Henderson Land Development Ltd, underlying profit attributable to equity shareholders for the six months ended 30 June 2014 was up by 46% period-on-period to HK$5,030 million.
Included therein was pre-tax profit contribution from property sales (including the attributable share of contribution from subsidiaries, associates and joint ventures) of HK$1,225 million, which increased by 26% period-on-period, whilst attributable pre-tax net rental income amounted to HK$2,957 million, which increased by 8% period-on-period. Besides, there was a total net gain of HK$598 million arising from the disposal of investment properties (including the shops at “Centre Stage”) Hong Kong.
CONSTRUCTION AND PROPERTY MANAGEMENT
The increase in turnover of HK$134 million to HK$667 million for the six months ended 30 June 2014 was mainly attributable to the increased turnover contribution in the aggregate amount of HK$548 million (2013 : Nil) arising from the construction contracts undertaken for “Green Code”(being a property development project of HK Ferry) and Phases 2 and 3 of “Double Cove”, which was partially offset by the turnover contribution in the aggregate amount of HK$406 million recognised during the corresponding six months ended 30 June 2013 in relation to Phase 1 of “Double Cove” and “The Reach” but which nevertheless did not recur during the six months ended 30 June 2014.
The increase in profit from operations to HK$7 million for the six months ended 30 June 2014 from the loss of HK$30 million for the corresponding six months ended 30 June 2013 is mainly attributable to (i) the increase in gross profit from construction contracts of HK$21 million due to the increase in turnover contribution as mentioned above ; and (ii) the period-on-period decrease indepreciation charge of HK$15 million for the reason that certain construction plant and machinery acquired by the Group became fully depreciated during the six months ended 30 June 2014.
The Group has also been active in acquiring old tenement buildings for urban redevelopment purposes. The newly completed “The Gloucester” in Wanchai was named Merit Winner in the Hong Kong Residential (Single Building) Category of the prestigious Quality Building Award 2014.
Leading features recommended by the Leadership in Energy and Environmental Design (LEED) and BEAM Plus rating systems have been adopted in the Group’s projects. For instance, in addition to the use of self-developed pre-fabricated building components, the Group also contracted for the foundation piling works for its development projects so as to expedite the construction process and minimize disruption to the neighbourhoods of these populous districts.
Against the prevailing backdrop of soaring material costs and a shortage of construction workers, all the above measures can help raise quality and cost efficiency by reducing construction waste and manpower. The following development projects in Hong Kong were completed during the period under review:
In mainland China.
The Group’s Construction Department takes charge of the key process of selecting main contractors and sub contractors, material sourcing and work tendering. They also closely monitor every project’s cost effectiveness, work quality, construction safety and completion progress.
The Group also offers Professional training so as to ensure the same standard of excellence in building quality is achieved. The Group’s Property Management companies, namely, Hang Yick Properties Management Limited, Well Born Real Estate Management Limited and Goodwill Management Limited, collectively manage over 80,000 apartments and industrial/commercial units, 8 million square feet of shopping and office space, as well as 20,000 car parking spaces in Hong Kong and mainland China.
In the first quarter of 2014, Hong Kong experienced a stagnant property market. In addition to the impacts of stamp duties and other cooling measures, the tapering of the quantitative easing monetary policies in the United States and the uncertain economic outlook in mainland China resulted in a “wait-and-see” attitude among homebuyers. The Government revised the terms of Double Stamp Duty in May, allowing more time for second-home buyers to sell their original properties. The resultant release of pent-up housing demand led to a revival in market activities.
“Double Cove Starview” (Double Cove – Phase 2) in Ma On Shan was launched for sale in January 2014. This waterfront development, with its close proximity to the MTR terminus, was well received by the market and over 93% of its total 865 residential units were sold by the period end. Together with the re-launch of “Double Cove” – Phase 1, “39 Conduit Road” at Mid-Levels, “The Reach” in Yuen Long, “Green Code” in Fanling, as well as an array of urban redevelopment boutique residences under “The H Collection”, the Group sold an attributable total amount of HK$5,382 million of Hong Kong residences during the six months ended 30 June 2014.
Premium office and industrial developments, including “E-Trade Plaza” in Chai Wan, “Global Trade Square” in Wong Chuk Hang and “Global Gateway Tower” in Cheung Sha Wan, were also put up for sale, whilst the shops at “CentreStage” were disposed of during the period. Attributable proceeds arising from the disposals of these industrial/commercial developments and shops totalled HK$1,173 million. Including the aforesaid residential sales revenue, the Group sold an attributable total amount of about HK$6,555 million of Hong Kong properties during the period under review.