Hysan steps up Happy Valley apartment sales

PUBLISHED : Friday, 14 August, 1998, 12:00am
UPDATED : Friday, 14 August, 1998, 12:00am

Hysan Development yesterday announced plans to sell nine units at its Broadwood Park in Happy Valley through property agents.

Analysts said the proposed sale had been expected as part of the property investment company's attempts to raise cash and reduce debt and interest expenses.

Hysan has appointed Centaline Property Agency and FPD Realty to sell the units but the price was not revealed.

DBS property analyst Winnie Chiu said the firm's debt had increased significantly since its acquisition of the Entertainment Building in Central. The disposal of non-core assets was an alternative to raising cash.

She expected the selling price to be about $6,000 per square foot, which would raise about $156 million if all units were sold.

The 33-storey Broadwood Park has 62 units, measuring more than 2,900 sq ft each.

Six units were sold for more than $100 million early this year and the company said then it would continue to sell units once individual tenancy agreements expired.

According to the firm's annual report for last year, Hysan's short-term borrowings - repayable within a year - were $3.92 billion. This was sharply up from $22 million a year earlier.

Borrowings at December 31 last year reached $9.83 billion, 112 per cent higher than $4.62 billion a year ago. The company's debt-to-equity ratio was 19.6 per cent then.

Vickers Ballas analyst Herbert Lau said the asset sales would boost the firm's earnings as its rental income would be affected by the severe property market correction and weak economy.

He said the firm might need to make further provisions to cover the fall in the value of its securities investments.

Hysan reported a $280.8 million one-off provision on the fall in value of its share investment portfolio last year which resulted in a 12.6 per cent drop in profit to $1.17 billion.