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Henderson Land Dev 0012
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| Chairman |
LEE Shau Kee |
| Issued Capital (Shares) |
2,147M |
| Par Value (HKD) |
2.000 |
| Market Capitalization (HKD) |
101,970M |
| Corporate Profile |
Principally engaged in property development and investment finance construction infrastructure hotel operation department store operation project management investment holding and property management.
Business Review - For the year ended June 30 2008
Business Review - Hong Kong
Property Sales
Consecutive interest rate cuts improved housing affordability and the influx of mainland buyers resulted in a property price rally in Hong Kong in the run-up from the fourth quarter of 2007 to early 2008 after which the overall market sentiment was dampened by stock market volatilities and the uncertain outlook for the global economy.
During the year the Group succeeded in releasing both of its luxurious developments at The Beverly Hills (Phase 1) and King''s Park Hill as well as its large-scale residential projects such as Grand Waterfront Grand Promenade The Sherwood and Royal Green at opportune moments with overwhelming response. Thus an attributable HK$9892 million worth of properties in Hong Kong was sold an increase of 25% as compared with HK$7895 million for the year before. Some projects such as CentreStage CentrePlace Scenic Horizon and Paradise Square were virtually sold out by the year end. Taking into account the Group''s share of profit contributions from associates and jointly controlled entities the total profit contribution of property development in Hong Kong to the Group amounted to HK$4025 million.
In November 2007 the Group launched The Sparkle with approximately 80% of the total of 400 residential units pre-sold by the year end. Meanwhile two houses of the Beverly Hills (Phase 3) had been sold through private sale by the year end although Phase 3 was not yet formally released for pre-sale. Their profit contributions will be reflected in the results for the forthcoming year when they will be ready for occupation.
Kowloon East covering the areas from San Po Kong through Kwun Tong is being progressively transformed from a traditional industrial district into a modern vibrant community supported by many upcoming facilities such as a new cruise terminal and the Sha Tin to Central cross-harbour railway line. Following the successful completion of Newton Place Hotel in the last financial year the Group continued to expand its presence in this distinctive commercial hub by completing another four prime buildings there during the financial year a reflection of its vision and forward thinking.
Midas Plaza was completely sold out within four months after its launch in August 2007. Win Plaza also located in San Po Kong where there have been virtually no newly-built industrial/office developments for years was completed in time to capture the pent-up demand for quality space. Kwun Tong 223 was hailed as a landmark office development in Kowloon East soon after its completion in late 2007 because it embodies not just state-of-the-art facilities but also an environmentally sustainable design. The urban waterfront location of Kwun Tong 223 allows tenants to enjoy breathtaking Victoria Harbour views whilst its open portal design enables a free passage of sea breeze to the whole neighbourhood. 78 Hung To Road to be linked up to the Kwun Tong 223 by an exclusive footbridge is a 23-storey quality industrial development with various transport modes including the Eastern Harbour Tunnel Kwun Tong Bypass MTR station bus terminal and ferry pier just footsteps away.
A low-density luxury residential project in Tong Yan San Tsuen was also completed during this financial year. Comprising two garden houses 11 low-rise apartment blocks and a recreational clubhouse this project will soon be put on sale offering the exquisite lifestyle and tranquil ambience that many city dwellers are now looking for.
Land Bank
At 30 June 2008 the Group had a land bank in Hong Kong with a total attributable gross floor area of approximately 18.4 million square feet made up as follows: 7.4 million square feet of properties held for or under development 1.0 million square feet of stock of unsold property units 9.0 million square feet of completed investment properties and 1.0 million square feet of hotel properties. In addition the Group held rentable car parking spaces with a total area of around 2.7 million square feet.
During the year the Group acquired the entire interest in Sha Tin Town Lot 539 development project and a 60% interest in 39 Conduit Road development project. The Sha Tin Town Lot 539 development project comprises mainly two blocks of 33-storey residential towers together with four blocks of low-rise residential buildings and ancillary parking spaces and other facilities. For the development at 39 Conduit Road a single block 46-storey residential building will be built providing 66 residential units parking spaces and clubhouse facilities. For the Group''s acquisition of these two projects a feature of the transaction is the guarantee by the vendor which provides that for each of the developments upon the expiry of two years from the date that the occupation permit for the development is issued the gross sale price of the units sold together with the value of the unsold units at such date shall be not less than a sum representing a 25% premium over the discounted development value.
In order to meet the evolving market demand and ensure efficient use of land resources the Group''s development sites are regularly evaluated for conversion into other purposes. During the year land premium for land use conversion was finalized with the government for the site at 24 Lee Chung Street Chai Wan. Demolition of the existing industrial building on the site is in progress and it will be developed into an office tower with a total gross floor area of about 173000 square feet. Meanwhile the Group is also pursuing land-use conversion for the site at 8 Wang Kwong Road Kowloon Bay as well as a joint-venture site at 19-21 Wong Chuk Hang Road Aberdeen of which 50% is attributable to the Group. Upon finalization of the land premium with the Government the site at 8 Wang Kwong Road will be developed into office or hotel whilst the site at 19-21 Wong Chuk Hang Road will be developed into office building with attributable gross floor area of approximately 258000 square feet and approximately 107000 square feet respectively.
The Group also remained active in the acquisition of agricultural land with high development potential. With the addition of about 2.3 million square feet in site area of agriculture land during the year the Group''s agricultural land reserve has increased to approximately 34.0 million square feet which is the largest holding among all property developers in Hong Kong.
During the year encouraging progress was made in land-use conversion for two agricultural land sites with the basic terms for land exchange having been finalized with the Government. The site in Wu Kai Sha Sha Tin is expected to provide a total developable gross floor area of approximately 3.0 million square feet upon completion of which approximately 53.75% or about 1.6 million square feet is attributable to the Group. The other site at Tai Tong Road Yuen Long is expected to provide approximately 1.17 million square feet in gross floor area of which 79.03% or approximately 0.9 million square feet is attributable to the Group. The land-use conversion for these two sites will be completed upon finalization of the land premium with the Government.
Meanwhile the land premium for the site in Chuk Yuen Tsuen of Yuen Long which is next to the Fairview Park with approval for conversion into a residential development comprising a total gross floor area of 28000 square feet is currently under negotiation with the Government. For the comprehensive residential development in Wo Shang Wai Yuen Long environmental impact assessment has been approved and environmental permits have been obtained from the Director of Environmental Protection. The Group has applied to the Town Planning Board for the necessary approval before negotiating with the Government for land exchange and land conversion premium. The site covering a total land area of about 2.3 million square feet is planned to be developed into a low-density residential development with a total gross floor area of approximately 890000 square feet.
Fanling/Kwu Tung North and Hung Shui Kiu were both designated by the Government as New Development Areas in the Chief Executive''s Policy Address and the Hong Kong 2030 Study in October 2007. In each of these two areas the Group held approximately 2.6 million square feet and 2.3 million square feet of land lots respectively. The Group will actively work in line with the Government''s development plans so as to broaden the source of development sites. Meanwhile the Group will continue its efforts in land-use conversion of other agricultural land lots so as to provide a steady pipeline of development sites in future years.
The Town Planning Board completed its review on the Yau Tong Bay ''Comprehensive Development Area'' zone and amended the Outline Zoning Plan. The Group will proceed to apply for land exchanges and finalization of the land premium. A master layout plan will also be drafted for the redevelopment of the old shipyard sites at Yau Tong Bay which is expected to provide a total developable gross floor area of approximately 5.35 million square feet of which about 800000 square feet is attributable to the Group.
Investment Properties
In Hong Kong at the year end date of 30 June 2008 the Group held a total attributable gross floor area of approximately 9.0 million square feet in completed investment properties comprising 4.4 million square feet of commercial space 3.2 million square feet of office space 0.8 million square feet of industrial/office space and 0.6 million square feet of residential and apartment space. 25% of this investment portfolio is located in Hong Kong Island with the remaining 30% and 45% located in Kowloon and New Territories respectively.
Benefiting from higher rents for new lettings and lease renewals the Group''s gross rental income for the year including those derived from the investment properties owned by the Group''s associates and jointly controlled entities rose by 10% to HK$3602 million while the total net rental income contribution was also up by 11% to HK$2550 million. At the year end the leasing rate for the core rental properties held by the Group''s subsidiaries (which excluded Kwun Tong 223 as it was only just completed) remained high at 94%.
IFC Mall which is host to some of the world''s most respected luxury brands making their debut in Hong Kong has established a unique position locally and it was almost fully let during the year. The Group''s other large-scale shopping centres which are mostly located right above or near to the MTR stations in new towns with populous captive customer bases from nearby housing estates also performed well. By the year end Metro City Phases II and III in Tseung Kwan O Sunshine City Plaza in Ma On Shan City Landmark I and City Landmark II in Tsuen Wan Citimall in Yuen Long Flora Plaza in Fanling Shatin Plaza and Shatin Centre each recorded high leasing rate of 97% or above.
During the year the Group continued to actively optimise the tenant mix engage in marketing and promotional activities and upgrade the facilities of its shopping centres. All these initiatives were directed at meeting the ever-changing needs of the Group''s clientele by providing an unrivalled shopping experience.
In the North Wing of Trend Plaza the conversion of its cinema to retail use was completed with this additional 20000-square-feet retail space almost fully let at a much better-than-expected rate by the year end. Metro City Phase II also underwent a face-lift during the year. On completion in 2009 its attractiveness as a regional shopping and entertainment hub will be further enhanced because its cinema with a letting area increased from 30000 to 50000 square feet plans to add three more high-quality cinema houses to become an eight-screen cinema. In the coming year major upgrade projects will commence at Sunshine City Plaza and at the South Wing of Trend Plaza. Renovation works for City Landmark I and Citimall are also in the pipeline.
The office leasing market stayed active with rental increases in some business districts helped by strong demand particularly from multinational corporations which were keen to expand or set up regional head offices in Hong Kong in view of the booming economy of mainland China. The International Finance Centre the most prestigious office complex in Hong Kong was almost fully let with a very satisfactory rental performance due to limited supply in Central. AIA Tower in North Point and Golden Centre in Sheung Wan also recorded high leasing rates at 95% and 96% respectively with over 100% rental growth on renewal of some leases. Kwun Tong 223 a Grade-A office tower of the Group offering over 1.0 million square feet of quality space was newly completed and tenants including a big 4 accounting firm which has leased an area of up to about 100000 square feet have started moving in. Further an international shipping company has leased an area of over 60000 square feet whilst leasing confirmation with some other multinational corporations have also been secured. In order to meet the growing demand for quality office space Kowloon Building on Nathan Road has been undergoing a major renovation and facility upgrade which is scheduled for completion in 2010.
The residential leasing market remained robust with expatriates from the banking and financial sectors continuing to be the major source of tenant demand for luxury properties on Hong Kong Island. The serviced suite hotel at Four Seasons Place located within the International Financial Centre complex and setting a new benchmark for personalised services and lifestyle living continued to achieve high occupancy and room rates. Eva Court in Mid-Levels was fully let by the year end with a 30% rise in rental for renewals and new lettings.
Hotels
The Four Seasons Hotel which opened for business in September 2005 reported further growth in occupancy and average room rate. It is home to a number of acclaimed restaurants and unique features such as a deluxe spa. Its 399 luxury rooms also feature breathtaking views of the city and world-famous Victoria Harbour. During the year its amenities received high praise for their outstanding performances with the hotel being named the Best Hotel in Asia by many travel magazines. ''Newsweek Japan'' even named it as the Best Business Hotel in the World.
The Group has four Newton hotels operating in Hong Kong with a total of 1445 guest rooms. Newton Place Hotel in Kwun Tong has reported steady business growth since it commenced operations in July 2007 whereas the Group''s other three Newton Hotels namely Newton Hotel Hong Kong Newton Hotel Kowloon and Newton Inn maintained a stable occupancy of around 80% with impressive rises in room rates during the year.
Construction and Property Management
The Group is committed to delivering quality throughout the construction process with vertical integration spanning planning design material sourcing construction and property management all in-house.
The Group''s reputation as a quality property developer was reinforced when Four Seasons Hotel and Four Seasons Place won the Quality Building Awards 2008. The Union Hospital Extension a project under the Group''s project management was also awarded with a Certificate of Merit in the same Awards. The Awards are presented biannually by a panel of judges drawn from nine professional industry organizations giving the honours unrivalled credibility and prestige.
The Group''s talented workforce is the driving force behind such remarkable successes. In order to ensure their safety on the construction sites and achieve the goal of raising quality ever higher training and seminars are regularly provided whilst advanced devices and technology (such as a self-developed construction information system to monitor operational efficiency and cost effectiveness) are also being constantly introduced. During the year numerous accolades were received in recognition of the unwavering commitment of the Group''s construction arm to site safety. These included ''Proactive Safety Contractor Award 2007'' and ''Safety Achievement Award 2007''. The General Manager of Construction Department of the Company was appointed Chairman of the Construction Industry Council Training Academy sharing the Group''s experience in construction training and setting the standard for craft accreditation in the industry.
Comprehensive after-sale property management service is as important as building quality. The Group''s member property management companies Hang Yick Properties Management Limited and Well Born Real Estate Management Limited currently manage 184 property developments throughout Hong Kong comprising a total of over 70000 residential commercial and industrial units and shops and more than 17000 car parking spaces.
These two property management companies received 219 performance-related accolades this year including the Q-Mark Service Scheme certification and a ''Customer Relationship Excellence award'' for the Group''s Customer Satisfaction Quality System. Being each individually named as a ''Caring Company'' consecutively for six years the two companies again demonstrated their serious commitment to community services and their staff once again won the ''the Highest Voluntary Service Hours Award''. All these honours have resulted in a brand name that local families associate with quality and hence the two companies received ''Certificate Award for the Best Brand Enterprise'' from the Hong Kong Productivity Council. Well Born also became the first property management company to be awarded ''Hong Kong Top Service Brand'' by the Hong Kong Brand Development Council.
The Group''s strong brand name and reputable property management services were also recognized in mainland China. Hengbao Garden a residential development in Guangzhou under the Group''s management was recently named as the ''Housing Community Showcase in Guangdong Province 2007'' in addition to its honour as the ''Housing Community Showcase in Guangzhou 2005''. Following the success of Hengbao Garden the Group will further extend its experience in providing quality property management services to other customers in mainland China.
Business Review - Mainland China and Macau
Underpinned by solid economic fundamentals increasing infrastructure investment upbeat consumption sentiment as well as the general increase in corporate earnings mainland China reported successive GDP growth leading to a greater demand for quality housing units in a quest for better living conditions.
The real estate market in mainland China however experienced a dramatic change during the past year. In the second half of 2007 transacted prices in many cities had been repeatedly bid up to all time highs as a result of fierce competition at land auctions. The subsequent upsurge in housing prices which were beyond the affordability of the general public resulted in an overheated property market. With the implementation of a series of new macroeconomic controls and tightened credit policy in late 2007 as well as the substantial adjustment in the mainland equity markets since early 2008 less financing sources became available. Sentiment became cautious at land auctions and incidents of calling off were recorded. For those land lots which were successfully sold transactions were mostly recorded at the reserve price.
As disclosed in the previous annual report the Group had a development land bank in mainland China with an attributable developable gross floor area of approximately 101.5 million square feet at the end of August 2007 whereas another 50 million square feet of developable floor area was under negotiation. In light of the dramatic change which took place in the mainland property market during the year further land acquisitions by the Group have been slowed down to enable revised terms to be negotiated. At the end of June 2008 the Group had a land bank in mainland China of approximately 115.7 million square feet in developable gross floor area of which around 78% was earmarked for residential development for sale 9% for commercial space 11% for office space and 2% for clubhouse and other communal use. The balance of the total land cost payable for such development land bank amounted to RMB1379 million.
Despite the reduced turnover in mainland China''s property sales and price competition in the first half of this year market demand for quality housing units in the mid to high end segment is expected to be strong as they provide a hedge in the current inflationary and negative interest rate environment. Additionally most of the Group''s residential projects in the second-tier cities are located in the high-growth and populous provincial capitals municipalities and provinces such as Jiangsu where there is strong purchasing power. Coupled with the low land cost of the projects their prime locations quality design and finish as well as the provision of comprehensive facilities this will ensure handsome profit for the Group''s property development business in the mainland.
As previously reported the Group adopts a two-pronged strategy in its business development in mainland China. In the prime cities the Group targets those prime sites with heavy pedestrian flow and easy access for development into large-scale complexes of exceptional design and quality. In the second-tier cities which are mostly provincial capitals or municipalities with a preponderance of middle class residents the Group focuses on large-scale developments so as to achieve an efficient use of land as well as long-term appreciation in property value. In line with this strategy the Group has identified and purchased the following development sites:
In July 2007 a commercial land parcel of about 1200000 square feet in Xiangcheng District of Suzhou Jiangsu Province was bought for RMB669 million whilst its adjacent commercial land lots totalling 400000 square feet in site area were also added to the Group''s land bank in December 2007 at a consideration of RMB153 million. With an aggregate gross floor area of over 10000000 square feet these two recently acquired sites will be jointly developed with their neighbouring 3200000-square-foot residential land lot which the Group acquired in the previous financial year into a large-scale self-contained community with a planned gross floor area of about 6800000 square feet. The project enjoys excellent accessibility as it is situated along the city''s main thoroughfare of Renmin Road North Extension which upon its due completion by the end of 2008 will emerge as another new town centre. The City''s planned subway line also runs along Renmin Road and is expected to be operational by 2012. The whole project calls for a contemporary water-themed planning design and Aedas Limited has been appointed as the design architect for its residential development which is scheduled to be completed in four phases from the second quarter of 2010 onwards. The construction for its Phase 1 residential development will commence by the fourth quarter of 2008 providing a total gross floor area of about 650000 square feet for 540 families; pre-sale is targeted to be launched in June 2009.
In Yixing another city in Jiangsu Province a land lot of about 400000 square feet was acquired in July 2007 at RMB158 million. Its serene location in an island of busy town centre has created both a convenient and relaxing living ambience. The site foundation work will commence in November 2008. With its single-phased completion by August 2010 there will be townhouses mid and high-rise apartments and a residents clubhouse all providing a total gross floor area of about 700000 square feet. This project is planned to make its first foray into the market in mid-2009.
A project located at Lot No. 155 Huangpu District in Shanghai abutting Nanjing Road East with an approved gross floor area of approximately 730000 square feet was acquired by the Group in August 2007 at HK$1357 million. Located right at the famous walking street in close proximity to the Bund this prime site will be developed into a Grade A office building and shopping arcade with a 17-storey tower over five levels of podium with its facade designed by the world-renowned Tange Associates. Its four-level basement with an additional gross floor area of about 300000 square feet will house an interchange for two major subway lines as well as some car parking spaces and commercial areas. It is due for completion in late 2009 in time to capture the opportunities offered by World Expo 2010. An international property consultant has been appointed for its pre-leasing work.
In August 2007 a parcel of land of about 3730000 square feet on the northern banks of Pu River in the Shenyang New District Development was also purchased for about RMB525 million. Together with the land lot at the other side of the river with the total site area of about 4100000 square feet acquired earlier a large-scale residential and commercial community will be developed. Upon completion it will have a total gross floor area of about 15500000 square feet comprising town houses low rise apartments and residential towers. Planning of the development is underway.
In September 2007 the Group acquired another piece of land of about 5600000 square feet in Yixing at about RMB1016 million. Benefiting from the city''s strategy to develop the eastern suburb this land parcel in Donggui New District is fronting and embracing the fascinating scenic beauty of the Donggui Lake and is earmarked for a comprehensive community with a total gross floor area of about 9000000 square feet comprising of luxury residences with low and high rise apartments. This will be a multi-phased development and construction work for the first phase of this project comprising 800000 square feet of residences will commence by early 2009. Pre-sale is expected to be launched in August 2009 with scheduled completion in the second quarter of 2010.
In September 2007 the Group also won the bid for a land parcel of about 190000 square feet in the downtown area of Shenyang Finance and Trade Development Zone at a consideration of about RMB282 million. This together with the adjacent land lot with a site area of about 310000 square feet acquired in April 2007 at about RMB334 million will be jointly developed into Shenyang International Finance Centre. The groundbreaking ceremony in May 2008 was used as an opportunity to unveil the iconic and experiential architectural concept for this ancient capital of Liaoning Province. The whole project located near the subway station in the proximity of the railway terminus will comprise three mega towers for offices serviced apartments and a hotel resting on a five-level retail podium providing a total gross floor area of about 5700000 square feet. Pei Partnership Architects a firm closely associated with the world-renowned architect I.M. Pei was appointed as the design architects for the 89-storey office tower which will be the tallest building in northeast China upon completion in 2012. Aedas Limited the world''s fourth largest architectural practice is tasked with designing the master plan for the rest of the development.
In October 2007 the Group made a successful bid for a land lot of about 500000 square feet in Qixia District of Nanjing the capital city of Jiangsu Province at a consideration of RMB558 million. Located in the downtown area within walking distance from the Maigaoqiao subway station this prime site is earmarked for a luxurious residential development with a total gross floor area of about 900000 square feet. It will be complemented by commercial area and community conveniences such as healthcare cultural facilities and a sports centre. Following the commissioning of its nearby road network construction will commence by the third quarter of 2009 and part of its Phase 1 development is planned for completion by the second quarter of 2011.
The Group through a 55%-owned joint venture also acquired in October 2007 a land lot of about 3900000 square feet in the Gaoling area in Kaifu District of Changsha at about RMB350 million. In Changsha the capital city of Hunan Province Kaifu District has benefited from the city''s development strategy to push northward. Its Gaoling area boasts superb air-sea-land transportation links including the Beijing-Guangzhou railway line Changsha international airport and deepwater terminal. Planning of the development is now underway.
In June 2008 the Group acquired the second piece of land in Nanjing at a public auction at a reserve price of RMB600 million. Located at the north-eastern part of the city the land parcel in Xianlin New District boasts a site area of about 1600000 square feet and offers gross floor area of 1700000 square feet. Planning is underway to develop the site into a high-end residential project complemented by facilities such as a nursery amenities and a community centre. With the relocation of colleges and universities into the district and the completion of Xianlin subway station in the near future this well-known university town''s community facilities and transportation network will be further enhanced. Construction for its first phase of development will commence by the second quarter of 2009 and the whole project will be completed by the fourth quarter of 2011.
Shortly after the end of the financial year the Group entered into a joint venture agreement with Sun Hung Kai Properties and Wharf on a 30:40:30 ownership basis to jointly develop a composite development site of approximately 1860000 square feet in Dongda Avenue in Chengdu the capital city of Sichuan Province. Superbly located in Jinjiang District with easy accessibility from two subway lines which are either under construction or under planning the Dongda Avenue development is planned to provide an office tower of over 280 metres rivalling the prestigious International Financial Centre in Hong Kong a five-star hotel a high-end shopping centre offering international retailers serviced suites and residential apartments. There is an adjoining site of approximately 350000 square feet which will be sold to the project company at the same unit price at a later stage; this piece of land will therefore be included in the overall planning of the development. Upon completion a total gross floor area of over 13000000 square feet will be provided.
In addition to the acquisitions of the above land lots the Group has also made satisfactory progress in the following development projects during the year.
World Financial Centre an international Grade-A office complex in the Chao Yang Central Business District of Beijing with the world-renowned Cesar Pelli as its design architect is expected to be completed in the fourth quarter of 2008. Pre-leasing has commenced and it has already secured the commitment of a renowned multinational corporation while negotiations with a host of top-notch international financial services groups and professional firms are near the final stage.
In Shanghai both development projects at 130-2 Tianmu Road West and 147 Tianmu Road West progressed well with targeted completions in mid-2009 and early 2011 respectively. In aggregate they will provide approximately 700000 square feet of prime office space and 100000 square feet of retail area in the busy Zhabei District. Meanwhile the project at Lot 688 Nanjing Road West whose quartz-like facade is designed by the world-renowned Tange Associates comprises a 22-storey office tower plus a 2-level retail podium. Foundation work has commenced and it will provide an aggregate gross floor area of approximately 700000 square feet upon completion in 2011. It will be held for rental purposes and many famous multinational corporations have expressed their interest by submitting offers to lease. Pre-leasing work is being planned.
In Xingsha Town of Changsha the Champion Arch is planned to have extensive water features and greenery making it a desirable residential community. There will be approximately 7800000 square feet of deluxe apartments community facilities and amenities to be built in three phases providing homes for over 4000 families. Construction of the first batch of residential units with a total residential gross floor area of about 1300000 square feet together with commercial area clubhouse and kindergarten will commence works in September 2008 with scheduled completion in late 2009.
Superbly located in the city centre close to the Kaifu District Government Offices the Group''s other site in Changsha is planned for residential development with a total gross floor area of about 2480000 square feet.
In Xuzhou of Jiangsu Province Xuzhou Lakeview Development is located within the new administration centre of the city and construction work has already begun following the relocation of all major municipal government departments into this district in late 2007. Fronting and embracing the scenic views of Dalong Lake the development plan calls for a water-themed design for this residential community project and it will be completed in four phases with an aggregate gross floor area of about 5300000 square feet. Pre-sale of Phase 1 development of 342 residences with a total gross floor area of about 480000 square feet is planned to be launched in May 2009. Phase 1 is slated for completion in the second quarter of 2010.
La Botanica the largest development ever approved by the Xian City Government of Shannxi Province is a 50/50 joint venture formed by the Group and Temasek Holdings (Private) Limited of Singapore. Located within the scenic Chan Ba Ecological District with easy access to the city centre via the Third Ring Road East and by subway - which are both under construction this riverside community project will have a total gross floor area of over 33000000 square feet upon completion in late 2016 of which 90% is designated for residential use providing homes to 30000 families. Foundation works for part of its Phase 1 development commenced in July 2008 and upon completion in 2010 it will provide a total gross floor area of approximately 1200000 square feet for about 1000 households. Pre-sale for this phase of residences is scheduled for October 2008.
The Group''s other residential project in Xian is located on the main artery of Second Ring Road East (also known as Jin Hua North Road) in close proximity to the planned subway system. A grouping of 16 to 33 storey apartment towers will be built around its spacious greenery and residents clubhouse allowing unhindered views to 3000 households. Together with the street-level shops along the Second Ring Road East the entire project will have a total gross floor area of 4200000 square feet upon the single-phased completion by late 2010. Construction will commence soon and pre-sale will begin in the first half of 2009.
In Chongqing one of the four provincial-level municipalities in mainland China a prime site on the banks of Yangtze River in Nan''an District is designated for luxurious residential development supported by a shopping centre kindergarten and clubhouse facilities together with a scenic park nearby. To echo the government''s call for improving cityscapes under the new ''Two-River and Four-Shore'' policy the development plan for this riverside project has been revised and it will be completed in three phases providing a total gross floor area of about 3750000 square feet. Site works in respect of Phase 1 development will commence in the second quarter of 2009 with scheduled completion in the fourth quarter of 2010. Part of Phase 1 with a total gross floor area of 800000 square feet for 430 households will initially be launched for pre-sale.
The project in Erlanger Phoenix Area the Group''s other comprehensive community development in Chongqing is located on a site next to the Chengdu-Chongqing Expressway with scenic attractions such as Caiyun Lake and Taohua Brook in the proximity. In order to allow efficient use of land resources the development plan has been revised and this comprehensive community comprising residential apartments clubhouse a kindergarten and shopping facilities will be built in three phases providing an aggregate gross floor area of about 2800000 square feet. Construction for its Phase 1 development will commence by the fourth quarter of 2008 with scheduled completion by the first quarter of 2010. Out of Phase 1 units providing homes for 155 families with a total gross floor area of about 280000 square feet with first be offered for pre-sale.
To sum up the annual square footage of developable floor area to be completed by the Group in mainland China is expected to be approximately 2.1 million square feet 4.8 million square feet and 14.2 million square feet for the three years ending 30 June 2009 30 June 2010 and 30 June 2011 respectively. For the year ending 30 June 2009 World Financial Centre in Beijing with a developable gross floor area of 2.1 million square feet will be completed. For the year ending 30 June 2010 two prime office developments in Shanghai will account for a total developable gross floor area of approximately 1.1 million square feet whilst the remaining 3.7 million square feet will be residential premises. For the projects to be completed in the year ending 30 June 2011 the remaining two prime office developments in Shanghai will make up 8% of the annual completion whilst the residential premises will account for the remaining 92%.
During the year property sales in mainland China attributable to the Group amounted to HK$1271 million mainly from Hengli Bayview in Guangzhou which was completed in February 2008 with about 11% out of its 2090 units remaining available for sale by the year end. Meanwhile the Group increased its stake in some of the completed investment properties in August 2007 expanding the portfolio to 3.1 million square feet. The leasing performance of these investment properties remained satisfactory and the Group''s attributable gross rental income grew by 33% to HK$270 million for the year. Along with a new look for the atrium in the shopping mall Beijing Henderson Centre was repositioned with a new tenant mix which includes a zone specially dedicated to trendsetting sportswear retailers in addition to a full range of food and beverage outlets. Grand Gateway Tower II in Shanghai was over 98% let by the year end with close to 30% rental increase on lease renewal and new lettings. Shanghai Skycity commanded over 100% rise in rental for a new letting to an anchor tenant occupying almost the entire shopping arcade whereas Hengbao Plaza in Guangzhou also recorded a 57% growth for its monthly rental income in June 2008 compared with June 2007.
Joint-Venture Development in Macau
In April 2005 the Group entered into an agreement to jointly develop a waterfront site with a land area of approximately 1.45 million square feet in Taipa Macau. The project is still under application for land-use conversion with the total gross floor area to be finalized.
Acquisition of Henderson Investment Limited''s Entire Interest in The Hong Kong and China Gas Company Limited
During the year the Company acquired Henderson Investment Group''s entire interests in 2366934097 shares of The Hong Kong and China Gas Company Limited representing approximately 39.06% of its total issued share capital so as to streamline the Group''s corporate structure. Following completion of the transaction approximately 39.06% effective interest of Hong Kong and China Gas is held directly by the Company and Henderson Investment remains as a listed company focusing on the infrastructure business in mainland China.
Henderson Investment Limited (67.94%-owned by the Company)
For the year ended 30 June 2008 the profit of this group attributable to equity shareholders amounted to HK$35390 million representing an increase of HK$29999 million over the previous year.
Excluding the profit for the year from discontinued operations of HK$35265 million (following the disposal of its entire interest in 2366934097 shares of Hong Kong and China Gas to the Company) the profit attributable to equity shareholders of this company for the year ended 30 June 2008 from continuing operations which comprised mainly the infrastructure business in mainland China amounted to HK$125 million representing a decrease of HK$97 million or 44% from the previous year. This was mainly attributable to a reduction in bank interest income during the year following its cash distributions to shareholders of approximately HK$15237 million (or HK$5 per share) in June 2007 approximately HK$3139 million (or HK$1.03 per share) in December 2007 and approximately HK$3687 million (or HK$1.21 per share) in January 2008 despite a higher profit contribution from its infrastructure business.
This group''s infrastructure business comprises interests in Hangzhou Qianjiang Third Bridge and Maanshan City Ring Road which are both held through China Investment Group Limited except for certain shareholdings in the toll bridge which the Henderson Investment Group holds directly. In September 2007 the Henderson Investment Group acquired the remaining 35.94% interest in China Investment Group Limited for a cash consideration of approximately HK$145 million making it a wholly-owned subsidiary. The Henderson Investment Group''s effective interests in Hangzhou Qianjiang Third Bridge and Maanshan City Ring Road have thus increased to 60% and 49% respectively.
During the year toll revenue for Hangzhou Qianjiang Third Bridge rose by 57% to HK$216 million reflecting the increased traffic volumes following the completion of major repair and maintenance work in October 2006 whilst toll revenue for Maanshan City Ring Road also grew by 10% to HK$56 million.
As announced by Henderson Investment on 27 August 2008 it is currently negotiating with the joint venture partner of Hangzhou Henderson Qianjiang Third Bridge Company Limited (the "Third Bridge JV") to sell the Company''s entire 60% equity interest in the Third Bridge JV to the joint venture partner although no agreement has been entered into; and subject to the entering into of an agreement for the disposal of the interest in the Third Bridge JV it is considering the acquisition of new assets.
Source: Henderson Land Dev (00012) Annual Results Announcement |
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Last Updated: 9 Feb 2010
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