CR Land seeks allies for Qianhai project

Developer sees no need to tap the debt market for funding after earnings rise

PUBLISHED : Saturday, 24 August, 2013, 12:00am
UPDATED : Saturday, 24 August, 2013, 4:23am

China Resources Land (CR Land), which paid 10.9 billion yuan (HK$13.7 billion) for a mega commercial site in the Qianhai special economic zone last week, said it will bring in strategic partners to jointly develop an upmarket office-hotel-serviced-apartment project.

"We are open to both Hong Kong and mainland companies," said chairman Wu Xiangdong.

Given that the land cost could be spread over three years, Wu said, there were no immediate plans to tap the debt market to raise funds. "There is no pressure on our financial position," he added.

Including the cost of land, analysts estimated the total investment in the Qianhai project, which could yield 503,000 square metres in gross floor area, at 21 billion yuan.

We are open to both Hong Kong and mainland companies

Yesterday, CR Land said net profit, including a HK$3.55 billion revaluation gain on investment properties, increased to HK$4.38 billion for the six months to June from HK$3.64 billion a year earlier. Turnover nearly doubled to HK$15.77 billion.

An interim dividend of 7.3 HK cents was announced, a rise of 15.87 per cent from the first half of last year.

Net profit margin for the period fell sharply to 27.8 per cent from 46.1 per cent, but it was still higher than 23.8 per cent for the whole of last year.

Wu said 50.59 billion yuan generated from residential property sales would be booked this year, 62.6 per cent higher than the whole of last year.

During the first half, CR Land acquired nine development sites with a total gross floor area of 3.99 million sqmetres for 20.43 billion yuan.

The group has expanded its geographical footprint to 45 cities, with its total land bank reaching 30.88 million sqmetres.

Meanwhile, Powerlong Real Estate chief executive Hoi Wa-fong said the developer would launch this year 14 residential projects, largely catering for end-users. He expects the company to achieve its annual sales target of eight billion yuan.

Powerlong yesterday reported core earnings rose 37.8 per cent to 543.3 million yuan for the six months to June on turnover of 3.47 billion yuan, up 24.1 per cent from a year earlier.

No interim dividend was announced.

Shares in CR Land edged 0.68 per cent higher to close at HK$22.30 yesterday, whereas Powerlong shed 1.33 per cent to HK$1.49. The benchmark Hang Seng Index eased 0.15 per cent.