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1. Little interest in resumption of land sales, says developer

2. Glorious Sun to spend $1.1b on hotel

1. Little interest in resumption of land sales, says developer
Eli Lau, The Standard 6 June 2003

The resumption of land sales in December would attract few developers as the property market was still in the doldrums, Hang Lung Properties chairman Ronnie Chan said yesterday.

Speaking after a signing ceremony for a HK$5.5 billion syndicated loan agreement, Chan said he believed the end of the one-year freeze on land sales was unlikely to have a negative impact on the company.

``No matter whether the government resumes land sales this year or postpones it to next year, it won't be a problem for our company,'' he said.

Chan said it was too early to say whether the freeze would be extended, but stressed that the government had tried its best to halt the slump.

In November last year, Secretary for Housing, Planning and Lands Michael Suen announced a series of measures, among them the suspension of land auctions, to revive the property market. Market watchers believe the freeze will be extended as they estimate home prices will drop as much as 20 per cent this year.

Chan admitted the market would remain weak for the next two to three years, until the current abundant flat supply was digested.

Commenting on the Gold-Face Holdings scandal, in which the developer failed to repay its syndicated loans, Chan said smaller developers would inevitably face financial problems because of the current weak property market.

``But it is unrelated to the existing practise of pre-sales of uncompleted flats,'' Chan said. ``I think the current system operates very well.'' The HK$5.5 billion syndicated loan signed yesterday would be used to pay Hang Lung's debt and fund future development. HSBC and Hang Seng Bank were the lead arrangers.

Hang Lung shares closed unchanged at HK$7.55 yesterday.

2. Glorious Sun to spend $1.1b on hotel
SANDY LI, SCMP 6 June 2003

Glorious Sun Group plans to spend about $1.1 billion to build a three-star 960-room hotel in Kowloon Bay, according to chairman Charles Yeung Chun-kam.

"I am very optimistic about the prospects for the hospitality sector, especially the two and three-star hotel market. Demand in this segment will outstrip supply in the next five to seven years," he said.

Mr Yeung has urged the government to provide incentives to encourage hotel development, saying it would help create jobs. "For my proposed 960-room hotel, I will need to hire about 1,000 people when it is completed in two to three years," he said.

The group's hotel project will be financed by internal resources.

The site's proximity to the Tsim Sha Tsui tourist belt makes it suitable for hotel development.

However, Mr Yeung said a decision on whether the project would go ahead was subject to the land premium demanded by the government.

"The land premium will have a direct impact on our investment return," he said.

The group won Planning Department approval in February to develop a hotel on the site.

It would build a commercial building if the hotel project proved unviable, he said.

Meanwhile, Mr Yeung said the group's One Peking project in Tsim Sha Tsui was expected to provide annual rental income of about $120 million .

He said its retail spaces had been fully leased and achieved monthly rates of $50 to $450 per square foot.

About 90 per cent of the office space had been taken up at $14 to $18 per square foot per month while 65 per cent of space earmarked for restaurants had been leased.