Completed 67,103 square feet of properties for sale Sold an attributable HK$5,423 million worth of properties in Hong Kong.

Transcription

1 Review of Operations Business in Hong Kong Property Development 2010 Highlights Completed 67,103 square feet of properties for sale Sold an attributable HK$5,423 million worth of properties in Hong Kong During the period under review, two luxury residential developments, namely Jade Suites in Jordan and La Verte in Fanling, were completed. Located at Canton Road, a famous shopping boulevard with many cultural attractions such as the jade bazaar and cinematheque in its proximity, Jade Suites is coveted for its location as well as its convenience as Austin and Jordan MTR stations, as well as the future Kowloon West Terminus of the Guangzhou- Shenzhen-Hong Kong Express Rail Link, are both within its walking distance. Atop three levels of commercial podium, a 22-storey residential tower has been built offering 62 boutique apartments to the privileged few and over 70% of the units have been sold since its launch in late Superbly located at Jockey Club Road, Fanling, La Verte contains 16 threestorey houses, complemented by a luxurious us clubhouse and car parking space in a tranquil and lush setting. Particulars of these newly completed projects are set out in greater detail on page 15 of the Chairman s Statement. Jade Suites, Jordan, Hong Kong Property Sales Driven by ample global liquidity as a result of the second round of quantitative easing by the United States, as well as relaxed monetary policies adopted by a number of European countries, the year under review began with the local property market continuing to ride on the cyclical upturn, whilst the positive land auction results repeatedly achieved during the year had further fuelled market sentiments. In order to curb excessive property speculation and enhance risk management of mortgage lending by local banks, the Hong Kong SAR Government announced a series of cooling measures such as lowering the Jade Suites, Jordan, Hong Kong (artist s impression) mortgage loan-to-value ratio and increasing stamp duty, as well as nine rules and twelve regulations which governed the transparency and fairness in pre-sales and show flats. New measures further introduced in mid-november 2010, including the levy of Special Stamp Duty of up to 15% on residential properties resold within two years from purchase and the temporary suspension of real estate from the permissible investment asset classes under the Capital Investment Entrant Scheme, were effective in combating short-term speculation. However, with strong fundamentals such as the prevailing low mortgage interest rates and the tight near-term housing supply outlook, the confidence of both endusers and investors is still intact with the transaction volume having picked up gradually. Property prices, as a result, have remained buoyant. 50

2 The reported transacted prices of some of the other developers luxury apartments and houses, as recently achieved in the primary or secondary market amid the heated market sentiment, are listed below: Properties of Other Developers Date of Sale Area (Approx.) (sq.ft.) Transacted price (Approx.) (HK$ Million) Average price per square foot (Approx.) (HK$) 37B Island Road 25/01/2011 7, ,883 37C Island Road 16/12/2010 7, ,143 House 8, Severn 8 14/03/2010 4, ,215 House 5, 36 Repulse Bay Road 08/10/2010 4, ,685 House 2, 74 Mount Kellett Road 16/08/2010 4, ,310 Penthouse A, Belgravia, South Bay Road 21/10/2010 3, ,741 36/F, The Albany 22/02/2010 6, ,488 51/F, Branksome Crest 22/03/2010 4, ,939 Some other cities in the Asia Pacific region, such as Singapore and Macau, have similarly experienced an influx of foreign capital and keen buying response from local buyers and they have separately rolled out cooling measures during the year so as to rein in the soaring property prices. The Group was active during the year in promoting the sale of a number of residential developments including the project at Headland Road in Island South, Légende Royale - The Beverly Hills (Phase 3) in Tai Po, Hill Paramount in Shatin, Green Lodge in Yuen Long and Jade Suites in Jordan with satisfactory response from buyers. Some popular residential projects such as 39 Conduit Road, The Beverly Hills (Phase 1), 8 Royal Green, The Sparkle, Cité 33, Grand Waterfront and Grand Promenade were also re-launched for sale. Altogether, a total of 572,507 square feet in attributable gross Hill Paramount, Shatin, Hong Kong Annual Report

3 floor area of residential properties were sold. Together with the disposal of approximately 96,410 square feet of industrial/office space, the Group sold an attributable HK$5,423 million worth of properties in Hong Kong for the year ended 31 December 2010 (before taking into account the effect of cancelled sales, including those of the 20 units at 39 Conduit Road, as referred to below). For the 18-month period ended 31 December 2009, the turnover and profit after taxation in respect of the sale of 25 units at 39 Conduit Road, a luxury property development in which the Group has a 60% interest, were recognized in accordance with accounting policies of the Group consistently applied and which are in line with accounting principles generally accepted in Hong Kong. Among these units, completion of the sale and purchase of four units took place in mid-june 2010 and the Group received in full the amounts of purchase price receivable, together with about HK$11 million as interest for delayed completion. There was no reduction in purchase price, nor the provision of finance for those four units. Written requests were received from the respective purchasers for the cancellation of the sale and purchase agreements for the other 20 units. In accordance with the terms of the standard form of sale and purchase agreement under the Consent Scheme administered by the Government relating to pre-sale of residential units in uncompleted developments, the Group agreed to cancel the sale and purchase in respect of these 20 units and forfeited the deposit of 5% of the purchase price with the rest of the payments refunded to the purchasers. A loss of approximately HK$734 million attributable to the Group was recorded as a result of the cancellation of the sale of these 20 units. The Group agreed to cancel the sale and purchase of these units so as to avoid protracted and costly legal proceedings to claim against the original purchasers and enable the Group to offer them for sale again immediately if it so wished. It has to be pointed out that property prices depend mainly on the supply and demand at a particular point in time, in much the same way as the price for a commodity is fixed. In the case of properties, additional Légende Royale, Tai Po, Hong Kong 52 Annual Report 2010

4 11-12 Headland Road, Island South, Hong Kong considerations, such as the location of the property, the quality of the design, material and finish, and the facilities provided, would have a great impact on their pricing. Other factors that have a bearing are the low interest rate environment and inflation expectations which would prompt investors to acquire properties for investment or as a hedge against inflation. The sale of the 24 units in 39 Conduit Road was normal bona fide transactions legally conducted with unrelated parties at arm s length. It is regrettable, however, that such sale became the subject of unjustified and incorrect criticisms which could have been prompted by high property prices. As evidence of the quality of 39 Conduit Road, a semi-duplex apartment (unit B on Level 61) was sold during the year at the price of HK$60,000 per square foot, a 39 Conduit Road, Mid-Levels, Hong Kong record price for luxury apartments. Further evidence of the quality of the Group s developments can be found at 11 and 12A Headland Road, where two houses with gross floor area of 13,033 square feet and 10,093 square feet respectively were sold during the year at a price of HK$50,641 and HK$47,360 respectively per square foot. As mentioned above, high prices were also repeatedly achieved by other luxury developments. At 31 December 2010, the Group had over 760 residential units available for sale, comprising a total gross area of over 1.8 million square feet, of which around 1.7 million square feet was attributable to the Group. Particulars of the major development projects offered for sale and pending sale or pre-sale are shown on pages 16 and 17 of the Chairman s Statement. Annual Report

5 Status of Major Property Developments 388 Jaffe Road, Wanchai (100% owned) Site area : 4,408 square feet Gross floor area : 66,130 square feet Expected completion : End of 2011 Wanchai has become a popular destination for conventions and exhibitions, bringing an increasing number of upscale business and leisure travellers to that district. In order to meet their demand, a boutique hotel is now under development and The Mira Hong Kong, a leading fashionable hotel in Hong Kong, will assume its management upon its scheduled opening in the third quarter of Lee Chung Street, Chai Wan (100% owned) Site area : 11,590 square feet Gross floor area : 173,839 square feet Expected completion : April 2012 On a prime site close to an MTR terminus, a premium office tower is now under construction. Upon completion, it will feature advanced facilities, fine architecture and eco-friendly design concepts to appeal to discerning users and reinvigorate the district of Chai Wan. The Gloucester, 212 Gloucester Road, Wanchai (100% owned) Site area : 11,545 square feet Gross floor area : 113,977 square feet Residential units : 177 Expected completion : Fourth quarter of 2012 The Gloucester is located on the prime Wanchai waterfront area, with panoramic sea views stretching from the Central to Kowloon Peninsula. This prestigious luxury residence is near an MTR station, trendy nightspots, top restaurants and stylish new entertainment venues. The development s facilities and design are meant to cater to urban elites who lead a modern lifestyle. Construction has proceeded to the superstructure stage and completion is expected by the end of STTL 502 at Lok Wo Sha, Wu Kai Sha, Ma On Shan Phase 1 (56.75% owned) Site area : 479,804 square feet Gross floor area : 772,253 square feet Residential units : 928 Expected completion : Fourth quarter of 2012 Adjacent to Ma On Shan MTR terminus, this high-end waterfront residential development will be completed in phases and construction for its first phase of development, which contains a total residential gross floor area of about 677,000 square feet and a shopping area of about 96,000 square feet, has already commenced. Rogers Stirk Harbour + Partners, the Concept Architect of the development, has been refining the overall planning and is introducing innovative architectural design ideas to its first residential project in Hong Kong. The sweeping panoramas of Tolo Harbour and the stylish architecture are designed to offer residents an exclusive, tranquil living environment surrounded by greenery and natural beauty spots such as Starfish Bay and To Tau Beach. 54 Annual Report 2010

6 Lot 5369 and other lots in DD 116, Tai Tong, Yuen Long (To be known as Yuen Long Town Lot 526) (79.03% owned) Site area : 371,630 square feet Gross floor area : 1,300,705 square feet Residential units : 2,582 Expected completion : End of 2012 The land exchange for Lot 5369, with a site area of approximately 336,000 square feet and a residential gross floor area of 1,175,000 square feet, was completed in April 2010 with the land premium fully settled. The land exchange for this lot, together with adjacent pieces of agricultural lots, which will then be jointly known as Yuen Long Town Lot 526, is currently in progress. Land premium is being assessed by Lands Department. The proposed development at Yuen Long Town Lot 526 will comprise twelve 25-storey residential towers, a residents clubhouse and a basement carpark, providing about 2,582 residential units, with a total gross floor area of 1,300,705 square feet in a green and relaxing environment. Foundation work is in progress. AZURA, 2A Seymour Road, Mid-Levels West (12.5% owned) Site area : 22,957 square feet Gross floor area : 206,306 square feet Residential Units : 126 Expected completion : Fourth quarter of 2012 In the highly sought-after Mid-Levels West area, AZURA offers a sanctuary from busy city life, yet remains within easy reach of Central commercial business district and Soho s cultural and entertainment neighbourhood. Superstructure is in progress and its wing-like architectural design of the building offers a high level of privacy while maximising the city and harbour views for all units Boundary Street, Kowloon (100% owned) Site area : 6,750 square feet Gross floor area : 57,498 square feet Residential Units : 41 Expected completion : Second quarter of 2014 At the site of the former Newton Hotel Kowloon, which is close to both Prince Edward and Mongkok East MTR stations, a premium residential tower will be built amid lush and green surroundings. The flower bazaar and Mongkok shopping avenue are both within walking distance, offering unparalleled convenience to its residents. The development will have a modern, elegant exterior with luxury materials and clubhouse facilities and is poised to become a new benchmark for luxury living in the neighbourhood Po Tuck Street and 36 Clarence Terrace, Hong Kong (100% owned) Site area : 7,310 square feet Gross floor area : 61,103 square feet Residential Units : 140 Expected completion : Second quarter of 2014 Adjacent to the Hong Kong University station of the MTR West Island Line, which is scheduled to commence its operation in 2014, this development is poised to provide easy access for its residents to every part of the city upon its scheduled completion in Also, it is close to a number of prestigious primary and secondary schools, as well as the University of Hong Kong which is one of the top higher education institutions in the world. Annual Report

7 Review of Operations Business in Hong Kong Major Development Projects Major Projects Under Development Jaffe Road, Wanchai 2 24 Lee Chung Street, Chai Wan 3 The Gloucester, 212 Gloucester Road, Wanchai 4 Lok Wo Sha, Wu Kai Sha, Shatin 5 Lot 5369, DD 116 at Tai Tong Road, Yuen Long 6 AZURA, 2A Seymour Road, Mid-Levels West Boundary Street Po Tuck Street and 36 Clarence Terrace Major Completed Development Projects Offered for Sale or Pending Sale 9 Casa Marina I, 28 Lo Fai Road, Tai Po 10 Casa Marina II, 1 Lo Ping Road, Tai Po 11 The Beverly Hills Phase 1, 23 Sam Mun Tsai Road, Tai Po 12 The Sparkle, 500 Tung Chau Street, Cheung Sha Wan 13 8 Royal Green, 8 Ching Hiu Road, Sheung Shui Conduit Road, Mid-Levels 15 Hill Paramount, 18 Hin Tai Street, Shatin 16 Green Lodge, Tong Yan San Tsuen, Yuen Long 17 Légende Royale, The Beverly Hills - Phase 3, 23 Sam Mun Tsai Road, Tai Po 18 11,12,12A,12B Headland Road, Island South 19 Jade Suites, 600 Canton Road, Jordan 20 La Verte, 283 Jockey Club Road, Fanling Tuen Mun Airport Existing Line MTR Tung Chung Cable Car Light Rail Route 3 Cross Harbour Tunnel Tung Chung Lantau Island Under Construction West Island Line Guangzhou - Shenzhen - Hong Kong Express Rail Link Under Planning North Hong Kong Island Line Northern Link Shatin to Central Link South Island Line (East & West) Residential / Hotel Serviced Suites Commerical / Residential Office 56 Annual Report 2010

8 Review of Operations Business in Hong Kong Major Development Projects 13 Sheung Shui Lok Ma Chau 20 Fanling Tai Po Yuen Long 5 16 New Territories 4 Sai Kung Ma On Shan Tsuen Wan Shatin 15 Tsing Yi 12 7 Kowloon Discovery Bay 19 Tseung Kwan O Quarry Bay Hong Kong Island 2 18 Annual Report