Henderson to make use of huge farm land bank
Henderson Land Development, which yesterday reported a record full-year net profit, plans to convert its agricultural land bank over the next few years to provide about three million square feet of gross floor area each year.
The company said it would also enhance its investment property value and capture higher rental yield by refurbishing its major retail shopping properties including Sha Tin Plaza, the Trend Plaza in Tuen Mun and the Metro City Plaza in Tseung Kwan O.
'As supply of high-grade office space is expected to remain tight, the shopping mall and the office towers of International Finance Centre are anticipated to continue to see significant rental growth,' said chairman Lee Shau-kee.
He added that other rental contribution would come from the newly completed Four Seasons Hotel and the Four Seasons Place, part of the International Finance Centre development.
Mr Lee said Henderson was continuing negotiations with the government for conversion of its farm land sites totalling 26.8 million sq ft and on fixing the land premium.
The landholdings include the Wu Kai Sha site with a total gross floor area of 3.5 million sq ft as well as several other large farm lots.
The company, which acquired 4.3 million sq ft of farm land during the year under review, says its agricultural holdings are the largest among Hong Kong developers.
Henderson has a total non-farm land bank with 17.5 million sq ft in gross floor area in Hong Kong. It also plans to develop a waterfront site of 1.45 million sq ft in Macau.
With a number of development plans, the company said its future development expenditure approved but not contracted for amounted to $4.86 billion.
Its gearing ratio was 17.8 per cent as of June 30.
The company posted a 75.81 per cent rise in net profit to $10.85 billion for the year to June. The figure reflected gains from the revaluation of its investment properties.
Excluding such gains, the company saw a 43 per cent rise in net profit to $4.37 billion. Earnings per share were $5.98 each, against $3.46 each in the preceding year.
Directors declared a final dividend of six cents per share, bringing the full-year dividend to $1 per share, up 11 per cent from the previous year.
During the year under review, the company sold about 3,300 flats, reaping sales revenue of $6.81 billion. The projects include the Grand Promenade, Royal Peninsula, Splendid Place, King's Park Hill and Phase Two of the Metro Harbour View.
Henderson Land's profits from property leasing rose to $1.31 billion from $1.2 billion. The total attributable gross floor area of the company's rental property portfolio was 8 million sq ft, excluding car parking space of about 2.5 million sq ft.
Hotel operations profit rose 22 per cent to about $55 million.
Henderson Land shares fell 0.13 per cent to $38.25 yesterday.
Meanwhile, 73.48 per cent-owned Henderson Investment posted a 64.5 per cent rise in net profit to $3.5 billion, reflecting the gains of investment property revaluations. Excluding the revaluation gains, it posted a 22 per cent rise to $2.21 billion.
Henderson China Holdings, which was privatised by Henderson Land last month, posted a net loss of $103 million due mainly to the loss of about $70 million resulting from the revalution of investment properties.