The group's Hennessy Centre is due for a hefty facelift as confidence returns Hysan Development is considering a $1.2 billion facelift for the Hennessy Centre in Causeway Bay as part of its drive to draw quality tenants. Hysan, a major landlord of grade-A office and retail property in Causeway Bay, has already begun boosting the value of its retail property portfolio as demand for high-quality space is expected to surge in the wake of improved domestic consumption and tourism. Hysan was studying plans to upgrade the 700,000 square foot retail-office centre, on Hennessy Road, after its recent refurbishment of the Caroline Centre, also in Causeway Bay, BNP Paribas Peregrine analyst Adrian Ngan said. 'The options include a major remodelling and en bloc redevelopment that would cost $600 million and $1.2 billion, respectively,' Mr Ngan said. 'It is also expected that an additional 80,000 to 100,000 sqft of unused gross floor area can be included in the development plan, which would be finalised in mid-2004.' Hysan declined to confirm the $1.2 billion facelift plan but a spokeswoman said the company had a continuing proposal to review the possibility of enhancing its assets through capital expenditure. The Hennessy Centre was one of the projects to be reviewed by the group, she said. Analysts said Hysan was targeting the redevelopment or refurbishment of at least one property a year for the next four to five years. Hysan recently completed the remodelling of the Caroline Centre, a 34-storey retail-office complex which has 26 office floors, six retail floors and a two-level car park. The office space above the shopping arcade continues to be called Caroline Centre, however, the retail portion was renamed Lee Gardens Two, and aims to conceptually link up with the nearby Lee Gardens shopping arcade. Hysan had said rentals at the Caroline Centre were expected to rise 10 to 20 per cent after the facelift, and 80 per cent of the 117,063 sqft retail arcade had been leased. BNP Paribas Peregrine said a higher retail element, coupled with a better-designed office floor plate, should enhance the property's overall value and the group's future rental income base. Retail space accounts for 39 per cent of Hysan's total assets, according to the brokerage, which predicted Hysan would post a 13.7 per cent rise in net profit to $576 million in the 12 months to December next year. This year, profit was expected to fall 6.9 per cent to $506 million due to the economic slowdown. Citigroup Smith Barney recently raised its earnings forecast for Hysan by 2 per cent for next year.