Cheung Kong

Cheung Kong aims for record HK$40b homes sales this year

Company bucks trend by aiming for HK$40 billion from selling 5,200 flats in HK and 2,500 homes on the mainland as rivals scale back

PUBLISHED : Thursday, 07 March, 2013, 12:00am
UPDATED : Thursday, 07 March, 2013, 6:12am

Cheung Kong expects to bank between HK$35 billion and HK$40 billion from property sales in Hong Kong and the mainland this year, a record for the company.

Bucking the trend of its major rivals which are scaling back their sales targets, Cheung Kong said it would be making more than 5,200 Hong Kong flats and 2,500 mainland units available for sale this year, also a record high.

Analysts said Cheung Kong was adopting its regular strategy of pushing sales volume to secure earnings.

But Lee Wee Liat, the head of property research at BNP Paribas Securities (Asia), believes that the developer's aggressive sales plan could be an indication of its caution on the market outlook.

"Cheung Kong has always been the guy which focuses on asset churn. It sells whatever it has," Lee said.

"This is a good strategy if you think property prices are already at the top. You sell more to get volume to offset less upside in prices."

Justin Chiu Kwok-hung, an executive director at Cheung Kong, said the company had targeted HK$30 billion from property sales in Hong Kong, and between HK$8 billion and HK$10 billion from the mainland.

The company achieved property sales of HK$27 billion in Hong Kong and HK$3 billion on the mainland last year.

Last week, Sun Hung Kai Properties and New World Development lowered their sales targets for this financial year by 8.5 per cent and 20 per cent respectively, in anticipation of the government's cooling measures softening demand in the property market.

Chiu said more pre-sales consents would be approved by the government this year, compared with last year, and that would allow his company to sell more homes.

He said home prices could go up or down, but the range would be within 10 per cent this year.

Five projects will be sold in Hong Kong.

The first will be the 402-unit development in Kwok Shui Road, Tsuen Wan. In the first half, the company plans to pre-sell a 1,648-unit joint-venture project with Nan Fung Development, known as Lohas Park phase three.

Others include City Point at Tsuen Wan West MTR station, a small project in North Point and the Fung Yuen development in Tai Po.

Five projects in three mainland cities are planned for sale. They include 600 villas at the La Grande Ville development in Beijing and two projects in Guangzhou.

This year, Cheung Kong will sell its developments in Shanghai for the first time, including a 273-villa project in Jiading district and an apartment building containing 734 units in Putuo district.

Paul Louie, the regional head of property research at Nomura, said he was waiting to see how Cheung Kong set the price of its residential project in Kwok Shui Road.

Louie said the price premium between new and second-hand homes would continue to narrow as demand dropped.

Shih Wing-ching, the founder of Centaline Property, was quoted by Hong Kong Chinese media as saying that the Hong Kong housing market could see a big correction.

Shih said speculators and investors were being forced to leave the market.

He said and the doubling of stamp duty on all properties above HK$2 million announced last month was the "last straw that breaks the camel's back".