Japanese developers will continue with expansion plans in Hong Kong despite tightening credit conditions and a severe property correction, says the Japanese company Ever Gain. Managing director Motoyuki Kodera said companies undoubtedly were facing difficulties obtaining financing from banks, but he believed the problem would not last long. 'Bankers also need to generate business by lending money; the situation will be improved later in the year,' he said. Mr Kodera was speaking after the topping-out ceremony for the company's $3 billion joint-venture industrial-office development Ever Gain Plaza in Kwai Fong. Ever Gain owns 30 per cent of the building, while Nissho Iwai Corp and Itochu Corp each hold 35 per cent. Japanese Consul-General Kunihiko Makita yesterday also rejected claims that Japanese investors and financial institutions were pulling out of Hong Kong. He said Japanese banks had become more conservative in their lending, as had European and SAR banks. 'It is the global economic trend,' Mr Makita said. Mr Kodera said that, given the credit-squeeze conditions, the company planned to generate its cash flow from the part sale of Ever Gain Plaza to finance future property developments. The developer would retain about half of the space for lease at a rate of about $15-$18 per square foot. The sale of half of the project's floor area was expected to generate about $2 billion. Mr Kodera said that about 30 per cent of the $3 billion investment in Ever Gain Plaza had been borrowed from banks, and the balance was financed by the company and shareholders' internal resources. Mr Kodera said: 'There is no need to worry as the market always moves up and down.' The company was confident about Hong Kong's property market and was interested in expanding into the commercial sector in the future, he said. Commercial property prices are reported to have fallen more than 40 per cent since they peaked in the middle of last year. Ever Gain has four industrial-office buildings - one in Tsuen Wan and three in Sha Tin. Ever Gain general manager Yvonne Lau said seven floors of Ever Gain Plaza's Tower One had sold for $3,500 per sq ft, adding the sale of four more floors had reached the final stage of negotiations. Most buyers were Japanese shipping companies which were relocating their operations to Kwai Fong ahead of the opening of the airport at Chek Lap Kok, she said. The twin-tower building, providing one million sq ft of gross floor area, is scheduled to be completed in the third quarter of the year. Tower Two would be launched for sale next month, she said.