Hang Lung Properties expects rental income to increase by at least 25 per cent to more than $1 billion next year, brushing aside concerns that it will be affected by the government's new policy to curb capital inflows in the property market.
Chairman Ronnie Chan Chi-chung said the company's rental income was about $800 million now and the expected increase next year would enable it to participate in many projects.
'The rents at our Hong Kong investment properties have been rising by a single digit while we expect the rental level of Shanghai's investment properties will continue to rise by double digits for the next three to four years,' he said.
'Even though rental growth in Shanghai's investment properties will slow three to four years later, new projects in Shenyang and Jinan will be completed and provide rental income at that time.'
The developer plans to invest $6 billion to $7 billion in three or four projects in Chinese cities, mainly shopping malls. It plans to invest $25 billion by 2008 in 10 projects in Chinese cities outside Shanghai.
Mr Chan said the six measures announced by Beijing to cool the property market would have no impact on Hang Lung as they were aimed at the residential sector while its focus was commercial.
The developer secured $6 billion of revolving credit facility with 16 banks yesterday, more than the initially planned $5 billion. The five-year facility carries an annual interest rate of 23 basis points more than the Hong Kong interbank offered rate.
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