Kerry eyes more land purchases after gain

PUBLISHED : Thursday, 25 August, 2011, 12:00am
UPDATED : Thursday, 25 August, 2011, 12:00am


Kerry Properties said yesterday it had amassed a war chest of more than HK$29 billion for land purchases as it announced a 52 per cent jump in underlying profit for the first half.

The Hong Kong-based builder reported core earnings of HK$2.76 billion between January and June, compared to HK$1.81 billion during the same period last year.

Net profit rose 12 per cent to HK$3.07 billion, after taking into account gains on revalued investment properties and the related tax impact. Turnover declined 20 per cent to HK$9.31 billion due to the timing of revenue recognition.

The pre-sale of Lions Rise in Wong Tai Sin, due to be completed in late 2011, and Soho189 in Sheung Wan, expected to be finished in 2013, will be booked upon project completion.

The Hong Kong-listed company declared an interim dividend of 40 cents, up 14 per cent from 35 cents a year earlier.

Kerry chief financial officer Louis Wong said the firm had a strong balance sheet with HK$18.5 billion net cash and bank balances, and nearly HK$11 billion in undrawn bank loans.

'We have sufficient resources to fund our future land acquisitions,' Wong said after the firm's interim results announcement.

The company yesterday also expressed interest in bidding at the tender sale tomorrow of the MTR Corporation's prime Nam Cheong station property. The rail company was set to sell the property last year, but withdrew it after a high land premium kept most bidders away.

The 667,368 square foot site is expected to house 14 residential towers with a total of 3,313 flats. The project would provide a total residential floor area of 2.64 million square feet and have an estimated valuation of HK$21 billion to HK$23.7 billion.

This month, Kerry teamed up with Sino Group and Manhattan Group to buy a luxury residential site in Kau To in Sha Tin for its opening bid of HK$5.5 billion at the government land auction.

Meanwhile, Kerry president and chief executive Wong Siu-kong said extended restrictions on the number of home purchases in second- and third-tier cities would stall property sales on the mainland. Some 35 municipalities have introduced measures to restrict registered residents from buying more than two flats.

'It is too early to access the impact on the market,' Wong said. 'In response to the policy change, we will review and adjust our sales strategy in different cities.'

Kerry Properties is part of the Kerry Group, the controlling shareholder of the SCMP Group, publisher of the South China Morning Post.