Kowloon Development expects an 11 per cent drop in rental income to about $236 million during the year to December as a result of rent cuts offered last year on its commercial properties. Chairman Ng Siu-chan said after the company's annual general meeting yesterday the reductions were made in light of the depressed market sentiment and poor economic outlook. Executive director Raymond Lau Siu-yin said the cuts were between 15 per cent and 35 per cent. He said rental income accounted for two-thirds of company revenue. Mr Ng said the market value of its long-term securities investment portfolio had dropped 27 per cent to $600 million from last year's $824 million. No provision for the fall in value would be made because the securities were being kept as a long-term investment. Mr Lau said the company had cash reserves of about $600 million and would be interested in buying investment properties given attractive prices. He said a supermarket had leased a 28,907 square foot commercial space at Sceneway Garden in Lam Tin. In February, the $300 million sale of the Sceneway Garden commercial property collapsed, with the buyer forfeiting a $60 million deposit. Mr Lau said the company would release a 40-unit development at Kung Lok Road in Kwun Tong for sale during the next two weeks. The project would raise about $250 million if all units were sold, he said. The company also planned to sell two cinemas in Sha Tin and renovate another two movie theatres at Pioneer Centre into retail shops due to them showing an operational loss, he said.