Lee plans 10b yuan push on mainland
Henderson Land Development, Hong Kong's third-largest developer by market value, plans to invest more than 10 billion yuan to double the size of its developable land bank in the mainland to more than 140 million square feet, chairman Lee Shau-kee said yesterday.
'We have built up a developable land bank of more than 70 million sqft in China, and the size will be doubled soon,' Mr Lee said.
Despite the central government's policy to crimp the property market, Henderson has been expanding in the mainland's middle-income housing markets.
In January, the company made its first foray into Suzhou's property market with the purchase of a 300,000 square metre site for 865 million yuan.
It also made land acquisitions in second-tier cities such as Changsha and Xian and is eyeing other cities such as Nanjing and Tianjin.
'We do not only invest in big cities such as Beijing and Shanghai but also in second-tier cities,' Mr Lee said.
Late last year the company also formed a 50-50 venture with Surbana Corp, a unit of Temasek Holdings, on a housing project in Xian, which will have a gross floor area of 16.5 million sq ft.
However, Mr Lee said the firm would develop most of the mainland projects on its own rather than through joint ventures.
He said the cost of doubling the size of its current land bank would be about seven billion yuan and would exceed 10 billion yuan if construction costs were included.
'It does not mean that we will pour in 10 billion yuan in cash,' Mr Lee said, adding that the company would use proceeds from pre-sales of mainland projects to invest in other developments.
The company would focus primarily on the residential market in view of the growing housing demand in the mainland.
Meanwhile, IFC Development - a joint venture between Henderson and Sun Hung Kai Properties - yesterday signed a HK$17.25 billion five-year syndicated term loan facility with a consortium of 33 international and local institutions.
The facility will be used for general corporate funding.
The interest margin is 37 basis points above the Hong Kong interbank offered rate.
