Competitive rents make Hysan a good prospect
HYSAN Development is a property investment company with a strong presence in Causeway Bay.
South China Brokerage believes that Hysan will have promising earnings growth over the coming years and recommends a buy.
The current average rentals for Hysan's office and retail properties are $28.54 per square foot and $47.57 per square foot respectively, well below the current market rates of $42 per square foot and $72 per square foot in Causeway Bay.
The impact, therefore, of a possible further slide of up to 20 per cent in property rentals on Hysan would not be substantial.
The group's rental income growth over the next few years is backed by the completion of Lee Theatre Plaza in 1995 and Lee Gardens redevelopment in 1997.
Earnings for financial year 1996 are expected to be boosted by the first full-year rental contribution from Lee Theatre Plaza.
Income for the 1997 financial year will be fuelled by the first year contribution from The Lee Gardens Development.
Its A-minus credit rating, issued by Standard & Poor's, will help Hysan obtain cheaper funds for future investments, including the development along the airport railway and diversification into telecommunications.