per square foot for gross floor area.
It is a 'unique site in a very rare location' and there are not that many sites at the Peak, Mr Choi said. He said the price was 'reasonable.' Martin Lee, the youngest son of Henderson Land billionaire chairman Lee Shau-kee, in May paid HK$1.82 billion, or a record HK$68,200 per square foot, for a site on Barker Road in the Peak district at an auction held by Jones Lang. Mr Lee said afterwards he would use the site to build houses for his family.
'Hong Kong land prices are already so expensive,' Hang Lung Properties Ltd chairman Ronnie Chan said at the company's full-year earnings briefing as the auction elsewhere in the city got underway. 'With that kind of price we can develop three or even four Hang Lung plazas in Shenyang' in north-eastern China, he said, referring to estimates of about HK$10 billion for the Peak site.
Most government land sales in recent years have been triggered by developers who promised to pay minimum amounts for sites on a list of available plots under the so-called land application system. Regular government land auctions were halted in 2004 to support falling home prices.
Yesterday's auction attracted four bidders, with only two vying for the site from HK$9 billion.
'The atmosphere was not as good as we expected; there was no aggressive bidding at all,' said Alnwick Chan, executive director at property consultant Knight Frank LLP.
'The demand is there but the market is relatively small. There's speculation that because there are three other sites coming up to auction catering to the middle to upper income groups, they're saving their resources for that.'
The government will sell two sites in the Kowloon area at auction on Aug 17 and a residential plot in Kowloon Tong district on Aug 31.
Demand for luxury properties is being supported by a lack of new supply and an influx of mainland Chinese buyers, who account for about 20 per cent of local residential transactions this year, Ricky Poon, managing director for residential sales at Colliers International Ltd, said before the auction.
'This is a normal price; for a luxury site, demand is always there because developers are not taking a lot of risks,' said James Cheung, a director at the surveyor unit of Centaline Properties Ltd, one of the city's biggest real estate agencies.
'There will continue to be a healthy growth in Hong Kong's property market.' Nan Fung paid HK$3.42 billion in May for a site in the city's Tung Chung area in the government's first land auction in the fiscal year that started April 1. The price was a third less than surveyors' estimates.
Sun Hung Kai Properties Ltd, the world's biggest developer by market value, last month bought a site in the Ho Man Tin district for HK$10.9 billion. At HK$12,540 per square foot, it was the highest price paid in a government auction in urban Hong Kong since the market peaked in 1997. The gross floor area for the site is 869,000 square feet.
Luxury homes in Hong Kong are those at least 1,000 square feet or costing at least HK$10 million. -- Bloomberg
Source: Business Times, 29 Jul 2010
(HONG KONG) Nan Fung Development Ltd and Wharf (Holdings) Ltd bid HK$10.4 billion (S$1.85 billion) for a building site in Hong Kong's Peak district yesterday at an auction that was close to surveyors' estimates.
The price for the Mt Nicholson Road site in one of the city's most exclusive residential areas was lower than the HK$10.5 billion median estimate of seven analysts in a Bloomberg News survey.
Their forecasts ranged from HK$8.9 billion to HK$11.5 billion, or HK$27,000 to HK$35,000 per square foot of gross floor area.
The government has been trying to curb a 38 per cent surge in home prices since the beginning of 2009 amid concerns housing is out of reach of ordinary residents. The Hang Seng Property Index turned lower after the auction result, ending down one per cent at the 4 pm close in Hong Kong.
'The market is worried we're going to have a bubble burst again like after 1997,' when the market peaked, said Trevor Cheung, an analyst at BNP Paribas in Hong Kong.
Hong Kong's luxury home prices have been fuelled by record-low mortgage costs, near-zero interest rates on saving deposits and buying by mainland Chinese. The city's home prices have gained 9.6 per cent this year and last week rose to the highest since 1997, according to Centaline in a July 23 report.
Luxury home prices may rise another 10 per cent in the second half if interest rates stay at two-decade lows and the local economy keeps growing, property consultant Jones Lang LaSalle said this month.
Nan Fung, a privately held developer, and Wharf will develop the site in a 50-50 venture, said Donald Choi, managing director at Nan Fung, after the auction. Wharf owns two of Hong Kong's largest shopping centres and the city's cable TV operator.
The site at 103 Mt Nicholson Road, formerly used for government staff quarters, has a total gross floor area of 324,861 square feet (30,180 square metres). The auction was initiated by the government, which has pledged to increase land supply as part of its measures to keep home prices in check.
About 30 per cent of the gross floor area at the plot will be used to build townhouses, while the rest will be used for apartments, Mr Choi said. At HK$10.5 billion, the developers paid HK$32,014 per square foot for gross floor area.
It is a 'unique site in a very rare location' and there are not that many sites at the Peak, Mr Choi said. He said the price was 'reasonable.' Martin Lee, the youngest son of Henderson Land billionaire chairman Lee Shau-kee, in May paid HK$1.82 billion, or a record HK$68,200 per square foot, for a site on Barker Road in the Peak district at an auction held by Jones Lang. Mr Lee said afterwards he would use the site to build houses for his family.
'Hong Kong land prices are already so expensive,' Hang Lung Properties Ltd chairman Ronnie Chan said at the company's full-year earnings briefing as the auction elsewhere in the city got underway. 'With that kind of price we can develop three or even four Hang Lung plazas in Shenyang' in north-eastern China, he said, referring to estimates of about HK$10 billion for the Peak site.
Most government land sales in recent years have been triggered by developers who promised to pay minimum amounts for sites on a list of available plots under the so-called land application system. Regular government land auctions were halted in 2004 to support falling home prices.
Yesterday's auction attracted four bidders, with only two vying for the site from HK$9 billion.
'The atmosphere was not as good as we expected; there was no aggressive bidding at all,' said Alnwick Chan, executive director at property consultant Knight Frank LLP.
'The demand is there but the market is relatively small. There's speculation that because there are three other sites coming up to auction catering to the middle to upper income groups, they're saving their resources for that.'
The government will sell two sites in the Kowloon area at auction on Aug 17 and a residential plot in Kowloon Tong district on Aug 31.
Demand for luxury properties is being supported by a lack of new supply and an influx of mainland Chinese buyers, who account for about 20 per cent of local residential transactions this year, Ricky Poon, managing director for residential sales at Colliers International Ltd, said before the auction.
'This is a normal price; for a luxury site, demand is always there because developers are not taking a lot of risks,' said James Cheung, a director at the surveyor unit of Centaline Properties Ltd, one of the city's biggest real estate agencies.
'There will continue to be a healthy growth in Hong Kong's property market.' Nan Fung paid HK$3.42 billion in May for a site in the city's Tung Chung area in the government's first land auction in the fiscal year that started April 1. The price was a third less than surveyors' estimates.
Sun Hung Kai Properties Ltd, the world's biggest developer by market value, last month bought a site in the Ho Man Tin district for HK$10.9 billion. At HK$12,540 per square foot, it was the highest price paid in a government auction in urban Hong Kong since the market peaked in 1997. The gross floor area for the site is 869,000 square feet.
Luxury homes in Hong Kong are those at least 1,000 square feet or costing at least HK$10 million. -- Bloomberg
Source: Business Times, 29 Jul 2010
Tuesday, July 27, 2010
Sun Hung Kai sells 300 Larvotto units
Sale brings in HK$8b for firm, partners as demand stays strong
(HONG KONG) Sun Hung Kai Properties Ltd, the world's biggest developer by market value, has sold 300 flats at an apartment project in Hong Kong's Island South district over the past two weekends.
The sale at the Larvotto project has brought in a total of HK$8 billion (S$1.4 billion) in revenue for Sun Hung Kai and partners Kerry Properties Ltd and Paliburg Holdings Ltd, Victor Lui, an executive director at Sun Hung Kai's agency arm, said in an e-mailed statement yesterday.
The developers will offer another 64 apartments for sale this week, Mr Lui said.
Demand for luxury homes in Hong Kong remains strong even as the government tries to curb a 38 per cent surge in home prices since the beginning of last year amid concerns that housing is becoming unaffordable.
Luxury property prices may rise 20 per cent this year on a lack of supply and low interest rates, property broker Jones Lang LaSalle Inc said in a report last week.
'The atmosphere is very hot,' said Louis Chan, managing director of residential sales at Centaline Property Agency Ltd.
'There's a lot of momentum in both new and used home markets.'
Apartments at Larvotto, which have been selling for an average of HK$30 million, will be around 1,500 square feet to 2,500 square feet.
Larvotto is the name of the main public beach in Monaco.
Larvotto has a total 715 units. Hong Kong developers sell units in developments in batches instead of offering them all at once, to gauge demand and take advantage of rising prices.
There were 86 used-home transactions at 10 of Hong Kong's biggest private housing complexes over the weekend, little-changed from a week earlier, Mr Chan said. -- Bloomberg
Source: Business Times, 27 Jul 2010
(HONG KONG) Sun Hung Kai Properties Ltd, the world's biggest developer by market value, has sold 300 flats at an apartment project in Hong Kong's Island South district over the past two weekends.
The sale at the Larvotto project has brought in a total of HK$8 billion (S$1.4 billion) in revenue for Sun Hung Kai and partners Kerry Properties Ltd and Paliburg Holdings Ltd, Victor Lui, an executive director at Sun Hung Kai's agency arm, said in an e-mailed statement yesterday.
The developers will offer another 64 apartments for sale this week, Mr Lui said.
Demand for luxury homes in Hong Kong remains strong even as the government tries to curb a 38 per cent surge in home prices since the beginning of last year amid concerns that housing is becoming unaffordable.
Luxury property prices may rise 20 per cent this year on a lack of supply and low interest rates, property broker Jones Lang LaSalle Inc said in a report last week.
'The atmosphere is very hot,' said Louis Chan, managing director of residential sales at Centaline Property Agency Ltd.
'There's a lot of momentum in both new and used home markets.'
Apartments at Larvotto, which have been selling for an average of HK$30 million, will be around 1,500 square feet to 2,500 square feet.
Larvotto is the name of the main public beach in Monaco.
Larvotto has a total 715 units. Hong Kong developers sell units in developments in batches instead of offering them all at once, to gauge demand and take advantage of rising prices.
There were 86 used-home transactions at 10 of Hong Kong's biggest private housing complexes over the weekend, little-changed from a week earlier, Mr Chan said. -- Bloomberg
Source: Business Times, 27 Jul 2010
Tuesday, July 20, 2010
Buyers snap up 92 flats at HK$40m each
Sun Hung Kai may put up another 50 apartments for sale this week
(HONG KONG) Sun Hung Kai Properties Ltd, the world's biggest developer by market value, will put another 50 luxury apartments up for sale in Hong Kong after buyers snapped up all 92 flats in a first batch put up for sale over the weekend.
The company sold the apartments at its Larvotto project at an average of about HK$40 million (S$7.1 million) per unit, bringing in about HK$4 billion in revenue, Sun Hung Kai said in a press release.
The new batch may go on sale in the middle of this week, it said, adding that their average sale prices may be 2 per cent higher.
'The price is reasonable for properties of this quality,' Eva Yeung, an agent at Centaline Property Agency Ltd who bought a HK$47 million unit on behalf of a Hong Kong-based client, said outside the project's showroom at the International Financial Centre building in the Central business district on Saturday.
Ms Yeung said the luxury property market in Hong Kong will be supported by the lack of supply and increased demand from Chinese buyers. That may counter Hong Kong government efforts to curb a 38 per cent surge in home prices since the beginning of 2009 amid concerns that housing is becoming unaffordable.
About 20 per cent of the buyers over the weekend were from mainland China, Sun Hung Kai said.
'Demand has exceeded supply,' Victor Lui, an executive director at Sun Hung Kai's agency arm, said in the press release. 'All of the units were sold within the first few hours after sales began.'
Sun Hung Kai fell 0.3 per cent to HK$111.50 at the close of trading in Hong Kong yesterday. The Hang Seng Property Index that tracks the performance of seven Hong Kong developers dropped 0.4 per cent.
Sun Hung Kai and partners Kerry Properties Ltd and Paliburg Holdings Ltd last week said they were putting the apartments in the Ap Lei Chau district up for sale for between HK$15,811 per square foot and HK$22,500 psf, a record for the district.
Second-hand units in Bel-Air, a luxury project in the nearby Pokfulam district, are selling for 'similar prices' to Larvotto, according to Buggle Lau, chief analyst at property agency Midland Holdings Ltd. New developments in the area will probably sell at a minimum of HK$15,000 psf, he said.
Luxury residential prices in the Island South district, which includes Repulse Bay and Stanley areas, grew 2.5 per cent in the second quarter, after rising by nearly 35 per cent in the previous nine months, according to property consultant Knight Frank LLP.
Luxury homes are those at least 1,000 square feet (93 sq meters) or costing at least HK$10 million.
Apartments at Larvotto, which has 715 units, will be around 1,500 to 2,500 sq ft. Larvotto is the name of the main public beach in Monaco.
Hong Kong developers sell units in developments in batches instead of offering them all at once to gauge demand and take advantage of rising prices.
The authorities have introduced rules on new home sales and are investigating cancelled sales at a Henderson Land Development Co luxury apartment project.
Henderson last month cancelled 20 transactions at its project in the Mid-Levels district, including the one the company claimed would fetch a record HK$88,000 psf, prompting lawmakers to call for an investigation.
The Legislative Council on July 12 held its first special meeting to discuss the collapsed sales, which were worth HK$2.67 billion, according to Henderson.
Since last year Hong Kong has raised the requirement for downpayments on luxury homes and cracked down on misleading marketing by developers, including the use of show flats, after officials expressed concern that prices were rising too fast. - Bloomberg
Source: Business Times, 20 Jul 2010
(HONG KONG) Sun Hung Kai Properties Ltd, the world's biggest developer by market value, will put another 50 luxury apartments up for sale in Hong Kong after buyers snapped up all 92 flats in a first batch put up for sale over the weekend.
The company sold the apartments at its Larvotto project at an average of about HK$40 million (S$7.1 million) per unit, bringing in about HK$4 billion in revenue, Sun Hung Kai said in a press release.
The new batch may go on sale in the middle of this week, it said, adding that their average sale prices may be 2 per cent higher.
'The price is reasonable for properties of this quality,' Eva Yeung, an agent at Centaline Property Agency Ltd who bought a HK$47 million unit on behalf of a Hong Kong-based client, said outside the project's showroom at the International Financial Centre building in the Central business district on Saturday.
Ms Yeung said the luxury property market in Hong Kong will be supported by the lack of supply and increased demand from Chinese buyers. That may counter Hong Kong government efforts to curb a 38 per cent surge in home prices since the beginning of 2009 amid concerns that housing is becoming unaffordable.
About 20 per cent of the buyers over the weekend were from mainland China, Sun Hung Kai said.
'Demand has exceeded supply,' Victor Lui, an executive director at Sun Hung Kai's agency arm, said in the press release. 'All of the units were sold within the first few hours after sales began.'
Sun Hung Kai fell 0.3 per cent to HK$111.50 at the close of trading in Hong Kong yesterday. The Hang Seng Property Index that tracks the performance of seven Hong Kong developers dropped 0.4 per cent.
Sun Hung Kai and partners Kerry Properties Ltd and Paliburg Holdings Ltd last week said they were putting the apartments in the Ap Lei Chau district up for sale for between HK$15,811 per square foot and HK$22,500 psf, a record for the district.
Second-hand units in Bel-Air, a luxury project in the nearby Pokfulam district, are selling for 'similar prices' to Larvotto, according to Buggle Lau, chief analyst at property agency Midland Holdings Ltd. New developments in the area will probably sell at a minimum of HK$15,000 psf, he said.
Luxury residential prices in the Island South district, which includes Repulse Bay and Stanley areas, grew 2.5 per cent in the second quarter, after rising by nearly 35 per cent in the previous nine months, according to property consultant Knight Frank LLP.
Luxury homes are those at least 1,000 square feet (93 sq meters) or costing at least HK$10 million.
Apartments at Larvotto, which has 715 units, will be around 1,500 to 2,500 sq ft. Larvotto is the name of the main public beach in Monaco.
Hong Kong developers sell units in developments in batches instead of offering them all at once to gauge demand and take advantage of rising prices.
The authorities have introduced rules on new home sales and are investigating cancelled sales at a Henderson Land Development Co luxury apartment project.
Henderson last month cancelled 20 transactions at its project in the Mid-Levels district, including the one the company claimed would fetch a record HK$88,000 psf, prompting lawmakers to call for an investigation.
The Legislative Council on July 12 held its first special meeting to discuss the collapsed sales, which were worth HK$2.67 billion, according to Henderson.
Since last year Hong Kong has raised the requirement for downpayments on luxury homes and cracked down on misleading marketing by developers, including the use of show flats, after officials expressed concern that prices were rising too fast. - Bloomberg
Source: Business Times, 20 Jul 2010
Thursday, July 15, 2010
Failed HK flat sale: Police raid developer's HQ
Officers seize papers linked to deal on 20 luxury units, including 'world's priciest flat'
HONG KONG: Hong Kong police yesterday raided the headquarters of a major property developer embroiled in a controversy over the collapsed sale of what was billed as the world's priciest flat.
Officers from the financial hub's Commercial Crime Bureau swooped on Henderson Land Development's office in Hong Kong's financial district and took documents believed to be connected to the failed sale.
'As a result of the execution of the search warrants, we have seized a quantity of documents, which will be investigated and looked into further,' said Police Commissioner Tang King Shing.
'Today, we also invited a number of people back to the commercial crime bureau to assist in our investigations. At this moment, the police have arrested no persons concerning this case,' he added.
Henderson Land said it was cooperating with the authorities.
'Our company has provided relevant documents and appointed staff to help in the investigation,' the developer said in an e-mail statement in Chinese.
Inspectors also searched a law firm allegedly connected to the failed sale of luxury flats at the exclusive 39 Conduit Road towers in the city's Mid-Levels residential area, local radio RTHK reported.
'At this stage, it's really hard to tell what's going to come out from the investigation,' said Professor Eddie Hui of the building and real estate department of Hong Kong Polytechnic University.
'Even if the police took some documents from their office, it still does not mean they have committed any wrongdoing. We have to be careful in drawing any premature conclusions.'
Analysts said they expected the Hong Kong developer's shares, which have lagged behind its peers, to come under pressure in the days ahead.
Last month, the Hong Kong government said it was looking into the cancelled sale of 20 multimillion-dollar flats developed by Henderson in Hong Kong, while legislators have been questioning the developer's practices over the past few weeks.
The cancellations included a duplex unit that had fetched a global record price of HK$71,280 (S$12,695) per square foot last October. In the end, only four units were sold in that development, Henderson Land said.
Critics have demanded a probe, asking why the cancellations came to light only eight months after the announcement of the sales, which helped hike prices of the city's luxury residential flats and stoked concerns about a property bubble in the former British colony.
Questions have also been raised about the relatively small deposit that Henderson kept after the failed sales, and why all the buyers appeared to have used the same law firm to process the transactions.
Henderson Land responded with advertisements in major newspapers saying the purchases were genuine and that the company was not connected with the buyers. It has said it will cooperate with the probe.
REUTERS, AGENCE FRANCE-PRESSE, BLOOMBERGS
Source: Straits Times, 15 Jul 2010
HONG KONG: Hong Kong police yesterday raided the headquarters of a major property developer embroiled in a controversy over the collapsed sale of what was billed as the world's priciest flat.
Officers from the financial hub's Commercial Crime Bureau swooped on Henderson Land Development's office in Hong Kong's financial district and took documents believed to be connected to the failed sale.
'As a result of the execution of the search warrants, we have seized a quantity of documents, which will be investigated and looked into further,' said Police Commissioner Tang King Shing.
'Today, we also invited a number of people back to the commercial crime bureau to assist in our investigations. At this moment, the police have arrested no persons concerning this case,' he added.
Henderson Land said it was cooperating with the authorities.
'Our company has provided relevant documents and appointed staff to help in the investigation,' the developer said in an e-mail statement in Chinese.
Inspectors also searched a law firm allegedly connected to the failed sale of luxury flats at the exclusive 39 Conduit Road towers in the city's Mid-Levels residential area, local radio RTHK reported.
'At this stage, it's really hard to tell what's going to come out from the investigation,' said Professor Eddie Hui of the building and real estate department of Hong Kong Polytechnic University.
'Even if the police took some documents from their office, it still does not mean they have committed any wrongdoing. We have to be careful in drawing any premature conclusions.'
Analysts said they expected the Hong Kong developer's shares, which have lagged behind its peers, to come under pressure in the days ahead.
Last month, the Hong Kong government said it was looking into the cancelled sale of 20 multimillion-dollar flats developed by Henderson in Hong Kong, while legislators have been questioning the developer's practices over the past few weeks.
The cancellations included a duplex unit that had fetched a global record price of HK$71,280 (S$12,695) per square foot last October. In the end, only four units were sold in that development, Henderson Land said.
Critics have demanded a probe, asking why the cancellations came to light only eight months after the announcement of the sales, which helped hike prices of the city's luxury residential flats and stoked concerns about a property bubble in the former British colony.
Questions have also been raised about the relatively small deposit that Henderson kept after the failed sales, and why all the buyers appeared to have used the same law firm to process the transactions.
Henderson Land responded with advertisements in major newspapers saying the purchases were genuine and that the company was not connected with the buyers. It has said it will cooperate with the probe.
REUTERS, AGENCE FRANCE-PRESSE, BLOOMBERGS
Source: Straits Times, 15 Jul 2010
Tuesday, July 13, 2010
HK should regulate sales of apartments: lawmaker
More transparency on developers' sales tactics needed
(HONG KONG) The government should regulate Hong Kong developers' sales tactics to increase transparency, a lawmaker said yesterday, as the territory's Parliament held a special session on the collapse of HK$2.67 billion (S$474.89 million) of apartment sales by Henderson Land Development Co.
The Parliament held the meeting, which Henderson declined to attend, to discuss the 20 luxury apartment sales that fell through, prompting legislators' calls for the government to investigate the transactions.
The government increased its scrutiny of developers after Henderson said in October that it sold an apartment at 39 Conduit Road in the Mid-Levels district on Hong Kong Island for a record HK$88,000 a square foot.
'What's happening is a failure of existing regulations,' Wong Kwok-hing, chairman of the Legislative Council's Housing Committee, said at the meeting to discuss the collapsed sales.
Henderson said in a press release its appearance in yesterday's meeting would be 'inappropriate' because it has 'sufficiently disclosed' details on the transactions and an investigation is still under way.
The government, which is trying to curb a 38 per cent surge in home prices since the beginning of 2009, introduced in June nine rules on new home sales, including the use of show flats developers use to entice buyers before a building is completed. Those measures have no statutory power and are rules the Real Estate Developers Association 'advise' its members to follow, Mr Wong said.
Hong Kong's government has sought details from Henderson, controlled by billionaire Lee Shau-kee, on the sale agreements after 20 of the 24 sales at 39 Conduit Road were cancelled.
Henderson has repeatedly denied any wrongdoing in the way it handled the transactions. Yesterday it said in a statement published in the South China Morning Post that 'the company strongly rejects' allegations that there have been irregularities in the sale of the apartments.
The government has submitted all the letters exchanged between Henderson and the Lands Department to the Legislative Council (Legco), Permanent Secretary for Transport and Housing Duncan Pescod told lawmakers yesterday. He and other government officials attending the meeting declined to comment on the investigations into the collapsed sales.
Hong Kong police and other law enforcement agencies are investigating the sales at 39 Conduit Road, Transport and Housing Secretary Eva Cheng told lawmakers during a July 5 Legco session. Ms Cheng declined to specify the other agencies and give a schedule for the investigation.
The lawmakers will meet again to discuss the sales, Mr Wong said, without giving a date. The meeting was attended by officials from the government's Lands Department and Housing Authority.
'Setting up legislations to regulate apartment sales would be unnecessary,' said Patrick Chow, head of research at property agency Ricacorp Ltd in Hong Kong. 'All we need is more clearly defined rules.'
Henderson shares rose 0.6 per cent to HK$47.50 at the close of trading in Hong Kong. -- Bloomberg
Source: Business Times, 13 Jul 2010
(HONG KONG) The government should regulate Hong Kong developers' sales tactics to increase transparency, a lawmaker said yesterday, as the territory's Parliament held a special session on the collapse of HK$2.67 billion (S$474.89 million) of apartment sales by Henderson Land Development Co.
The Parliament held the meeting, which Henderson declined to attend, to discuss the 20 luxury apartment sales that fell through, prompting legislators' calls for the government to investigate the transactions.
The government increased its scrutiny of developers after Henderson said in October that it sold an apartment at 39 Conduit Road in the Mid-Levels district on Hong Kong Island for a record HK$88,000 a square foot.
'What's happening is a failure of existing regulations,' Wong Kwok-hing, chairman of the Legislative Council's Housing Committee, said at the meeting to discuss the collapsed sales.
Henderson said in a press release its appearance in yesterday's meeting would be 'inappropriate' because it has 'sufficiently disclosed' details on the transactions and an investigation is still under way.
The government, which is trying to curb a 38 per cent surge in home prices since the beginning of 2009, introduced in June nine rules on new home sales, including the use of show flats developers use to entice buyers before a building is completed. Those measures have no statutory power and are rules the Real Estate Developers Association 'advise' its members to follow, Mr Wong said.
Hong Kong's government has sought details from Henderson, controlled by billionaire Lee Shau-kee, on the sale agreements after 20 of the 24 sales at 39 Conduit Road were cancelled.
Henderson has repeatedly denied any wrongdoing in the way it handled the transactions. Yesterday it said in a statement published in the South China Morning Post that 'the company strongly rejects' allegations that there have been irregularities in the sale of the apartments.
The government has submitted all the letters exchanged between Henderson and the Lands Department to the Legislative Council (Legco), Permanent Secretary for Transport and Housing Duncan Pescod told lawmakers yesterday. He and other government officials attending the meeting declined to comment on the investigations into the collapsed sales.
Hong Kong police and other law enforcement agencies are investigating the sales at 39 Conduit Road, Transport and Housing Secretary Eva Cheng told lawmakers during a July 5 Legco session. Ms Cheng declined to specify the other agencies and give a schedule for the investigation.
The lawmakers will meet again to discuss the sales, Mr Wong said, without giving a date. The meeting was attended by officials from the government's Lands Department and Housing Authority.
'Setting up legislations to regulate apartment sales would be unnecessary,' said Patrick Chow, head of research at property agency Ricacorp Ltd in Hong Kong. 'All we need is more clearly defined rules.'
Henderson shares rose 0.6 per cent to HK$47.50 at the close of trading in Hong Kong. -- Bloomberg
Source: Business Times, 13 Jul 2010
Tuesday, July 6, 2010
HK home sales hit 14-month low in June
(HONG KONG) Hong Kong's home sales fell to the lowest level in 14 months in June, as the city's government tried to rein in rising prices with rules on new home sales.
Total sales of residential units fell to HK$33 billion (S$5.9 billion) last month from HK$42.8 billion in May, the Land Registry said on its website yesterday.
By volume, the number of residential units changing hands declined to 9,130 in June from 11,014 in May, according to the government department.
Hong Kong has been stepping up measures to curb home prices that have increased 8 per cent this year, adding to the 29 per cent advance in 2009.
Apart from raising stamp duty on luxury home transactions and increasing land supply, the government is also clamping down on developers' sales tactics to boost transparency.
'The fall is like a hiccup in the market in response to government's rules on new home sales announced in April,' Nicole Wong, a Hong Kong-based regional head of property research at CLSA Ltd, said yesterday in an interview.
'There is no means for the government to reverse the imbalance resulting from short-term supply shortages,' Ms Wong said.
Ms Wong expects home price in the city will rise 15 per cent for 2010.
Today's sales from the Land Registry is a 'lagging indicator' of the property market as it showed data of transactions made in April and May, Ms Wong said.
The government asked developers to provide a show flat that will be in the exact same condition as when the home is built and ready for delivery, and to publish asking prices three days before starting to sell unfinished apartments, Financial Secretary John Tsang said on April 21.
Sun Hung Kai Properties Ltd, the city's biggest developer by market value, on June 8 paid HK$10.9 billion for a residential site in the Ho Man Tin district.
The price, which beat a Bloomberg News estimate by 30 per cent, is the highest paid in a government auction in urban Hong Kong since the market peaked in 1997.
'The record land sale in Ho Man Tin in June has boosted the housing market again,' Buggle Lau, chief property analyst at realty company Midland Holdings Ltd, said in Hong Kong. 'I expect the home sales volume will go up in July,' he added.
Hong Kong's home prices rose to the highest in five weeks, Centaline Property Agency Ltd said on July 2.
The index of existing home prices rose to 80.12 as of June 27, compared with 79.12 a week earlier, according to Centaline, one of the city's biggest property agencies. -- Bloomberg
Source: Business Times, 6 Jul 2010
Total sales of residential units fell to HK$33 billion (S$5.9 billion) last month from HK$42.8 billion in May, the Land Registry said on its website yesterday.
By volume, the number of residential units changing hands declined to 9,130 in June from 11,014 in May, according to the government department.
Hong Kong has been stepping up measures to curb home prices that have increased 8 per cent this year, adding to the 29 per cent advance in 2009.
Apart from raising stamp duty on luxury home transactions and increasing land supply, the government is also clamping down on developers' sales tactics to boost transparency.
'The fall is like a hiccup in the market in response to government's rules on new home sales announced in April,' Nicole Wong, a Hong Kong-based regional head of property research at CLSA Ltd, said yesterday in an interview.
'There is no means for the government to reverse the imbalance resulting from short-term supply shortages,' Ms Wong said.
Ms Wong expects home price in the city will rise 15 per cent for 2010.
Today's sales from the Land Registry is a 'lagging indicator' of the property market as it showed data of transactions made in April and May, Ms Wong said.
The government asked developers to provide a show flat that will be in the exact same condition as when the home is built and ready for delivery, and to publish asking prices three days before starting to sell unfinished apartments, Financial Secretary John Tsang said on April 21.
Sun Hung Kai Properties Ltd, the city's biggest developer by market value, on June 8 paid HK$10.9 billion for a residential site in the Ho Man Tin district.
The price, which beat a Bloomberg News estimate by 30 per cent, is the highest paid in a government auction in urban Hong Kong since the market peaked in 1997.
'The record land sale in Ho Man Tin in June has boosted the housing market again,' Buggle Lau, chief property analyst at realty company Midland Holdings Ltd, said in Hong Kong. 'I expect the home sales volume will go up in July,' he added.
Hong Kong's home prices rose to the highest in five weeks, Centaline Property Agency Ltd said on July 2.
The index of existing home prices rose to 80.12 as of June 27, compared with 79.12 a week earlier, according to Centaline, one of the city's biggest property agencies. -- Bloomberg
Source: Business Times, 6 Jul 2010
Tuesday, June 29, 2010
HK's mortgage loan approval up 34% in May
(HONG KONG) New mortgage loans approved in Hong Kong in May rose by 34.3 per cent from a year earlier and increased 0.1 per cent in value terms from April, figures from the Hong Kong Monetary Authority (HKMA) showed.
New loans approved in May totalled HK$37.8 billion (S$6.74 billion), the HKMA said yesterday. Month-on-month figures are not seasonally adjusted.
Loan approvals for new property rose 0.7 per cent month-on-month in May, while loan demand for mortgages on existing property fell 4.5 per cent. Approvals for refinancing loans increased by 10.5 per cent against April.
Following is a summary of data from the authority for May compared with April: The number of new mortgage applications fell 11.1 per cent to 20,283 from the previous month's 22,818.
The value of new mortgage loans drawn down increased by 12.7 per cent to HK$28.9 billion.
The outstanding value of mortgage loans increased 1.5 per cent to HK$675.6 billion.
The mortgage delinquency ratio and re-scheduled loan ratio were steady at 0.03 per cent and 0.06 per cent, respectively. -- Reuters
Source: Business Times, 29 Jun 2010
New loans approved in May totalled HK$37.8 billion (S$6.74 billion), the HKMA said yesterday. Month-on-month figures are not seasonally adjusted.
Loan approvals for new property rose 0.7 per cent month-on-month in May, while loan demand for mortgages on existing property fell 4.5 per cent. Approvals for refinancing loans increased by 10.5 per cent against April.
Following is a summary of data from the authority for May compared with April: The number of new mortgage applications fell 11.1 per cent to 20,283 from the previous month's 22,818.
The value of new mortgage loans drawn down increased by 12.7 per cent to HK$28.9 billion.
The outstanding value of mortgage loans increased 1.5 per cent to HK$675.6 billion.
The mortgage delinquency ratio and re-scheduled loan ratio were steady at 0.03 per cent and 0.06 per cent, respectively. -- Reuters
Source: Business Times, 29 Jun 2010
Monday, June 28, 2010
HK police get in the act over cancelled flat sales
(HONG KONG) Police are probing the controversial sale of luxury flats that fell through months after its developer said that one of them had set a world-record price, a report said yesterday.
The Sunday Morning Post, citing a Transport and Housing Bureau document, said that police had joined the probe into the sale after the government launched an investigation into the deal earlier this month.
A police spokesman could not be immediately reached for comment.
Property giant Henderson Land Development reported this month that the sale of as many as 20 out of 24 units at its exclusive 39 Conduit Road towers in the city's Mid-Levels residential area had been cancelled. The scrapped deals included what was supposed to be the world's most expensive apartment, a 6,158-square-foot duplex that Henderson said in October had sold for US$56.6 million.
Critics demanded a probe and asked why the cancellations came to light only eight months after the sales announcement, which helped hike prices for luxury residential flats in Hong Kong and stoked concerns about a property bubble.
Henderson has also been condemned for selectively numbering the floors on the 46-storey building as a ploy to attract Chinese buyers. The supposed 68th-floor duplex that snatched world-record price was actually on the 43rd and 44th floors, according to reports. It was so numbered because '68' sounds like 'continuing fortune' in Chinese and is considered lucky.
A Henderson official could not be immediately reached yesterday, but a spokeswoman told the Post that the company would cooperate with any police probe. -- AFP
Source: Business Times, 28 Jun 2010
The Sunday Morning Post, citing a Transport and Housing Bureau document, said that police had joined the probe into the sale after the government launched an investigation into the deal earlier this month.
A police spokesman could not be immediately reached for comment.
Property giant Henderson Land Development reported this month that the sale of as many as 20 out of 24 units at its exclusive 39 Conduit Road towers in the city's Mid-Levels residential area had been cancelled. The scrapped deals included what was supposed to be the world's most expensive apartment, a 6,158-square-foot duplex that Henderson said in October had sold for US$56.6 million.
Critics demanded a probe and asked why the cancellations came to light only eight months after the sales announcement, which helped hike prices for luxury residential flats in Hong Kong and stoked concerns about a property bubble.
Henderson has also been condemned for selectively numbering the floors on the 46-storey building as a ploy to attract Chinese buyers. The supposed 68th-floor duplex that snatched world-record price was actually on the 43rd and 44th floors, according to reports. It was so numbered because '68' sounds like 'continuing fortune' in Chinese and is considered lucky.
A Henderson official could not be immediately reached yesterday, but a spokeswoman told the Post that the company would cooperate with any police probe. -- AFP
Source: Business Times, 28 Jun 2010
Thursday, June 24, 2010
Henderson queried 7th time on home sales
Henderson Land Development, the Hong Kong developer controlled by billionaire Lee Shau Kee, was questioned for a seventh time by the government over luxury apartment transactions that spurred efforts to cool home prices and a crackdown on marketing tactics.
The Lands Department asked the company to provide copies of title deeds and additional details on how it calculated the interest penalty for late payments, a spokesperson said. Henderson was given seven days to respond.
The Hong Kong government has been scrutinising developers’ sales techniques since Henderson’s October announcement it sold an apartment at the 39 Conduit Road project in the Mid-Levels district for a world-record of HK$88,000 ($15,300) per sqf. The company said the sales of 20 apartments in the complex collapsed after most buyers pulled out.
“The reason why the government is asking all these questions is they want to appear to the public they are tough” on developers’ selling tactics, Hong Kong-based shareholder activist David Webb said.
Source: Today, 24 Jun 2010
The Lands Department asked the company to provide copies of title deeds and additional details on how it calculated the interest penalty for late payments, a spokesperson said. Henderson was given seven days to respond.
The Hong Kong government has been scrutinising developers’ sales techniques since Henderson’s October announcement it sold an apartment at the 39 Conduit Road project in the Mid-Levels district for a world-record of HK$88,000 ($15,300) per sqf. The company said the sales of 20 apartments in the complex collapsed after most buyers pulled out.
“The reason why the government is asking all these questions is they want to appear to the public they are tough” on developers’ selling tactics, Hong Kong-based shareholder activist David Webb said.
Source: Today, 24 Jun 2010
Saturday, June 19, 2010
Mega sales flop of HK luxurious apartments under probe
THE Hong Kong government said it is looking into the cancelled sales of Henderson Land apartments, which have pushed down the developer's shares this week.
Earlier this week, Henderson announced that it would record a loss of HK$734 million (S$130 million) from the cancellation of sales of 20 luxury flats in Hong Kong, which would be reflected in its first-half results. The cancellations included a duplex unit that had fetched a global record price of HK$71,280 per square foot last October.
'Any fraud or deception in property sales is totally unacceptable,' the government said in a statement issued late on Thursday.
The government said it was concerned after only four out of 24 previously announced sales were completed, and it would not tolerate any 'forged non-bona fide transactions'.
Regulatory and law enforcement agencies were looking into and following up on the case, the government said, without elaborating.
Henderson Land said it would cooperate with the probe. 'We welcome the action and will provide all necessary information because we believe this will help us clarify to the public,' said Henderson Land spokeswoman Bonnie Ngan.
On Thursday, Henderson Land vice- chairman Peter KK Lee, son of billionaire Lee Shau Kee, told Reuters that he expected no more sale cancellations here in the near term.
The cancellations led some research houses, such as DBS, Goldman Sachs and JPMorgan, to either downgrade the stock or lower their price targets. -- Reuters
Source: Business Times, 19 Jun 2010
Earlier this week, Henderson announced that it would record a loss of HK$734 million (S$130 million) from the cancellation of sales of 20 luxury flats in Hong Kong, which would be reflected in its first-half results. The cancellations included a duplex unit that had fetched a global record price of HK$71,280 per square foot last October.
'Any fraud or deception in property sales is totally unacceptable,' the government said in a statement issued late on Thursday.
The government said it was concerned after only four out of 24 previously announced sales were completed, and it would not tolerate any 'forged non-bona fide transactions'.
Regulatory and law enforcement agencies were looking into and following up on the case, the government said, without elaborating.
Henderson Land said it would cooperate with the probe. 'We welcome the action and will provide all necessary information because we believe this will help us clarify to the public,' said Henderson Land spokeswoman Bonnie Ngan.
On Thursday, Henderson Land vice- chairman Peter KK Lee, son of billionaire Lee Shau Kee, told Reuters that he expected no more sale cancellations here in the near term.
The cancellations led some research houses, such as DBS, Goldman Sachs and JPMorgan, to either downgrade the stock or lower their price targets. -- Reuters
Source: Business Times, 19 Jun 2010
Thursday, June 17, 2010
Buyers get cold feet over HK$2.6b luxury condo units
(HONG KONG) Billionaire Lee Shau-kee's Henderson Land Development Co said that the sale of 20 luxury apartments had collapsed, ending HK$2.67 billion (S$478.2 million) in deals that sparked a government inquiry and fuelled efforts to rein in home prices.
Most buyers pulled out of the 39 Conduit Road project in the Mid-Levels district, Henderson said in a filing with the stock exchange on Tuesday, responding to government demands for more information on the sales of 24 units. It said that it had sold four of the units and would record a charge of HK$734 million in its half-year results.
The failure of the sales, including a unit that would have set a world record price of HK$88,000 per square foot, marks a setback for Hong Kong's second-richest man as regulators try to cool a surging property market. Mr Lee had said in March that buyers could have more time to complete the deals.
The cancellations are 'quite a negative surprise', said Raymond Ngai, an analyst at JPMorgan Chase & Co. 'Those record prices they reported earlier, I doubt they'll be able to sell them at those prices again . . . To sell them for around HK$30,000 per square foot is still quite possible. But selling an apartment at HK$70,000 a square foot is just too out of line with the market.'
'We won't be cutting prices,' Mr Lee told reporters on Tuesday. 'Maybe we'll make more money when we sell these apartments again.'
The company added that it was confident in selling the apartments because of the 'prestigious' location, and will be 'sparing' with sales.
Henderson announced the sale cancellations after the stock market closed on Tuesday. The market was closed yesterday for a public holiday.
Responding to an outcry over rising property prices last year, Hong Kong raised downpayments on luxury homes to 40 per cent from 30 per cent and clamped down on marketing techniques.
The HK$439 million apartment that Henderson had said was sold for a record - based on usable space excluding common areas - was listed on the 68th floor when it was actually on the 45th. Floor numbers are often skipped in Hong Kong to avoid those considered unlucky.
In a March 30 release, Henderson included sales of the 24 apartments plus one that was sold in a completed transaction as part of its revenue of HK$15.2 billion for the 18 months ended December 2009.
The total price of the 20 apartments whose sales collapsed came to HK$2.67 billion, Henderson spokeswoman Bonnie Ngan said yesterday.
The government responded to Henderson's filing, saying that 'clear market information' is important to the city. 'The government is determined to create a fairer and a more transparent environment for flat purchasers.'
Home prices have risen 5.7 per cent this year, adding to 2009's 29 per cent advance and raising concerns that the market is overheating. Builders often sell apartments before they are completed, drawing in customers by showing models of the homes.
The government this month tightened rules on new home sales, including the implementation of unfurnished show apartments and asking developers to disclose properties sold to their own executives.
Financial Secretary John Tsang in February announced higher stamp duty on luxury properties and pledged to raise the supply of land as he wants to reduce the risk of 'a property bubble' and keep housing affordable. -- Bloomberg
Source: Business Times, 17 Jun 2010
Most buyers pulled out of the 39 Conduit Road project in the Mid-Levels district, Henderson said in a filing with the stock exchange on Tuesday, responding to government demands for more information on the sales of 24 units. It said that it had sold four of the units and would record a charge of HK$734 million in its half-year results.
The failure of the sales, including a unit that would have set a world record price of HK$88,000 per square foot, marks a setback for Hong Kong's second-richest man as regulators try to cool a surging property market. Mr Lee had said in March that buyers could have more time to complete the deals.
The cancellations are 'quite a negative surprise', said Raymond Ngai, an analyst at JPMorgan Chase & Co. 'Those record prices they reported earlier, I doubt they'll be able to sell them at those prices again . . . To sell them for around HK$30,000 per square foot is still quite possible. But selling an apartment at HK$70,000 a square foot is just too out of line with the market.'
'We won't be cutting prices,' Mr Lee told reporters on Tuesday. 'Maybe we'll make more money when we sell these apartments again.'
The company added that it was confident in selling the apartments because of the 'prestigious' location, and will be 'sparing' with sales.
Henderson announced the sale cancellations after the stock market closed on Tuesday. The market was closed yesterday for a public holiday.
Responding to an outcry over rising property prices last year, Hong Kong raised downpayments on luxury homes to 40 per cent from 30 per cent and clamped down on marketing techniques.
The HK$439 million apartment that Henderson had said was sold for a record - based on usable space excluding common areas - was listed on the 68th floor when it was actually on the 45th. Floor numbers are often skipped in Hong Kong to avoid those considered unlucky.
In a March 30 release, Henderson included sales of the 24 apartments plus one that was sold in a completed transaction as part of its revenue of HK$15.2 billion for the 18 months ended December 2009.
The total price of the 20 apartments whose sales collapsed came to HK$2.67 billion, Henderson spokeswoman Bonnie Ngan said yesterday.
The government responded to Henderson's filing, saying that 'clear market information' is important to the city. 'The government is determined to create a fairer and a more transparent environment for flat purchasers.'
Home prices have risen 5.7 per cent this year, adding to 2009's 29 per cent advance and raising concerns that the market is overheating. Builders often sell apartments before they are completed, drawing in customers by showing models of the homes.
The government this month tightened rules on new home sales, including the implementation of unfurnished show apartments and asking developers to disclose properties sold to their own executives.
Financial Secretary John Tsang in February announced higher stamp duty on luxury properties and pledged to raise the supply of land as he wants to reduce the risk of 'a property bubble' and keep housing affordable. -- Bloomberg
Source: Business Times, 17 Jun 2010
Record $79m sale of HK flat scrapped
HONG KONG: Hong Kong officials said yesterday they will look into the controversial sale of a luxury flat that fell through months after its developer said it had snatched a world-record price.
Property giant Henderson Land Development revealed on Tuesday that the sale of 20 luxury apartments collapsed, ending HK$2.67 billion (S$480 million) in deals that sparked a government inquiry and fuelled efforts to rein in home prices.
The scrapped deals included what was supposed to be the world's most expensive apartment, a 6,158 sq ft duplex that Henderson said last October was sold for US$56.6 million (S$79 million), or a record price of HK$88,000 per sq ft.
Most buyers pulled out of the 39 Conduit Road project in Hong Kong's Mid-Levels district, Henderson said in a filing to the stock exchange yesterday, responding to government demands for more information on the sales of 24 units.
Henderson said it has sold four of the units and will record a charge of HK$734 million in its half-year results.
Critics demanded a probe into the collapse and asked why the cancellations came to light only eight months after the announcement of the sales, which helped hike prices of the city's luxury residential flats and stoked concerns about a property bubble.
A government spokesman said yesterday it would look into the matter 'to consider the next step'.
Billionaire tycoon Lee Shau Kee, chairman of Henderson and Hong Kong's second-richest man, told reporters he was not bothered by the scrapped deals. 'I may be able to sell them for more,' the South China Morning Post quoted him as saying.
The cancellations are 'quite a negative surprise', said Mr Raymond Ngai, a Hong Kong-based analyst at JPMorgan Chase.
'Those record prices they reported earlier, I doubt they will be able to sell them at those prices again,' he said.
Henderson has also been condemned for being unscrupulous and misleading by selectively numbering the floors on the 46-storey building as a ploy to attract Chinese buyers.
The supposed 68th-floor duplex that snatched the world-record price was actually on the 43rd and 44th floors, according to reports. But it was so numbered because '68' sounds like 'continuing fortune' in Chinese and is considered lucky.
AGENCE FRANCE-PRESSE, BLOOMBERG
Source: Straits Times, 17 Jun 2010
Property giant Henderson Land Development revealed on Tuesday that the sale of 20 luxury apartments collapsed, ending HK$2.67 billion (S$480 million) in deals that sparked a government inquiry and fuelled efforts to rein in home prices.
The scrapped deals included what was supposed to be the world's most expensive apartment, a 6,158 sq ft duplex that Henderson said last October was sold for US$56.6 million (S$79 million), or a record price of HK$88,000 per sq ft.
Most buyers pulled out of the 39 Conduit Road project in Hong Kong's Mid-Levels district, Henderson said in a filing to the stock exchange yesterday, responding to government demands for more information on the sales of 24 units.
Henderson said it has sold four of the units and will record a charge of HK$734 million in its half-year results.
Critics demanded a probe into the collapse and asked why the cancellations came to light only eight months after the announcement of the sales, which helped hike prices of the city's luxury residential flats and stoked concerns about a property bubble.
A government spokesman said yesterday it would look into the matter 'to consider the next step'.
Billionaire tycoon Lee Shau Kee, chairman of Henderson and Hong Kong's second-richest man, told reporters he was not bothered by the scrapped deals. 'I may be able to sell them for more,' the South China Morning Post quoted him as saying.
The cancellations are 'quite a negative surprise', said Mr Raymond Ngai, a Hong Kong-based analyst at JPMorgan Chase.
'Those record prices they reported earlier, I doubt they will be able to sell them at those prices again,' he said.
Henderson has also been condemned for being unscrupulous and misleading by selectively numbering the floors on the 46-storey building as a ploy to attract Chinese buyers.
The supposed 68th-floor duplex that snatched the world-record price was actually on the 43rd and 44th floors, according to reports. But it was so numbered because '68' sounds like 'continuing fortune' in Chinese and is considered lucky.
AGENCE FRANCE-PRESSE, BLOOMBERG
Source: Straits Times, 17 Jun 2010
Thursday, June 10, 2010
Land auction draws top bid of HK$10.9b
Demand for homes seen withstanding govt efforts to cool property market
(HONG KONG) The Hong Kong government's HK$10.9 billion (S$1.98 billion) sale of a residential site at a public auction beat estimates and showed that home demand is withstanding efforts to cool the market
Potential home purchasers should consider their ability to pay before taking out mortgages, Financial Secretary John Tsang said yesterday in the government's latest effort to discourage a bubble forming.
'Citizens should consider the affordability before buying houses,' Mr Tsang told reporters.
Sun Hung Kai Properties Ltd, the world's biggest developer by market value, on Tuesday won the one-and-a-half hour bidding for the Ho Man Tin district site that was estimated at HK$8.41 billion, according to the median of seven analysts surveyed by Bloomberg News.
At HK$12,540 per square foot, it is the highest price paid in a government auction in urban Hong Kong since the market peaked in 1997, said Centaline Property Agency Ltd.
Home prices have risen 41 per cent since the end of 2008, prompting the government to tighten downpayment requirements for luxury homes in October to curtail speculation after record low interest rates fuelled the surge. Mr Tsang on May 12 pledged to keep boosting land supply.
'The above-expectations bidding price shows that the developers hold a positive outlook on urban sites for luxury homes, as currently it is obvious the supply for luxury homes is not sufficient,' Wong Leung Sing, an associate director of research at Centaline, one of the city's biggest real estate agencies, said by phone on Tuesday.
The Centa-City Index, a measure of Hong Kong's home prices, last week fell 1.44 per cent, its biggest weekly drop in more than 18 months.
Hong Kong may add as many as 60,000 homes in three to four years, Mr Tsang has said.
The price 'was not cheap but still reasonable', Fiona Wan, a spokeswoman at Sun Hun Kai, said by phone after the auction. The company expects to invest HK$18 billion to develop the site 'into a luxurious residential area'. The estimates ranged from HK$7.15 billion to HK$9.8 billion.
Home prices in Hong Kong rose the most among the world's major markets in the fourth quarter, property adviser Knight Frank LLP said in April. Average prices climbed almost 28 per cent from a year earlier in the city, while in China they advanced 25 per cent, a global index compiled by the London-based broker showed. They rose 3.4 per cent in the UK and fell 3.1 per cent in the US, according to the April 21 survey.
Hong Kong luxury home prices may rise 20 per cent this year as the economy expands and supply remains limited, real estate broker CB Richard Ellis Group Inc said in January. Luxury homes in the city are defined as those costing at least HK$10 million or bigger than 1,000 square feet (93 square metres).
The price per square foot for Ho Man Tin, a record for a site to build apartments in the Kowloon area, highlights demand for luxury homes on the other side of Victoria Harbour from the Central business district. Financial institutions including Morgan Stanley and Credit Suisse Group AG have moved into International Commerce Centre in the West Kowloon district.
'At this price, the unit price would be as high as HK$15,000 to HK$16,000 per square foot,' said Adrian Ngan, an analyst of CCB International Securities Ltd. 'I expect the gap between luxury and mass apartments would widen after this land sale.'
New apartments in the district, which include those at projects such as Cheung Kong (Holdings) Ltd's Celestial Heights and New World Development Co's Wylie Court, are selling for about HK$12,000 to HK$13,000 a square foot, according to Alnwick Chan, executive director at Knight Frank.
The family of billionaire Lee Shau Kee, who controls Henderson Land Development Co, on May 18 paid HK$1.82 billion for a 53,350-square-foot plot of land on the Peak in an auction of non-government land. On a per-square-foot price of HK$68,200, the land was the city's most expensive in an auction, Jones Lang LaSalle Inc said after conducting the sale.
The average price of HK$12,540 psf paid for Ho Man Tin is the highest for an apartment site in a government auction since 1997, when Chinachem Group bought a parcel in Hong Kong Island's Repulse Bay area for HK$16,256 psf. It is the first time the government has sold a site for more than HK$10 billion since March that year, when a group led by Sino Land Co paid HK$11.8 billion for a site in the Siu Sai Wan district in eastern Hong Kong Island.
The Ho Man Tin plot has a total area of 16,151 sq m and building area of 869,000 sq ft. -- Bloomberg
Source: Business Times, 10 Jun 2010
(HONG KONG) The Hong Kong government's HK$10.9 billion (S$1.98 billion) sale of a residential site at a public auction beat estimates and showed that home demand is withstanding efforts to cool the market
Potential home purchasers should consider their ability to pay before taking out mortgages, Financial Secretary John Tsang said yesterday in the government's latest effort to discourage a bubble forming.
'Citizens should consider the affordability before buying houses,' Mr Tsang told reporters.
Sun Hung Kai Properties Ltd, the world's biggest developer by market value, on Tuesday won the one-and-a-half hour bidding for the Ho Man Tin district site that was estimated at HK$8.41 billion, according to the median of seven analysts surveyed by Bloomberg News.
At HK$12,540 per square foot, it is the highest price paid in a government auction in urban Hong Kong since the market peaked in 1997, said Centaline Property Agency Ltd.
Home prices have risen 41 per cent since the end of 2008, prompting the government to tighten downpayment requirements for luxury homes in October to curtail speculation after record low interest rates fuelled the surge. Mr Tsang on May 12 pledged to keep boosting land supply.
'The above-expectations bidding price shows that the developers hold a positive outlook on urban sites for luxury homes, as currently it is obvious the supply for luxury homes is not sufficient,' Wong Leung Sing, an associate director of research at Centaline, one of the city's biggest real estate agencies, said by phone on Tuesday.
The Centa-City Index, a measure of Hong Kong's home prices, last week fell 1.44 per cent, its biggest weekly drop in more than 18 months.
Hong Kong may add as many as 60,000 homes in three to four years, Mr Tsang has said.
The price 'was not cheap but still reasonable', Fiona Wan, a spokeswoman at Sun Hun Kai, said by phone after the auction. The company expects to invest HK$18 billion to develop the site 'into a luxurious residential area'. The estimates ranged from HK$7.15 billion to HK$9.8 billion.
Home prices in Hong Kong rose the most among the world's major markets in the fourth quarter, property adviser Knight Frank LLP said in April. Average prices climbed almost 28 per cent from a year earlier in the city, while in China they advanced 25 per cent, a global index compiled by the London-based broker showed. They rose 3.4 per cent in the UK and fell 3.1 per cent in the US, according to the April 21 survey.
Hong Kong luxury home prices may rise 20 per cent this year as the economy expands and supply remains limited, real estate broker CB Richard Ellis Group Inc said in January. Luxury homes in the city are defined as those costing at least HK$10 million or bigger than 1,000 square feet (93 square metres).
The price per square foot for Ho Man Tin, a record for a site to build apartments in the Kowloon area, highlights demand for luxury homes on the other side of Victoria Harbour from the Central business district. Financial institutions including Morgan Stanley and Credit Suisse Group AG have moved into International Commerce Centre in the West Kowloon district.
'At this price, the unit price would be as high as HK$15,000 to HK$16,000 per square foot,' said Adrian Ngan, an analyst of CCB International Securities Ltd. 'I expect the gap between luxury and mass apartments would widen after this land sale.'
New apartments in the district, which include those at projects such as Cheung Kong (Holdings) Ltd's Celestial Heights and New World Development Co's Wylie Court, are selling for about HK$12,000 to HK$13,000 a square foot, according to Alnwick Chan, executive director at Knight Frank.
The family of billionaire Lee Shau Kee, who controls Henderson Land Development Co, on May 18 paid HK$1.82 billion for a 53,350-square-foot plot of land on the Peak in an auction of non-government land. On a per-square-foot price of HK$68,200, the land was the city's most expensive in an auction, Jones Lang LaSalle Inc said after conducting the sale.
The average price of HK$12,540 psf paid for Ho Man Tin is the highest for an apartment site in a government auction since 1997, when Chinachem Group bought a parcel in Hong Kong Island's Repulse Bay area for HK$16,256 psf. It is the first time the government has sold a site for more than HK$10 billion since March that year, when a group led by Sino Land Co paid HK$11.8 billion for a site in the Siu Sai Wan district in eastern Hong Kong Island.
The Ho Man Tin plot has a total area of 16,151 sq m and building area of 869,000 sq ft. -- Bloomberg
Source: Business Times, 10 Jun 2010
Tuesday, June 8, 2010
HK analysts cut land auction bid estimates
Developers expected to pay about HK$8.4b for site
(HONG KONG) Hong Kong developers may pay HK$8.41 billion (S$1.5 billion) for a residential site at a government auction today, as some analysts cut their estimates after two previous land sales missed forecasts and apartment prices fell in the last two weeks.
Estimates for the site in Ho Man Tin district ranged from HK$7.15 billion to HK$9.8 billion, based on seven analysts surveyed by Bloomberg News. Three of the analysts either cut their estimates over the last two weeks or waited longer than usual before publishing forecasts.
The Centa-City Index, a measure of Hong Kong's home prices, last week fell 1.44 per cent, its biggest weekly drop in more than 18 months, in the wake of the government's May 12 pledge to keep boosting land supply as it tries to cool the property market. Hong Kong may add as many as 60,000 homes in three to four years, Financial Secretary John Tsang said yesterday.
'We expect developers to be quite cautious at this auction,' said James Cheung, a director at the surveyor unit of Centaline Properties Ltd, one of the city's largest real estate agencies. 'On the other hand, this is a quality site and after sitting on the sideline at the last two auctions, some of the big players may be ready to move in again.'
Home prices in the city have risen 41 per cent since the end of 2008, spurring concern that housing is out of reach of ordinary residents. The Hang Seng Property Index, tracking six of Hong Kong's biggest developers, fell 2.1 per cent today to extend this year's decline to 14 per cent, underperforming the 11 per cent drop in the Hang Seng Index.
Midland Holdings Ltd, Hong Kong's biggest publicly traded real estate agency, last week cut its estimate for tomorrow's auction by about 10 per cent to HK$9.8 billion, according to Alvin Lam, an executive director at the company's surveyor arm. The previous forecast was done in early April, he said.
The site on Kowloon peninsula will be the third piece of land auctioned by the government this fiscal year. It has a total area of 16,151 square metres (174,000 square feet) and building areas of 869,000 sq ft.
The developer who buys the site will likely build between seven and 14 blocks of apartments with 25 to 31 stories each, according to Alnwick Chan, executive director at property consultant Knight Frank LLP. The project will probably sell for about HK$15,000 per sq ft when it is completed, he said.
The first government auction of this fiscal year, conducted on May 11, fetched HK$3.42 billion for a site on Lantau Island, a third less than the median HK$4.75 billion estimate of three surveyors compiled by Bloomberg. Nan Fung Development Ltd, a privately held developer controlled by billionaire Chen Din Hwa, outbid only two other builders in the auction that analyst Adrian Ngan of CCB International Securities Ltd described as 'a slam' on the property market.
Two weeks later, a subsidiary of Henderson Land Development Co, controlled by billionaire Lee Shau-kee, bought a site in the city's northern Fanling area for HK$1.33 billion, shy of the HK$1.37 billion median estimate of four surveyors.
On May 28, MTR Corp, the government-owned subway operator, said it was withdrawing the tender for a residential and commercial project atop one of its subway stations, without giving an explanation.
'Mega-builders' such as Sun Hung Kai Properties Ltd and Cheung Kong Holdings Ltd may have more interest in the Ho Man Tin site because of the high price it is expected to fetch, said Centaline's Mr Cheung.
New apartments in the district, which include those at projects such as Cheung Kong's Celestial Heights and New World Development Co's Wylie Court, are currently selling for about HK$12,000 to HK$13,000 psf, according to Knight Frank's Mr Chan.
The Lands Department is one of Hong Kong's largest suppliers of unoccupied land for building. Developers trigger auctions from a list of available sites by promising to pay a minimum amount.
Today's auction will be followed by another one on July 28 for a site on Mount Nicholson in the Peak district, according to the Lands Department website.
Henderson's Mr Lee and his family on May 18 paid HK$1.82 billion for a 53,350 sq ft plot of land on the Peak in an auction of non-government land. On a psf price of HK$68,200, the land was the city's most expensive in an auction, auctioneer Jones Lang LaSalle Inc said. -- Bloomberg
Source: Business Times, 8 Jun 2010
(HONG KONG) Hong Kong developers may pay HK$8.41 billion (S$1.5 billion) for a residential site at a government auction today, as some analysts cut their estimates after two previous land sales missed forecasts and apartment prices fell in the last two weeks.
Estimates for the site in Ho Man Tin district ranged from HK$7.15 billion to HK$9.8 billion, based on seven analysts surveyed by Bloomberg News. Three of the analysts either cut their estimates over the last two weeks or waited longer than usual before publishing forecasts.
The Centa-City Index, a measure of Hong Kong's home prices, last week fell 1.44 per cent, its biggest weekly drop in more than 18 months, in the wake of the government's May 12 pledge to keep boosting land supply as it tries to cool the property market. Hong Kong may add as many as 60,000 homes in three to four years, Financial Secretary John Tsang said yesterday.
'We expect developers to be quite cautious at this auction,' said James Cheung, a director at the surveyor unit of Centaline Properties Ltd, one of the city's largest real estate agencies. 'On the other hand, this is a quality site and after sitting on the sideline at the last two auctions, some of the big players may be ready to move in again.'
Home prices in the city have risen 41 per cent since the end of 2008, spurring concern that housing is out of reach of ordinary residents. The Hang Seng Property Index, tracking six of Hong Kong's biggest developers, fell 2.1 per cent today to extend this year's decline to 14 per cent, underperforming the 11 per cent drop in the Hang Seng Index.
Midland Holdings Ltd, Hong Kong's biggest publicly traded real estate agency, last week cut its estimate for tomorrow's auction by about 10 per cent to HK$9.8 billion, according to Alvin Lam, an executive director at the company's surveyor arm. The previous forecast was done in early April, he said.
The site on Kowloon peninsula will be the third piece of land auctioned by the government this fiscal year. It has a total area of 16,151 square metres (174,000 square feet) and building areas of 869,000 sq ft.
The developer who buys the site will likely build between seven and 14 blocks of apartments with 25 to 31 stories each, according to Alnwick Chan, executive director at property consultant Knight Frank LLP. The project will probably sell for about HK$15,000 per sq ft when it is completed, he said.
The first government auction of this fiscal year, conducted on May 11, fetched HK$3.42 billion for a site on Lantau Island, a third less than the median HK$4.75 billion estimate of three surveyors compiled by Bloomberg. Nan Fung Development Ltd, a privately held developer controlled by billionaire Chen Din Hwa, outbid only two other builders in the auction that analyst Adrian Ngan of CCB International Securities Ltd described as 'a slam' on the property market.
Two weeks later, a subsidiary of Henderson Land Development Co, controlled by billionaire Lee Shau-kee, bought a site in the city's northern Fanling area for HK$1.33 billion, shy of the HK$1.37 billion median estimate of four surveyors.
On May 28, MTR Corp, the government-owned subway operator, said it was withdrawing the tender for a residential and commercial project atop one of its subway stations, without giving an explanation.
'Mega-builders' such as Sun Hung Kai Properties Ltd and Cheung Kong Holdings Ltd may have more interest in the Ho Man Tin site because of the high price it is expected to fetch, said Centaline's Mr Cheung.
New apartments in the district, which include those at projects such as Cheung Kong's Celestial Heights and New World Development Co's Wylie Court, are currently selling for about HK$12,000 to HK$13,000 psf, according to Knight Frank's Mr Chan.
The Lands Department is one of Hong Kong's largest suppliers of unoccupied land for building. Developers trigger auctions from a list of available sites by promising to pay a minimum amount.
Today's auction will be followed by another one on July 28 for a site on Mount Nicholson in the Peak district, according to the Lands Department website.
Henderson's Mr Lee and his family on May 18 paid HK$1.82 billion for a 53,350 sq ft plot of land on the Peak in an auction of non-government land. On a psf price of HK$68,200, the land was the city's most expensive in an auction, auctioneer Jones Lang LaSalle Inc said. -- Bloomberg
Source: Business Times, 8 Jun 2010
Tuesday, May 25, 2010
State auction site goes for HK$1.33b
It is second sale to fetch less than what surveyors had forecast
(HONG KONG) A building site in Hong Kong sold for HK$1.33 billion (S$240 million) yesterday, the second government auction this year that failed to meet surveyor forecasts as the city releases more land to ease concern about a property bubble.
The government auctioned an 8,900 square metre site in the Fanling area of the New Territories in northern Hong Kong that was forecast to fetch HK$1.32 billion to HK$1.45 billion, with HK$1.37 billion the median price, according to estimates of four surveyors compiled by Bloomberg.
Hong Kong's home prices have jumped 41 per cent since the end of 2008, spurring concerns that affordable housing is out of reach of ordinary residents. Hong Kong's government on May 12 pledged to keep boosting land supply as it tries to cool the property market, a day after its first auction of the fiscal year fetched almost a third less than surveyors' estimates.
'There could be more government policies coming as it shows determination to bring down prices,' said Alnwick Chan, executive director at property consultant Knight Frank LLP before the auction.
Developers must build a minimum gross floor area of 34,290 square metres on the Fanling site.
Fanling doesn't offer sea views and is near an industrial estate, unlike the previous auction in Tung Chung, said James Cheung, director of Centaline Surveyors, a unit of one of the city's biggest property agencies. He estimated that Fanling would sell for HK$1.32 billion, 16 per cent lower than his original estimate of HK$1.57 billion prior to the Tung Chung sale.
The first auction of this fiscal year, conducted on May 11, fetched HK$3.42 billion, a third less than the median HK$4.75 billion estimate of three surveyors.
Nan Fung Development Ltd, a privately held developer controlled by billionaire Chen Din Hwa, outbid only two other builders in the auction that analyst Adrian Ngan of CCB International Securities Ltd described as 'a slam' on the property market.
Developers can build a maximum of 131,000 square metres of private residences on the site in Tung Chung on Lantau Island.
Developers are more likely to build homes with two or three bedrooms on the site, said Alvin Lam, executive director of Midland Surveyors Ltd. Prices of homes in the area are selling at an average of HK$3,500 a square foot, he said.
Yesterday's auction was triggered after the government received a minimum guaranteed bid of HK$1.05 billion, it said on April 16. The Hong Kong government sells land through auctions only after developers promise to pay a minimum amount, part of an undisclosed reserve price.
Hong Kong is auctioning a site in Ho Man Tin in Kowloon on June 8 and Mount Nicholson on the Peak on July 28. MTR Corp, the government-owned subway operator, will finish taking bids for a separate site in Kowloon today.
Martin Lee, the youngest son of real estate tycoon Lee Shau-kee, paid a record price for land on the Peak, the city's most expensive residential area, on May 18.
Mr Lee, vice-chairman of Henderson Land Development Co that is controlled by his father, paid HK$1.82 billion for a 53,350 square foot plot of land on the Peak in an auction of non-government land. On a per-square-foot price of HK$68,200, the land was the city's most expensive in an auction, auctioneer Jones Lang LaSalle Inc said. -- Bloomberg
Source: Business Times, 25 May 2010
(HONG KONG) A building site in Hong Kong sold for HK$1.33 billion (S$240 million) yesterday, the second government auction this year that failed to meet surveyor forecasts as the city releases more land to ease concern about a property bubble.
The government auctioned an 8,900 square metre site in the Fanling area of the New Territories in northern Hong Kong that was forecast to fetch HK$1.32 billion to HK$1.45 billion, with HK$1.37 billion the median price, according to estimates of four surveyors compiled by Bloomberg.
Hong Kong's home prices have jumped 41 per cent since the end of 2008, spurring concerns that affordable housing is out of reach of ordinary residents. Hong Kong's government on May 12 pledged to keep boosting land supply as it tries to cool the property market, a day after its first auction of the fiscal year fetched almost a third less than surveyors' estimates.
'There could be more government policies coming as it shows determination to bring down prices,' said Alnwick Chan, executive director at property consultant Knight Frank LLP before the auction.
Developers must build a minimum gross floor area of 34,290 square metres on the Fanling site.
Fanling doesn't offer sea views and is near an industrial estate, unlike the previous auction in Tung Chung, said James Cheung, director of Centaline Surveyors, a unit of one of the city's biggest property agencies. He estimated that Fanling would sell for HK$1.32 billion, 16 per cent lower than his original estimate of HK$1.57 billion prior to the Tung Chung sale.
The first auction of this fiscal year, conducted on May 11, fetched HK$3.42 billion, a third less than the median HK$4.75 billion estimate of three surveyors.
Nan Fung Development Ltd, a privately held developer controlled by billionaire Chen Din Hwa, outbid only two other builders in the auction that analyst Adrian Ngan of CCB International Securities Ltd described as 'a slam' on the property market.
Developers can build a maximum of 131,000 square metres of private residences on the site in Tung Chung on Lantau Island.
Developers are more likely to build homes with two or three bedrooms on the site, said Alvin Lam, executive director of Midland Surveyors Ltd. Prices of homes in the area are selling at an average of HK$3,500 a square foot, he said.
Yesterday's auction was triggered after the government received a minimum guaranteed bid of HK$1.05 billion, it said on April 16. The Hong Kong government sells land through auctions only after developers promise to pay a minimum amount, part of an undisclosed reserve price.
Hong Kong is auctioning a site in Ho Man Tin in Kowloon on June 8 and Mount Nicholson on the Peak on July 28. MTR Corp, the government-owned subway operator, will finish taking bids for a separate site in Kowloon today.
Martin Lee, the youngest son of real estate tycoon Lee Shau-kee, paid a record price for land on the Peak, the city's most expensive residential area, on May 18.
Mr Lee, vice-chairman of Henderson Land Development Co that is controlled by his father, paid HK$1.82 billion for a 53,350 square foot plot of land on the Peak in an auction of non-government land. On a per-square-foot price of HK$68,200, the land was the city's most expensive in an auction, auctioneer Jones Lang LaSalle Inc said. -- Bloomberg
Source: Business Times, 25 May 2010
Sunday, May 16, 2010
Expats leaving HK for 'cleaner' pastures
Worsening air pollution driving finance professionals to S'pore
When financial analyst Terry Dunne looks at Hong Kong's smoggy skies these days, he thinks of his toddler son - and of packing up and moving his family to another city.
Worsening air pollution is cited as the main push factor for hundreds of expatriate bankers, stock analysts and other finance professionals leaving Hong Kong each year for 'cleaner' and not just greener pastures elsewhere.
Experts find this outflow of expatriate expertise a worrying trend that could threaten Hong Kong's status as a regional financial centre in the long term.
Noting that many of the expatriates move on to new jobs in Singapore, the experts express concern that Hong Kong's loss would be Singapore's gain.
Mr Ben Tyrell, whose company Relocasia handles about 2,000 expatriate moves annually, said the number of expatriates who left Hong Kong citing its air pollution has risen sharply in the past 10 years - from 20 per cent a decade ago to 60 per cent, or 1,200.
'Pollution is among the top three reasons,' said Mr Tyrell, adding that better career prospects and personal reasons are the other two.
He notes that in pollution-triggered cases, the deciding factor for expatriates is often the health of their children.
'Singapore is attracting senior expatriate families because it is cleaner and provides a better living environment,' said Mr Tyrell.
Last month alone, his company packed off 50 expatriates who cited air pollution as a factor.
Entire financial firms are also pulling out of Hong Kong, said Mr Tyrell.
And such anecdotes, said political analyst Michael DeGolyer, are just 'the tip of the iceberg'.
About one in five people in the city of seven million is considering leaving because of its air pollution, according to his 2008 report on air pollution, Hong Kong's Silent Epidemic, and this group consists mostly of high-income earners, professionals and managers.
'Worsening pollution tends to drive out those with young children, those with higher education and more marketable skills, and the older but more experienced employees,' said Professor DeGolyer, director of the Hong Kong Transition Project at Baptist University.
Last month, the city's leading authority on air quality, Mr Anthony Hedley, was forced to leave Hong Kong for health reasons.
The 69-year-old Briton, who created the Hedley Environmental Index, had campaigned for radical measures to fight the city's pollution for two decades.
Prof DeGolyer said he believed that Hong Kong's pollution woes, if left unchecked, could undermine its leading position as a financial hub to China as well as the region.
An Environment Bureau spokesman did not comment, but the Hong Kong government said it has adopted a multi-pronged strategy to cut emissions. It attaches great importance to improving air quality, 'both for our citizens' health and for our city's competitiveness', said a spokesman.
Dr Raymond So Wai Man of the finance department at the Chinese University of Hong Kong notes that for those who want to leave Hong Kong but wish to continue working in the region, Singapore will be an obvious choice.
'Hong Kong will be affected especially if financial talent goes to Singapore, another financial hub,' he said, adding that major international fund managers are increasingly using Singapore as their base.
'Then Singapore will become the 'brain', the part that brings in revenue, and Hong Kong will be just the 'limbs', handling front-line deals.'
Hong Kong also faces increasing competition from Shanghai, which is shaping up as China's financial centre.
'When that time comes, the 'brain' will be in Singapore, and the operational front lines and financial deals will go to Shanghai. Hong Kong will be left with nothing,' said Dr So.
But Mr Richard Vuylsteke, the president of the American Chamber of Commerce in Hong Kong, is more optimistic. He said: 'People leave, but they can be replaced. I haven't seen any significant downsizing in the financial sector. It is not an issue.'
Dr So pointed out, however, that many of the replacements may not have as much experience.
Financial headhunter Ryan Marshall noted that people who come to work in Hong Kong these days are younger - mostly in their 20s or 30s - and are unlikely to stay beyond two years.
For Mr Dunne, a 40-year-old Canadian from Vancouver, what is most important is his young son's health and well-being.
He remembers the day dust from a sandstorm originating in northern China caused the city's air pollution to hit a record high.
It was March 22, the same day his 21-month-old son Augustus ran a high fever and developed breathing difficulties.
'He got really sick. He had a high fever of 41 deg C, his chest was congested and he had difficulty breathing,' he recalled.
Augustus got better, but continues to be susceptible to coughs and colds. He had been hospitalised twice in the past six months.
Mr Dunne, who also has a five-year-old daughter, says he has been thinking about returning to Canada or moving his family to another city like Singapore.
'I have friends in Singapore. The air is clean and the sky is so clear, you can see much farther,' he said.
'Here in Central, you can't even see what's across the harbour.'
Source: Straits Times, 16 May 2010
When financial analyst Terry Dunne looks at Hong Kong's smoggy skies these days, he thinks of his toddler son - and of packing up and moving his family to another city.
Worsening air pollution is cited as the main push factor for hundreds of expatriate bankers, stock analysts and other finance professionals leaving Hong Kong each year for 'cleaner' and not just greener pastures elsewhere.
Experts find this outflow of expatriate expertise a worrying trend that could threaten Hong Kong's status as a regional financial centre in the long term.
Noting that many of the expatriates move on to new jobs in Singapore, the experts express concern that Hong Kong's loss would be Singapore's gain.
Mr Ben Tyrell, whose company Relocasia handles about 2,000 expatriate moves annually, said the number of expatriates who left Hong Kong citing its air pollution has risen sharply in the past 10 years - from 20 per cent a decade ago to 60 per cent, or 1,200.
'Pollution is among the top three reasons,' said Mr Tyrell, adding that better career prospects and personal reasons are the other two.
He notes that in pollution-triggered cases, the deciding factor for expatriates is often the health of their children.
'Singapore is attracting senior expatriate families because it is cleaner and provides a better living environment,' said Mr Tyrell.
Last month alone, his company packed off 50 expatriates who cited air pollution as a factor.
Entire financial firms are also pulling out of Hong Kong, said Mr Tyrell.
And such anecdotes, said political analyst Michael DeGolyer, are just 'the tip of the iceberg'.
About one in five people in the city of seven million is considering leaving because of its air pollution, according to his 2008 report on air pollution, Hong Kong's Silent Epidemic, and this group consists mostly of high-income earners, professionals and managers.
'Worsening pollution tends to drive out those with young children, those with higher education and more marketable skills, and the older but more experienced employees,' said Professor DeGolyer, director of the Hong Kong Transition Project at Baptist University.
Last month, the city's leading authority on air quality, Mr Anthony Hedley, was forced to leave Hong Kong for health reasons.
The 69-year-old Briton, who created the Hedley Environmental Index, had campaigned for radical measures to fight the city's pollution for two decades.
Prof DeGolyer said he believed that Hong Kong's pollution woes, if left unchecked, could undermine its leading position as a financial hub to China as well as the region.
An Environment Bureau spokesman did not comment, but the Hong Kong government said it has adopted a multi-pronged strategy to cut emissions. It attaches great importance to improving air quality, 'both for our citizens' health and for our city's competitiveness', said a spokesman.
Dr Raymond So Wai Man of the finance department at the Chinese University of Hong Kong notes that for those who want to leave Hong Kong but wish to continue working in the region, Singapore will be an obvious choice.
'Hong Kong will be affected especially if financial talent goes to Singapore, another financial hub,' he said, adding that major international fund managers are increasingly using Singapore as their base.
'Then Singapore will become the 'brain', the part that brings in revenue, and Hong Kong will be just the 'limbs', handling front-line deals.'
Hong Kong also faces increasing competition from Shanghai, which is shaping up as China's financial centre.
'When that time comes, the 'brain' will be in Singapore, and the operational front lines and financial deals will go to Shanghai. Hong Kong will be left with nothing,' said Dr So.
But Mr Richard Vuylsteke, the president of the American Chamber of Commerce in Hong Kong, is more optimistic. He said: 'People leave, but they can be replaced. I haven't seen any significant downsizing in the financial sector. It is not an issue.'
Dr So pointed out, however, that many of the replacements may not have as much experience.
Financial headhunter Ryan Marshall noted that people who come to work in Hong Kong these days are younger - mostly in their 20s or 30s - and are unlikely to stay beyond two years.
For Mr Dunne, a 40-year-old Canadian from Vancouver, what is most important is his young son's health and well-being.
He remembers the day dust from a sandstorm originating in northern China caused the city's air pollution to hit a record high.
It was March 22, the same day his 21-month-old son Augustus ran a high fever and developed breathing difficulties.
'He got really sick. He had a high fever of 41 deg C, his chest was congested and he had difficulty breathing,' he recalled.
Augustus got better, but continues to be susceptible to coughs and colds. He had been hospitalised twice in the past six months.
Mr Dunne, who also has a five-year-old daughter, says he has been thinking about returning to Canada or moving his family to another city like Singapore.
'I have friends in Singapore. The air is clean and the sky is so clear, you can see much farther,' he said.
'Here in Central, you can't even see what's across the harbour.'
Source: Straits Times, 16 May 2010
Thursday, May 13, 2010
HK says measures to cool property sector working
(HONG KONG) Hong Kong said yesterday that its efforts to cool the property market in the crowded former British colony showed signs of working after its latest land sale met a lacklustre response.
A site for non-industrial use near the city's international airport went under the hammer for HK$3.42 billion (S$607 million) on Tuesday, far below a HK$4.63 billion average forecast of analysts polled by Dow Jones Newswires.
The 282,017-square foot plot was sold to unlisted developer Nan Fung Group, one of only two bidders, after the auctioneer threatened to cancel the sale if the government's reserve price was not met.
In recent months, government officials have taken a high-profile stance in reining in soaring residential property prices after they jumped nearly 30 per cent last year.
Financial Secretary John Tsang said that the lukewarm result was a sign that the market was starting to stabilise, after luxury flat prices recently climbed to the boom levels of 1997, driven by deep-pocketed mainland buyers.
'The result of the auction has reflected the market situation. We have always hoped the property market will develop in a stable manner,' he told reporters.
He pledged to continue to increase land supply in the coming months, repeating a promise that he made in his February budget speech aimed at preventing a bubble.
'We will have land sales in June and July. The sales will keep coming.'
Analysts said that developers stayed on the sidelines at Tuesday's auction due to uncertainty about the full impact of the government's cooling measures.
'The impact can be especially strong on the small and medium residential flats, in light of the calls for the government to resume the construction of' subsidised housing, Charles Chan, managing director and valuation specialist at Savills in Hong Kong, told AFP.
Macquarie said that the poor response would weaken sentiment in the residential market in the near term, but predicted more active bidding at future sales because of a general land shortage and the greater attractiveness of the sites in question.
'Developers will likely remain active to replenish land but they might be more picky in light of more choices available,' it said in a report.
Apart from increasing land supply, the government has also raised the stamp duty for luxury flats to try to curb speculation and pledged to avoid excessive mortgage lending. -- AFP
Source: Business Times, 13 May 2010
A site for non-industrial use near the city's international airport went under the hammer for HK$3.42 billion (S$607 million) on Tuesday, far below a HK$4.63 billion average forecast of analysts polled by Dow Jones Newswires.
The 282,017-square foot plot was sold to unlisted developer Nan Fung Group, one of only two bidders, after the auctioneer threatened to cancel the sale if the government's reserve price was not met.
In recent months, government officials have taken a high-profile stance in reining in soaring residential property prices after they jumped nearly 30 per cent last year.
Financial Secretary John Tsang said that the lukewarm result was a sign that the market was starting to stabilise, after luxury flat prices recently climbed to the boom levels of 1997, driven by deep-pocketed mainland buyers.
'The result of the auction has reflected the market situation. We have always hoped the property market will develop in a stable manner,' he told reporters.
He pledged to continue to increase land supply in the coming months, repeating a promise that he made in his February budget speech aimed at preventing a bubble.
'We will have land sales in June and July. The sales will keep coming.'
Analysts said that developers stayed on the sidelines at Tuesday's auction due to uncertainty about the full impact of the government's cooling measures.
'The impact can be especially strong on the small and medium residential flats, in light of the calls for the government to resume the construction of' subsidised housing, Charles Chan, managing director and valuation specialist at Savills in Hong Kong, told AFP.
Macquarie said that the poor response would weaken sentiment in the residential market in the near term, but predicted more active bidding at future sales because of a general land shortage and the greater attractiveness of the sites in question.
'Developers will likely remain active to replenish land but they might be more picky in light of more choices available,' it said in a report.
Apart from increasing land supply, the government has also raised the stamp duty for luxury flats to try to curb speculation and pledged to avoid excessive mortgage lending. -- AFP
Source: Business Times, 13 May 2010
Tuesday, May 4, 2010
Swire Pacific to raise up to HK$20.8b in IPO
HK Island's biggest commercial landlord to sell 13.8% stake
(HONG KONG) Swire Properties Ltd, landlord to Time Warner Inc and Societe Generale in Hong Kong, seeks to raise as much as HK$20.8 billion (S$3.7 billion) in what would be the city's largest initial public offering since 2007.
Swire Properties aims to sell 910 million new shares, equivalent to a 13.79 per cent stake, at between HK$20.75 and HK$22.90 each, Martin Cubbon, executive director of parent Swire Pacific Ltd, said in London during a video conference with reporters in Hong Kong on yesterday.
The stock is to be priced May 7 and start trading May 14, he said.
Swire Properties, the biggest commercial landlord in eastern Hong Kong island, is raising money as office rents in the city may increase this year as companies start to rehire amid a more optimistic economic outlook.
Prime office rents on Hong Kong Island, which fell 19.6 per cent last year, may rise 4 per cent in 2010, according to real estate broker CB Richard Ellis Group Inc.
'Swire Properties is capital constrained,' said Mr Cubbon, who is also Swire Properties chief executive officer.
'We have relatively modest gearing and absolute borrowings but we are constrained by our interest coverage ratios, which the rating agencies look at.'
Swire Pacific will have a controlling stake of 86.21 per cent after the IPO, according to the company prospectus.
Of the HK$19.3 billion the company would raise assuming a mid-point price of HK$21.83, approximately 70 per cent will be used to repay debt and 11 per cent to fund ongoing projects in Hong Kong and China.
The remaining 19 per cent would be kept for future property developments, according to the company prospectus.
'We will seek to minimise the cost of having a lot of cash up front without being able to deploy all that cash immediately,' said Mr Cubbon.
Charles Bremridge, finance director of Swire Properties, said that after the IPO the company's debt-to-equity ratio would be reduced from 30 per cent to 13 per cent.
Swire Properties owns the Pacific Place shopping and office complex in Admiralty, where Deloitte & Touche LLP and Societe Generale are tenants.
In eastern Hong Kong Island, Swire's buildings include the 5.99 million square foot TaiKoo Place and house companies such as Time Warner and JPMorgan Chase & Co.
The company enjoyed average retail occupancy rates of 98 per cent and residential occupancy rates of 92 per cent in the past three years.
The total valuation of properties was HK$183.8 million on March 31, Mr Cubbon said.
At the top end of the range, Swire Properties' IPO would be the largest in Hong Kong since the November 2007 share sale of China Railway Group Ltd's HK$22.1 billion Hong Kong first-time share sale, according to data compiled by Bloomberg.
Created as a trading company in London in 1816, Swire Pacific owns 42 per cent of Cathay Pacific Airways Ltd, Hong Kong's biggest carrier, and also bottles Coca-Cola in China and supplies offshore oil rigs.
Swire Properties' will be the second real estate IPO in Hong Kong this year since investors turned cool toward Chinese developers after 30 of them raised US$15.7 billion in first-time share sales in the city since 1999, according to Bloomberg data.
China SCE Property Holdings Ltd raised HK$1.56 billion in a Hong Kong IPO in February.
Property IPOs in Hong Kong fetched a combined US$8.6 billion in 2007. Sunac China Holdings Ltd and Excellence Real Estate Group, two Chinese developers, last year delayed Hong Kong IPOs that sought as much as HK$10 billion between them, according to Bloomberg data. -- Bloomberg
Source: Business Times, 4 May 2010
(HONG KONG) Swire Properties Ltd, landlord to Time Warner Inc and Societe Generale in Hong Kong, seeks to raise as much as HK$20.8 billion (S$3.7 billion) in what would be the city's largest initial public offering since 2007.
Swire Properties aims to sell 910 million new shares, equivalent to a 13.79 per cent stake, at between HK$20.75 and HK$22.90 each, Martin Cubbon, executive director of parent Swire Pacific Ltd, said in London during a video conference with reporters in Hong Kong on yesterday.
The stock is to be priced May 7 and start trading May 14, he said.
Swire Properties, the biggest commercial landlord in eastern Hong Kong island, is raising money as office rents in the city may increase this year as companies start to rehire amid a more optimistic economic outlook.
Prime office rents on Hong Kong Island, which fell 19.6 per cent last year, may rise 4 per cent in 2010, according to real estate broker CB Richard Ellis Group Inc.
'Swire Properties is capital constrained,' said Mr Cubbon, who is also Swire Properties chief executive officer.
'We have relatively modest gearing and absolute borrowings but we are constrained by our interest coverage ratios, which the rating agencies look at.'
Swire Pacific will have a controlling stake of 86.21 per cent after the IPO, according to the company prospectus.
Of the HK$19.3 billion the company would raise assuming a mid-point price of HK$21.83, approximately 70 per cent will be used to repay debt and 11 per cent to fund ongoing projects in Hong Kong and China.
The remaining 19 per cent would be kept for future property developments, according to the company prospectus.
'We will seek to minimise the cost of having a lot of cash up front without being able to deploy all that cash immediately,' said Mr Cubbon.
Charles Bremridge, finance director of Swire Properties, said that after the IPO the company's debt-to-equity ratio would be reduced from 30 per cent to 13 per cent.
Swire Properties owns the Pacific Place shopping and office complex in Admiralty, where Deloitte & Touche LLP and Societe Generale are tenants.
In eastern Hong Kong Island, Swire's buildings include the 5.99 million square foot TaiKoo Place and house companies such as Time Warner and JPMorgan Chase & Co.
The company enjoyed average retail occupancy rates of 98 per cent and residential occupancy rates of 92 per cent in the past three years.
The total valuation of properties was HK$183.8 million on March 31, Mr Cubbon said.
At the top end of the range, Swire Properties' IPO would be the largest in Hong Kong since the November 2007 share sale of China Railway Group Ltd's HK$22.1 billion Hong Kong first-time share sale, according to data compiled by Bloomberg.
Created as a trading company in London in 1816, Swire Pacific owns 42 per cent of Cathay Pacific Airways Ltd, Hong Kong's biggest carrier, and also bottles Coca-Cola in China and supplies offshore oil rigs.
Swire Properties' will be the second real estate IPO in Hong Kong this year since investors turned cool toward Chinese developers after 30 of them raised US$15.7 billion in first-time share sales in the city since 1999, according to Bloomberg data.
China SCE Property Holdings Ltd raised HK$1.56 billion in a Hong Kong IPO in February.
Property IPOs in Hong Kong fetched a combined US$8.6 billion in 2007. Sunac China Holdings Ltd and Excellence Real Estate Group, two Chinese developers, last year delayed Hong Kong IPOs that sought as much as HK$10 billion between them, according to Bloomberg data. -- Bloomberg
Source: Business Times, 4 May 2010
Thursday, April 29, 2010
Sands eyes US$12 billion from sale of Macau assets
CEO raises Marina Bay Sands forecast, investment to be recouped in 5 years
Las Vegas Sands Corp chairman Sheldon Adelson said that the planned sale of the casino operator's Macau malls and apartments may raise as much as US$12 billion and recoup their construction costs.
'It will be like US$12 billion if we add up all the apartments and all the retail in Macau,' including those in buildings still under construction, Mr Adelson, the founder and chief executive officer of Las Vegas Sands, said in an interview in Singapore on Tuesday. The company may start selling the Macau assets within 21/2 years, he said.
Sands, which Adelson describes as 'an Asian company with a presence in Las Vegas and the US', gets 73 per cent of its revenue from Macau, the world's largest gambling market. He was in Singapore on Tuesday to open the first phase of Marina Bay Sands, and raised his earnings forecast for the resort, saying that the US$5.5 billion invested in it will be recouped in five years.
Sands' casino resort on Tuesday opened 963 of its 2,560 hotel rooms, the casino, the meeting and convention facilities, parts of its shopping mall and some restaurants. A grand opening party will be held on June 23 when the second phase is unveiled, including a sky park, additional shops and more restaurants.
Asia will contribute 85 per cent of revenue once the Singapore casino 'ramps up', said Mr Adelson. Last year's sales totalled US$4.56 billion, with 27 per cent coming from Las Vegas, where the company is based.
Macau assets that Sands may sell include the Four Seasons apartments and shopping areas in the Venetian Macau casino resort and in the Four Seasons hotel, Mr Adelson said. The plan also includes selling condominiums at the St Regis, where construction is resuming.
'That is our fundamental business model - we get our money back from the sale of non-core business assets,' he said.
Still, Jonathan Galaviz, an independent strategist who follows travel and leisure in Asia, said that apartments and malls in Macau may be a tough sell to investors, given that the city isn't a proven place for housing investment, and that a huge asset bubble may be developing in Asian real estate.
'Second-home buyers in Asia tend to have an affinity for beach and costal destinations, so Macau's proposition will need to be unique in order to compete,' Mr Galaviz said in an e-mail. As for malls, 'the average length of stay for Macau's average tourist - around one night - doesn't yet lend itself to a strong and dynamic retail opportunity'.
Sands fell US$1.51, or 5.8 per cent, to close at US$24.69 on the New York Stock Exchange composite trading on Tuesday. The stock has gained 65 per cent this year.
Mr Adelson, who is Sands' controlling shareholder, said in December that selling the retail areas at the Four Seasons and the Venetian would raise enough money to pay Sands' debt. The company has US$12.2 billion of bonds and loans due from next year to 2015, according to data compiled by Bloomberg.
The billionaire, who previously said that the Singapore project would add more than US$1 billion in annual earnings before interest, tax, depreciation and amortisation, didn't provide a new figure apart from saying that he was raising his forecast. The return period compares with four years for the Macau project, which cost about half as much to build, Mr Adelson said.
The Marina Bay Sands in Singapore will be a 'grand slam home run', Mr Adelson said. 'Asian people just love to gamble.'
Singapore aims to lure 17 million visitors and triple annual tourism revenue to S$30 billion (US$22 billion) by 2015, helped by two casino resorts, Marina Bay Sands and Genting Bhd's Resorts World Sentosa.
The Marina Bay Sands casino, which makes up about 3 per cent of the 15,000 sq m resort, has about 600 table games and more than 1,500 slot machines.
Asia has room for five to 10 cities like Las Vegas, Mr Adelson said. The most likely countries to approve casinos in the region are Japan and Taiwan, he said. -- Bloomberg
Source: Business Times, 29 Apr 2010
Las Vegas Sands Corp chairman Sheldon Adelson said that the planned sale of the casino operator's Macau malls and apartments may raise as much as US$12 billion and recoup their construction costs.
'It will be like US$12 billion if we add up all the apartments and all the retail in Macau,' including those in buildings still under construction, Mr Adelson, the founder and chief executive officer of Las Vegas Sands, said in an interview in Singapore on Tuesday. The company may start selling the Macau assets within 21/2 years, he said.
Sands, which Adelson describes as 'an Asian company with a presence in Las Vegas and the US', gets 73 per cent of its revenue from Macau, the world's largest gambling market. He was in Singapore on Tuesday to open the first phase of Marina Bay Sands, and raised his earnings forecast for the resort, saying that the US$5.5 billion invested in it will be recouped in five years.
Sands' casino resort on Tuesday opened 963 of its 2,560 hotel rooms, the casino, the meeting and convention facilities, parts of its shopping mall and some restaurants. A grand opening party will be held on June 23 when the second phase is unveiled, including a sky park, additional shops and more restaurants.
Asia will contribute 85 per cent of revenue once the Singapore casino 'ramps up', said Mr Adelson. Last year's sales totalled US$4.56 billion, with 27 per cent coming from Las Vegas, where the company is based.
Macau assets that Sands may sell include the Four Seasons apartments and shopping areas in the Venetian Macau casino resort and in the Four Seasons hotel, Mr Adelson said. The plan also includes selling condominiums at the St Regis, where construction is resuming.
'That is our fundamental business model - we get our money back from the sale of non-core business assets,' he said.
Still, Jonathan Galaviz, an independent strategist who follows travel and leisure in Asia, said that apartments and malls in Macau may be a tough sell to investors, given that the city isn't a proven place for housing investment, and that a huge asset bubble may be developing in Asian real estate.
'Second-home buyers in Asia tend to have an affinity for beach and costal destinations, so Macau's proposition will need to be unique in order to compete,' Mr Galaviz said in an e-mail. As for malls, 'the average length of stay for Macau's average tourist - around one night - doesn't yet lend itself to a strong and dynamic retail opportunity'.
Sands fell US$1.51, or 5.8 per cent, to close at US$24.69 on the New York Stock Exchange composite trading on Tuesday. The stock has gained 65 per cent this year.
Mr Adelson, who is Sands' controlling shareholder, said in December that selling the retail areas at the Four Seasons and the Venetian would raise enough money to pay Sands' debt. The company has US$12.2 billion of bonds and loans due from next year to 2015, according to data compiled by Bloomberg.
The billionaire, who previously said that the Singapore project would add more than US$1 billion in annual earnings before interest, tax, depreciation and amortisation, didn't provide a new figure apart from saying that he was raising his forecast. The return period compares with four years for the Macau project, which cost about half as much to build, Mr Adelson said.
The Marina Bay Sands in Singapore will be a 'grand slam home run', Mr Adelson said. 'Asian people just love to gamble.'
Singapore aims to lure 17 million visitors and triple annual tourism revenue to S$30 billion (US$22 billion) by 2015, helped by two casino resorts, Marina Bay Sands and Genting Bhd's Resorts World Sentosa.
The Marina Bay Sands casino, which makes up about 3 per cent of the 15,000 sq m resort, has about 600 table games and more than 1,500 slot machines.
Asia has room for five to 10 cities like Las Vegas, Mr Adelson said. The most likely countries to approve casinos in the region are Japan and Taiwan, he said. -- Bloomberg
Source: Business Times, 29 Apr 2010
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