Mid-sized developer Kowloon Development (0034) has shrugged off worries facing the property market and economy and will stick to its business plans as it seeks to maintain property sales.
Speaking after the company AGM Wednesday, chairman Johnny Or Wai-sheun said: “We will take note of short term changes [in the market] but we will concentrate on the mid-to-long term development strategy.”
Or was replying to a question regarding the government announcing the winners of the latest land tenders on Tuesday where a plot of land in Tseung Kwan O was sold for a less than expected.
Regarding the government’s stamp duty measures to control property speculation and expectations of hikes in US interest rates, Or said these played a psychological effect and could cause a correction in the market.
“I feel that even if there was a correction, it would be slight and not very big,” Or said.
Last March, the company reported a profit attributable to shareholders of HK$1.89 billion for 2012, up 22 percent year-on-year.
The company continued to be optimistic about sales in China and in Macau saying that there would be profit growth from the mainland investments.
Current projects in the mainland include phase one and phase 2 of Le Cove City in Shenyang and Le Cove City in Wuxi.
Or said so far in the first half of 2013 it has recorded over HK$10 billion worth of sales with most of it coming from its Macau projects.
To replenish its land bank, Or said the company has not slowed its focus on buying old tenement buildings in the urban areas for eventual redevelopment.
“After all, old buildings in the urban areas are in good locations and gives a competitive edge to the future product,” Or said.
Asked about its expenditure on construction of its projects for this year, executive director Dickson Lai Kai-fai said the company expects to spend about HK$1billion to HK$1.5 billion in 2013 for all its projects, depending on progress.
This estimate was likely to go up in 2014 as the company maintains progress on its projects.
“I expect to about HK$2 billion,” Lai said.