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1. K Wah triggers auction

2. Lai Sun slips deeper into red on plaza sale

1. K Wah triggers auction
Raymond Wang, The Standard 19 April 2004

K Wah Properties is understood to have successfully triggered the first auction since the government announced the resumption of land sales.

Industry sources said the mid-sized developer had submitted bids for two residential lots on the application list that met the government's undisclosed minimum price.

The Lands Department is expected to make an announcement shortly on the sale of the sites, at Ma On Shan and Sha Tin, and the auction could be held next month, fetching about HK$2 billion.

The bids reflect mounting interest among developers eager to replenish their land banks as sentiment improves in the property market which has seen a surge in flat prices.

Several bids submitted in the three months since the government reopened the application list with 17 sites failed to meet the starting price.

K Wah declined to confirm its bids.

The sites, at Tung Lo Wan Hill Road, Sha Tin and Area 77, Ma On Shan, could generate a total gross floor area of about 750,000 square feet and 260,000 sq ft, respectively.

Surveyors predicted the Ma On Shan site would sell for HK$1.4 billion, while the Sha Tin site could fetch HK$500 million. Mid-sized developers Yu Tai Hing Properties and Tai Cheung Holdings said they are interested in bidding.

K Wah has focused on developments in Shanghai since the SAR government suspended land sales in November 2002 to stop the slide in property prices. The last auction was in September 2002.

K Wah recently proposed that the government turn the former North Point Estate site into a culture centre that would blend with the West Kowloon cultural hub across the harbour and boost tourism.

Meanwhile, real-estate agencies said PCCW has decided to reserve more than 300 apartments for would-be buyers of Bel-Air on the Peak - a luxury project at Cyberport.

The average selling price has been raised to HK$8,000 to HK$9,000 per square foot, agents said.

Separately, agents estimated about 70 new flats were sold over the weekend.

Henderson Land Development's Metro Harbourview in Tai Kok Tsui had the best sales, with about 15 units selling at an average price of HK$3,500 to HK$3,800 psf.

Cheung Kong (Holdings) sold about 10 units at its Caribbean Coast project in Tung Chung at HK$2,800 to HK$3,400 psf.

2. Lai Sun slips deeper into red on plaza sale
Raymond Wang, The Standard 19 April 2004

Debt-laden Lai Sun Development sank deeper into the red in the first half, dragged down by a one-time loss of HK$273 million from the sale of Causeway Bay Plaza I.

The developer posted a net loss of HK$167.12 million for the six months ended January 31, compared with a HK$115.52 million loss a year earlier.

The company sold Causeway Bay Plaza I to Wing On Properties and Securities for HK$1.2 billion in August. The disposals of Causeway Bay Plaza I and Lai Sun Yuen Long Centre led to a 24 per cent drop in rental income compared to the same period the previous year.

On the property development front, Lai Sun plans to offer two joint-venture projects for sale this year to take advantage of rising prices, chairman Peter Lam said.

He also revealed the company hopes to reach an agreement with creditors on a debt restructuring plan.

The plan was unveiled as the property firm said loss per share increased to four HK cents from three HK cents a year ago.

Its technology affiliate, eSun Holdings, whose auditors again issued a disclaimer on the financial statements of the company for the year ended December 31, 2003, reported the full-year net loss widened to HK$92.71 million from HK$68.79 million in 2002. The loss was largely due to the absence of interest income contribution in respect of the HK$1.5 billion debt owed by its associate, Furama Hotel Enterprises, a wholly-owned subsidiary of Lai Sun Development.

Shares of Lai Sun Development rose 1.19 per cent to close at HK$0.17 on Friday.

Parent company Lai Sun Garment (International) posted a profit of HK$120.8 million for the six months ended January 31, up 1,069 per cent from HK$10.33 million a year ago. Earnings per share were 8.4 HK cents, against 0.72 HK cent previously.

The bulk of the profit was derived from the contributions from both its mainland property unit, Lai Fung Holdings, and its garment operation, the company said.

Meanwhile, Lai Fung reported a 296 per cent increase in its six-month net profit to HK$50.07 million from HK$12.65 million a year earlier due to improved property sales on the mainland. Earnings per share were 1.08 HK cents, up from 0.33 HK cent a year ago. A HK$42.5 million gain from a property transaction in Zhongshan City was the largest contributor.

The group's retail arm, Crocodile Garments, announced a 15 per cent fall in interim profit to HK$10.9 million from HK$12.82 million in the previous period. Earnings per share fell to 1.77 HK cents from 2.08 HK cents.