• Thu
  • Dec 18, 2014
  • Updated: 7:28pm

Lippo budgets HK$10b for mainland holdings

PUBLISHED : Wednesday, 17 October, 2007, 12:00am
UPDATED : Wednesday, 17 October, 2007, 12:00am

Lippo, the Indonesian-backed Hong Kong-listed conglomerate, said yesterday it would invest up to HK$10 billion over the next three years to develop property and retail holdings in the mainland, while continuing to offload non-core assets.

Managing director John Lee Luen-wai said the company aimed to generate 70 per cent of revenue from the mainland within a decade, compared with about 10 per cent now, as it narrowed its sprawling focus on to property and retail in the region.

Mr Lee said that in the next five years it aimed to open 18 medium to high-end department stores of at least 30,000 square metres gross floor area under the brand Robbinz in second-tier Chinese cities, such as Suzhou and Xuzhou.

Its first department store in the mainland will open in Tianjin on November 1.

'Competition [in the retail sector] in the mainland's top cities has already been quite fierce, so our strategy is to open department stores in prime locations of second-tier cities which have development potential,' Mr Lee said.

For the Tianjin venue - which at a gross floor area of 98,000 sq metres is one of the largest retail complexes in the city - the company has secured a 20-year lease.

Lippo expected to open another department store in Chengdu, the capital of Sichuan province, by year-end, and then three more venues next year, Mr Lee said.

The company aims to generate half of its property turnover from rental income within three years from about 20 per cent now.

Chief financial controller David Ng Tai-chiu said the company would hit the target by upgrading its property portfolio to enhance rental yields, such as the ongoing renovation in the basement of Meritus Mandarin in Singapore, and developing high-potential projects.

Mr Lee expected rental income to reach HK$600 million to HK$700 million from Singapore, Hong Kong and the mainland by 2010.

The company owns two million sq metres of land bank in the mainland.

In the first half to June, its net profit jumped 469 per cent to HK$473.7 million, boosted by one-off gains. Revenue for the six months was up 6 per cent at HK$910 million.

In June, the company disposed of its entire interest in a joint venture that held 22 storeys in a Singapore commercial building for a gain of HK$102 million.

Lippo will continue to dispose of unspecified non-core businesses and use bank loans to finance its expansion of mainland business. Bank loans account for less than 40 per cent of total capital expenditure.

Lippo shares fell 0.32 per cent to close at HK$6.20 yesterday.

Share

For unlimited access to:

SCMP.com SCMP Tablet Edition SCMP Mobile Edition 10-year news archive
 
 

 

 
 
 
 
 

Login

SCMP.com Account

or