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Karen Chan

Peggy Sito

Over the past few decades, Henderson Land Development chairman Lee Shau-kee has quietly and cleverly spun together a vast fortune, making him one of the richest tycoons in town.

Mr Lee built Henderson by accumulating large swaths of New Territories land, plot by plot, from villagers in the 1970s.

He then engaged the government in a series of  talks over land premiums, gauging the timing of Hong Kong's boom-and-boom-again property market almost perfectly, before sweeping into the market with huge residential estates targeting the newly affluent middle class.

After that, Henderson began sprawling across Hong Kong's economic landscape, investing in Miramar Hotels, Hong Kong and China Gas, Hong Kong Ferry and scores of other businesses.

With luck and an uncanny eye for opportunity, Mr Lee parlayed about  $10 billion in dividend payouts from his various listed vehicles over 30 years into a  $50 billion personal investment portfolio.

It sure beats building factories.

'With stocks, futures and bonds, I can make a billion dollars in a few weeks, unlike with manufacturing, where I have to employ a lot of workers, set up manufacturing facilities and wait years for a return,' Mr Lee said.

For the 75-year-old,  the focus on stockpiling wealth is now secondary to the need to preserve it. Hence his decision to set up Henderson Financial Enterprises Group, a family trust funded by Mr Lee's personal holdings, earlier this year.

'With  20 to 30 investment projects in the United States, Canada, Hong Kong, Singapore and Japan, we can get at least a 10 per cent return. Even 20 per cent,' he said.

Unperturbed by economic austerity measures, Mr Lee sees good value in forthcoming mainland initial public offerings, especially in the banking and insurance sectors.

'We are in talks with some companies and the sponsors,  trying to clinch deals before their IPOs,' he said.  'You cannot be wrong if you invest in  leading companies in China. If these companies go wrong, that would mean no investment in China would survive.'

Mr Lee said with its  friendly tax regime, Hong Kong remained an attractive international financial centre for  investors.

The exception lay in the estate duty, which he said should be scrapped to ensure super-rich individuals such as Warren Buffett  parked some of their wealth in the city.

While  the family trust is commanding more of his attention these days, Mr Lee said he was still  hands-on in managing Henderson's listed empire.

'I want to turn Henderson into an even bigger company in eight to 10 years,' he said.

Asked what the future might hold for his empire,  Mr Lee smiled softly. 'I'm often asked about the succession process. Fortunately, I just have two sons, not 20. Looking for a successor is not a big problem.'

Mr Lee said his elder son, Peter Lee Ka-kit, had taken charge of the mainland business while his younger one, Martin Lee Ka-shing, was  involved in the Hong Kong operations.

While Hong Kong is a mature market, Mr Lee said the future for Henderson Group would be  Greater China,  even though the time was not  right for a massive expansion.

He said the mainland business environment would improve  over the next five years as it changed in accordance with the closer economic partnership arrangement  and the World Trade Organisation, creating a more level playing field.

'With a solid foundation and strong connections, Henderson Group is poised to benefit from these changes,' he said.

For now, Hong Kong remains Henderson's focus. The group is building up a war chest for expansion, obtaining a $10 billion revolving credit facility last month.

'It's been a borrowers' market for at least four to five years,' Mr Lee said. 'The borrowing cost is virtually nothing, so we decided to build up our war chest.'

The key project on the agenda is the $24 billion West Kowloon cultural hub, to be built on 40 hectares of reclaimed waterfront.

The company has spent $50 million recruiting international consultants  to provide an innovative design for the project, according to vice-chairman Colin Lam Ko-yin.

The group is proposing to build a 150-metre fountain - the world's tallest. It has consulted more than 340 overseas and local arts and cultural organisations about their requirements for an auditorium. Residential, commercial and cultural facilities will each occupy about 30 per cent  of the land.

Henderson is competing for the project with a Sun Hung Kai Properties-Cheung Kong joint venture, Swire Properties and a consortium comprising Sino Land, Wharf (Holdings), Chinese Estates Holdings and K Wah Group.

Regarding suggestions that the government release unsold Home Ownership Scheme (HOS) flats to help resolve the deficit as the property market improves, Mr Lee warned such a move would damage the government's integrity.

A promise was a promise, he said. The government announced it would not flood the  market with HOS flats. To do so now would undermine its credibility in the eyes of  investors.



Henderson chief takes on next challenge