Kerry land bank set to keep growing on mainland
Kerry Properties said yesterday it would continue to boost its land bank for high-end developments in the mainland's top-tier cities after the launch next year of its mega project in Shanghai's Jingan Temple area.
Kerry Properties, the Hong Kong-listed builder of high-end properties, and Cheung Kong (Holdings) both have shown confidence in the mainland real estate sector, particularly Shanghai, despite concerns about overbuilding in some areas.
'We always have a plan when opportunities arise,' said William Chan Wai-ming, an executive director of Kerry Properties. 'We are taking a very long-term view.'
Kerry is expected to next year launch its mixed-use development, Jing An Kerry Centre, a 450,000 square metre project in the heart of Shanghai's downtown area, the company said yesterday.
The development includes grade A offices, a Shangri-La hotel, serviced apartments and commercial properties, giving Kerry a new growth engine as it further profits from the mainland's expansion.
Kerry would not comment on progress in signing up tenants, but it did say that multinational companies in the fields of fashion, creative industries, consultancy and pharmaceuticals would be attracted to the new offices.
Shanghai Ji Xiang Properties, a joint venture between Kerry Properties and Shangri-La (Asia), developed the Jing An Kerry centre.
The Jing An Shangri-La hotel, with 508 rooms, will also be the fourth outlet in Shanghai bearing the luxury hotel brand's name.
Brushing aside concerns about a potential oversupply in Shanghai's hospitality sector, Chan, who is also general manager of Ji Xiang Properties, said: 'We want to finish it as soon as possible.'
Following the World Expo last year, Shanghai's hotel market is facing lower occupancy rates amid an increasing number of rooms. Big international brands will add 12,000 rooms on top of the existing 40,000 by 2013, according to real estate consultancy Jones Lang LaSalle.
'Cyclical characteristics are always there,' said Chan. 'Over the long term, we don't think the impact is prominent.'
Kerry was echoing the view of Cheung Kong, which said last month that it would seek more lucrative projects in the mainland's first-tier cities after unveiling the names of its three new projects in Shanghai in July. These included a landmark, mixed-use development in the city's western Putuo district that has 1.14 million square metres.
Beijing has stepped up efforts to cool the red-hot real estate market, extending home purchase restrictions in second- and third-tier cities.
Kerry chief executive Wong Siu-kong said last month that it would review and adjust its sales strategy in cities to adapt to the policy changes.
Kerry Properties, part of the Kerry Group which is also the controlling shareholder of SCMP Group, publisher of the South China Morning Post, said it had more than HK$29 billion for land purchases after reporting a 52 per cent increase in underlying profit for the first half.