Hang Lung expansion strategy stays on track
Hang Lung Properties will continue to expand on the mainland despite disappointing economic growth in the first quarter, said chairman Ronnie Chan Chi-chung.
In the face of slowing growth worldwide, the mainland's economic prospects in the next five to 10 years were still good, Chan said after the annual general meetings of Hang Lung Properties and its parent firm Hang Lung Group.
"Why don't I go to Europe? Because it is difficult to see economic growth [there]. It may even see negative growth," he said.
The mainland's gross domestic product grew 7.7 per cent in the first quarter, down from 7.9 per cent in the last quarter of last year, according to official data released this week.
Chan said the firm's investment on the mainland was a long-term strategy. It has 10 major developments in eight big cities including Shanghai, Shenyang, Wuxi and Kunming.
In February, the company won a prime commercial site in Wuhan, which will entail an investment of 12 billion yuan (HK$15 billion).
Last year, its mainland leasing operations earned HK$3.53 billion, up 17 per cent from 2011.
Chan said Hong Kong's property market was undergoing a natural slowdown rather than a reversal.
The government's cooling policy was good for the city's economy in the long run, he said, adding the measures had just started to bite.
On when the government would ease the curbs to check home prices, Chan said it would be better to wait until the new stock of supply came on stream.
He said the company was in no rush to clear its remaining 1,400 units before the new law on floor area comes into effect this month. From April 29, sales brochures for all new projects will have to specify the size of flats in terms of "saleable floor area".
Saleable area refers to the actual usable space in a flat, net of the so-called "common areas" such as lift lobbies. Breaching the new law could result in fines of HK$5 million or up to seven years' in jail.