TUESDAY, FEBRUARY 8

PROPERTY sources say Sun Hung Kai Properties will have to negotiate a land premium payment with the Government if its plan to develop farmland in Yuen Long into a residential development is to go ahead. It is expected that the land premium will be set in the middle of the year. Sources say the amount will be in the order of $600 million. The farmland is adjacent to another plot of land which SHKP and Hongkong Land will jointly develop. Both plots cover one million square feet. The Government has agreed in principle that SHKP can redevelop the farmland into residential units with a gross developable floor area of 480,000 square feet on a plot ratio of 0.4. SHKP plans to construct 200 three storey villas similar to California Garden. Initial investment is estimated to be more than $1 billion. - ECONOMIC JOURNAL CHEUNG Kong Holdings has informed the stock exchange that it increased its holdings in Shougang International by a total of 14 million shares on February 1 and 3. Cheung Kong's stake in the company has increased from 13.62 per cent to 14.75 per cent. - ECONOMIC JOURNAL NEW World Development has reached an agreement with the Government on the redevelopment of a dyeing plant in Tsuen Wan into a residential property. The project will be carried out in co-operation with HKR International. Sources say New World and HKR have agreed to pay $3.85 billion as a land premium for the redevelopment, almost double the $2 billion previously expected. If the estimated construction cost of $2.1 billion is included, the redevelopment project will require a total investment in the region of$6 billion. According to the co-operation agreement, HKR will provide the land while New World will shoulder the full burden of the land premium and construction cost. - MING PAO DUE to the fact that property developers are expecting a further rise in prices for industrial properties, the dates of sale of a considerable number of industrial centres already completed have been delayed. Two floors of an industrial centre in Aberdeen,developed by Kwong Sang Hong, have been sold internally but the property will not be offered for public sale as yet. Elsewhere, a completed industrial complex in Kwun Tong, jointly owned by Sino Land and Laws, has also yet to be offered for sale. - MING PAO SELWYN Ma, managing director of Sincere, says the austerity drive adopted by the Chinese Government has increased the competition in the Shanghai retail market. He says that although Shanghai's Sincere department store will be able to break even this year,operating revenue is expected to decline by 25 per cent. It has been reported that there are seven department stores in Shanghai and Dickson Concepts and Lane Crawford will set up stores in the city by year-end, further increasing competition. - SING TAO LAM Soon (Hong Kong) bought 4.5 million shares of Lam Soon Food on February 1, increasing its stake from 59.13 per cent to 60.35 per cent. - ECONOMIC JOURNAL PACIFIC Concord announced that it has acquired a 16.5 per cent stake in the National Mutual Centre and an eight per cent stake in blocks A and B of Tregunter Garden from Hongkong China for $579 million. Elsewhere, Hongkong China has sold an eight per cent stake in National Mutual Centre to Kerry Development. Following the completion of the deals, Hongkong China's stake in National Mutual Centre will decline to 25 per cent. - ECONOMIC JOURNAL A REPORT by Colliers Jardine says the market for luxury properties in Clearwater Bay has been active recently. There are signs that demand has been strong and the fact that luxury property prices in the inner city remain at high levels has increased their attractiveness. Villas are particularly sought after. - ECONOMIC JOURNAL ACCORDING to a report by Vigers, office rental values and prices are expected to continue their upward trend in 1994. The report says that in the fourth quarter of 1993, the rental values of office space in all areas of Hong Kong and Kowloon have again risen and that an imbalance of supply and demand is seen to be a continuing factor well into 1994. - ECONOMIC JOURNAL PATRICIA Yeung, deputy managing director of ABC Communications, says following the lifting of the US embargo on Vietnam, she expects the company to benefit by exploring the great potential of the Vietnam market. She adds that despite the competition of newUS companies entering the Vietnamese telecom market, the fact that the Vietnam market has yet to open leaves the company some room to establish its position. ABC has a pager station in Ho Chi Minh City and another station in Hanoi will begin services on February 19. She expects that there will be seven or eight pager stations in place by April, by which time ABC will have invested around $10 million in Vietnam. On the Taiwan market, she says there has been no major break-through in ABC's operations there. However, she does not think the company will have to write-off losses incurred there. - MING PAO KWOK Wai-ming, managing director designate of UniSouth Holdings, says that following the acquisition of the company by his brother, Kwok Wai-tak, UniSouth's textile business in Sri Lanka will not be sold. Kwok Wai-ming says the purpose of his brother's acquisition of the company is to establish an investment base in Hong Kong and be involved in more investment activities through capital raising. Meanwhile, the brothers are seeking to further internationalise UniSouth's operations. - ECONOMIC JOURNAL TEMPLETON, a US investment fund, bought further into CNT Holdings on February 2. The fund bought 14 million shares in CNT, raising its stake from 14.05 per cent to 15.26 per cent. - ECONOMIC JOURNAL PROPERTY sources say the company which owns part of the Wing Shan Building in Central has sold floors one to 10 for $1.5 billion. It is understood that the company reached a verbal agreement with Wing Shan Enterprise, the former owner of the floors, early last month, by which the company paid $1.25 billion to acquire the floors. The two parties signed a formal agreement at the beginning of February. In just a month, the company has made a profit of $2.5 billion. Property sources say that although property deals valued at more than $1 billion have not been usual of late, the fact that the property has been sold in such a short period of time and the owner made so much profit, is considered rare. - ECONOMIC JOURNAL MICHAEL Thong, a director of Herald Holdings, says the acquisition of Zeon, a UK watch and clock distributor, will contribute to the expansion of Herald's watch and clock operations. The importance of this business will increase to a level comparable with its toy and computer magnetic head operations. He predicts that the profits generated by the watch and clock division will reach $10 million this year. - ECONOMIC JOURNAL HSBC Life, a subsidiary of HSBC, will actively expand its life insurance operations in Hong Kong. Lam Lai-ha, general manager of HSBC Life, says the company plans to step up the proportion of its life insurance operations from 15 per cent to 50 per cent infive years. However, it is not looking to significantly increase its number of insurance salesmen and will continue to rely on Hongkong Bank's network of customers as its major distribution channel. - ECONOMIC JOURNAL