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Kerry unveils $2.7b Quarry Bay project

PUBLISHED : Saturday, 25 March, 2006, 12:00am
UPDATED : Saturday, 25 March, 2006, 12:00am

Hong Kong Tobacco headquarters makes way for office tower

Kerry Properties will redevelop an industrial block in Quarry Bay into an office tower, at a cost of at least $2.7 billion.

The company recently bought the 450,000 square foot headquarters of Hong Kong Tobacco from the family of Charles Ho Tsu-kwok, a tobacco tycoon who owns the Sing Tao Group.

Kerry Properties executive director Steven Ho Shut-kan yesterday declined to give a breakdown of the land price and construction cost, but he said: 'Total development cost for the building will be not less than $2.7 billion.'

The completed office tower will provide a total floor area of 550,000 sqft.

'We will hold it for long-term investment,' Mr Ho said.

The investment was in line with the company's plan to build up its office property portfolio in areas with good access to mass transport, he said.

The plan was unveiled yesterday when the company announced a 35.03 per cent increase in net profit to $3.06 billion for the year to December.

The bottom line included a gain of $1.3 billion arising from the revaluation of investment properties.

Taking out the revaluation gain from investment properties, the company saw an 11.32 per cent increase in net profit to $1.75 billion.

Earnings per share were $2.53, up 33.15 per cent. Directors declared a final dividend of 50 cents per share, with a scrip dividend alternative. Full year dividend is 70 cents per share.

Kerry Properties is controlled by the Kuok Group, which is also the largest shareholder of the SCMP Group.

During the year, net profit from the mainland dropped 32.1 per cent to $372 million from $548 million in 2004.

Deputy chairman Wong Siu-kong said the decline was partly a result of the central government's austerity measures on the property sector but he expected the market to improve this year.

In Hong Kong, net profit rose 20.38 per cent to $1.42 billion.

This year, the company will sell 140,000 square feet of space in Enterprise Square Three, and 155,000 sqft in its residential project in Ho Man Tin.

About 70 units of Tregunter Towers in Mid-Levels are available for sale.

Mr Ho expected sales income this year would exceed last year.

The company said it would announce more details of its Macau property project in the coming months.