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Amoy expects tough year for rental income 2.
Authority endorses freeze on HOS sales
1. Amoy expects tough year for rental income
Property investor and developer Amoy Properties could see a negative growth in
rental income for the year to June 30 next year, according to chairman Ronnie
Chan Chi-chung. After announcing the profits for the three companies in the Hang
Lung Group, Mr Chan said this year would be difficult for Amoy and the company
aimed at just keeping the net profit on par with the past year. Amoy posted a
13.6 per cent increase in net profit to HK$1.38 billion for the year to June 30,
boosted by sales profit of HK$320 million from 36 units at Garden Terrace in Mid-Levels.
Mr Chan expected rental business would be disappointing with rental income from
both office and residential properties expected to fall this year. The rental
income from retail properties was expected to post zero growth. Mr Chan said overall
rental income could fall modestly this year while the timing for launching sales
properties had yet to be finalised, adding that the company would not be in a
hurry to sell. A residential project at Hing Wah Street, West Kowloon Reclamation
could be released for sale in the first quarter of next year, he said, while the
remaining units at Garden Terrace were also available for sale. Amoy had sold
48 units at Garden Terrace, but only income from 36 units had been booked in the
past year's account. Mr Chan was not optimistic about the property sales market:
"The property market cannot be worse than at present, but it will not recover
soon because, since the last quarter of 1998, the economy has entered into a deflationary
era. Deflation is the biggest enemy of property. If inflation does not come, the
property market cannot be too good." He said the terrorist attacks in the United
States would deter inflation. Meanwhile, Hang Lung Development, parent of Amoy,
reported a 14.7 per cent drop in net profit to HK$744.5 million for the year to
June 30, mainly due to a 29 per cent increase in finance costs. Hotel arm Grand
Hotel Holdings reported a 54.9 per cent increase in net profit to HK$33 million
for the same period. Mr Chan said the higher finance costs for Hang Lung was a
result of construction projects, which reduced its cash on hand. He said Hang
Lung was still evaluating opportunities to develop a non-property business platform
and it would continue to pursue technology projects, saying it would be better
to see the technology market settle first. The company had delayed investing in
a new non-property project worth "tens of millions" of Hong Kong dollars due to
the US attacks, he said. Early last year, Hang Lung announced an ambitious plan
to spend HK$2 billion to diversify away from property development. Amoy proposed
distributing a final dividend of 29 HK cents per share, up from 26 HK cents for
last year. Hang Lung proposed a dividend of 32 HK cents, down from 40.5 HK cents
last year while Grand Hotel recommended 1.7 HK cents per A share and 0.17 HK cents
per B share. Mr Chan said Amoy had abandoned a fixed dividend payout-ratio policy
a year earlier to gain flexibility when the company became a developer instead
of a pure property investor. He said Grand Hotel did not intend to lay off staff,
while the Hang Lung Group would not rule out buying back shares. [Source:
SCMP, 25 September 2001] 2.
Authority endorses freeze on HOS sales
The Housing Authority yesterday endorsed the government's decision to suspend
the sale of the Home Ownership Scheme (HOS) flats until June next year and to
reduce supply to 9,000 units a year thereafter until March 2006. The authority
also agreed to provide 12,000 additional loans under the Home Purchase Loan Scheme
in two stages up to June 2002 to replace the reduction in HOS sales. The quota
will be split equally between Green Form _ public housing applicants _ and White
Form _ non-public housing applicants. Applications for the initial 6,000 loans
will be accepted beginning next month and the second batch in February 2002. About
8,000 HOS/Private Sector Participation Scheme (PSPS) units, mainly from projects
to be completed in 2002-03, will be converted into rental units. Priority would
be given to allocating the extra rental housing units to overcrowded families
currently living in public housing and to applicants on the waiting list to reduce
the waiting period.Estates which may be suitable for conversion to rental housing
are being identified and a report will be submitted to the Housing Authority's
Strategic Planning Committee for approval. Meanwhile, the authority will also
explore selling some units to the Urban Renewal Authority. [Source:
HK-iMail, 25 September 2001] |  |
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