Hon Kwok Land sees sales rising to 1b yuan

PUBLISHED : Tuesday, 28 July, 2009, 12:00am
UPDATED : Tuesday, 28 July, 2009, 12:00am

Hon Kwok Land Investment expects its property contract sales to reach an 11-year high of more than one billion yuan (HK$1.13 billion) this year despite credit controls on second-home purchases.

Undaunted by the policy, which requires a 40 per cent down payment for second-home purchases, Hon Kwok will release 400 units for sale in the second phase of its Botanica residential development in Guangzhou in December.

'As the Guangzhou property market is dominated by end-users [generally first-time homebuyers], the mainland banking watchdog's re-enforcement of strict mortgage lending policies on second-home purchases has had a limited impact on the city,' said finance director Louis Pang Woon-chang.

He said the firm would offer the units at a suggested price of 10,000 yuan per square metre, the same as the average price in phase one of the development early this year.

It would reap about 460 million yuan if all units in phase two were sold, he said. Taking into account the HK$600 million in sales Hon Kwok achieved in the first six months, contract sales for this year would exceed one billion yuan, Mr Pang said.

The phase two development at Botanica is part of a 2,000-unit project that is expected to be completed in about 10 years.

Executive director Zuric Chan said the cost of its 1.5 million square metre land bank was low since the company bought it many years ago.

'We will not join the bidding war with rivals to buy land at unreasonably high levels,' Mr Chan said. He said the firm's land bank was enough for development for the next 10 years.

Construction of the grade A office tower and five-star hotel and serviced flat project in Chongqing would begin at the end of the year, he said.

The project, named Chongqing Hon Kwok Centre and with a total gross floor area of 134,000 square metres, will be completed in four years.

In Hong Kong, Hon Kwok plans to expand its serviced-flat and hotel chain under the Bauhinia brand.

Mr Chan said the chain would operate 428 hotel rooms and 235 serviced flats in Hong Kong, Shenzhen and Guangzhou this year.

Vice-chairman Herman Fung said the firm would buy buildings in Hong Kong and convert them into serviced flats and boutique hotels.