The business environment for companies in Hong Kong is deteriorating, says Wheelock and Co chairman Peter Woo Kwong-ching. His remarks came against a backdrop of tighter property regulations, rising operating costs and changing political conditions.
In his discussions with friends and colleagues, Woo said he found "their general feelings are that the business environment is worse than before".
Speaking after the general meeting of Wheelock, Woo said the outlook for the property market might take six to 18 months to see a clearer picture amid the uncertain land supply timetable and tighter regulations.
The measures included a 15 per cent tax on non-local and corporate property buyers, the doubling of stamp duties on residential and non residential transactions, and new rules on sales of new flats.
In the wake of the measures, Woo said industry players had been facing difficulties.
"It is difficult to predict when the conditions will improve and it probably needs six to 18 months," he said.
Woo also highlighted the problem of rising construction costs. "Construction cost was about HK$2,000 per square foot five or six years ago but rose to HK$3,500 by the end of last year," he said.
He cited the company's acquisition of a site in Tseung Kwan O as an example. In January, Wheelock won the site for HK$1.86 billion, or HK$3,810 per square foot in terms of gross floor area. The construction cost now is comparable to land cost, according to Woo, hinting that rising labour cost is a factor.
"We do not want to import foreign labour. Otherwise, it will spark off political issues," he said.
Wheelock has two other sites in Tseung Kwan O, won in government tenders at HK$4,580 and HK$4,301 per square foot, respectively.
Woo also said his son Douglas Woo Chun-kuen would start taking more responsibilities to ensure the group's transition.
"I was given the opportunity by [the late shipping magnate] Pao Yue-kong 30 years ago when I was 36 years old. I think it is the right time to give [Douglas] the opportunity," he said.
On June 2, Wheelock announced Douglas Woo would become a director and managing director from July 1.
Douglas Woo, 35, is the managing director of Wheelock's wholly owned property arm, Wheelock Properties.