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SCMP Reporter

Hongkong China says it has no plans to sell any office floors in its Lippo Centre in Admiralty despite near-record office prices.

 'I don't see us selling much of Lippo Centre,' director Jonathan Foxall said.

   'The rental return is okay. We will trade when the opportunities are right.

  'This is our head office and we are making very good money out of this building so we don't need to sell.'    Office prices in Central have increased by as much as 50 per cent in the last five months to about HK$19,000 per square foot.

  Hongkong China, which is well known as a property trader, owns 12 office floors and the podium in Lippo Centre.

  Mr Foxall said that the company has received numerous purchase offers for space in the Lippo Centre but had turned them down.

  The company put the 34th floor of the Lippo Tower on the market last year but withdrew it when prices picked up.

  'We made the right choice,' Mr Foxall said.

   'At some point we might reconsider [selling] but we have no plans in the immediate future.'   Mr Foxall said the company, the local property arm of the Indonesian conglomerate Lippo Group, was actively looking to buy vacant sites and would consider an older building which it could redevelop.

  'Unless the pricing was particularly attractive, we would rather buy a site and have the flexibility to redevelop. We see a lot of upside to that,' he said.

  Mr Foxall said the company was going through an evolution and was more focused on Hong Kong than in the past.

  'We are getting away from flipping buildings,' he said. 'I guess it is sort of an evolution. It is partly because of the market situation.'   According to Mr Foxall, the commercial market today is fundamentally different than in 1994 during the last speculative boom, when prices for office space hit $22,000 per sq ft.

  'The opportunities are not the same and I think that we will have to wait for opportunities to come again,' he said.

  'When the market is in a downturn we will and should look to buy a whole building and then sell it.

   'We haven't lost the trading mentality but the opportunities are rarely there these days.'   As part of its evolution, Hongkong China was recently involved in a deal whereby the company took control of all of Lippo's Hong Kong and China property developments.

  'It was meant to rationalise really,' said Mr Foxall. 'It is a more efficient way of doing things.'   According to Mr Foxall, Hongkong China has the capital resources to get involved in the property market in a big way.

  In November, for instance, the company was part of a consortium which won the $9 billion contract for the second phase of the Tung Chung airport development.

   Mr Foxall said: 'We are part of Tung Chung 2. We successfully tendered for that site. We have a stake here and a stake in there.' 



Lippo arm to retain flagship stake