No effect of property cooling measures on turnover
With the government recently racking up property cooling measures, half year underlying profit at leading developer Henderson Land (0012) dipped slightly though turnover was not affected, jumping by almost 20 percent,
For the six months to 30 June 2013, the company, controlled by tycoon “Uncle Four” Lee Shau-kee, reported underlying profit dropping four percent year-on-year to HK$3.45 billion.
Turnover climbed 19.6 percent to HK$8.59 billion of which sales of properties stood at HK$4.97 billion while rental income was HK$2.46 billion.
If the increase in fair value of investment properties and investment properties under development is included, then profit attributable to equity shareholders edged up 3.1 percent to HK$7.76 billion.
Within this HK$7.76 billion is a sum of HK$3.04 billion representing the company’s share of profits less losses from associate companies and joint ventures.
Last February, the government doubled the stamp duty on property transactions while the Hong Kong Monetary Authority tightened mortgage lending.
Shortly after developers had to grapple with the strict Residential Properties (First-hand Sales) Ordinance that came into effect in late April.
The company said in a stock exchange notice that it was the only developer in Hong Kong able to maintain sales in compliance with the new sales requirements.
During the period, the company launched pre-sales of its urban development boutique residences with sales of High Place in Kowloon City and High Point in Cheung Sha Wan.
It also started sales of its Green Code project in Fanling which it is developing with associate company Hong Kong Ferry (Holdings) (0050).
“By the end of the period, nearly eighty percent of its total 728 residential units had been sold,” the company said.
The ordinance did not cover commercial property so the company launched pre-sales of a grade A office tower, the Global Trade Square in Wong Chuk Hang.
Coupled with sales at its other projects, the company sold an attributable total of HK$5.89 worth of property in Hong Kong during the reporting period, an increase of 30 percent year-on-year.
The company will launch sales of four projects in the second half of this year.
They are Double Cove (Phase 2) in Ma On Shan, 1-7A Gordon Road in North Point, High Park Grand and High park both of which are in Prince Edward.
The company has the largest land holdings of any property developer in the New Territories, standing at 43 million square feet as the end of June.
As regards the government’s proposals for new town extensions in Kwu Tong North and Fanling North, where the company has 2.7 million square feet of land, the company said 900,000 square feet of it has been assessed as eligible for in-situ land exchange.
This would allow development in conjunction with the new town extension development plan.
The government would resume the remainder of the land holdings after paying cash compensation.