Sun Hung Kai Properties (SHKP) could generate HK$150 billion in property sales over a decade by developing its 26 million square foot farmland portfolio, according to a new report, which also warns that such a move may have been set back by the recent arrest of the company's two joint-chairmen. David Ng, a property analyst at Macquarie Equities Research, said in the report that if an anti-graft probe affected the day-to-day activities of co-chairmen Thomas Kwok Ping-kwong and Raymond Kwok Ping-luen and executive director Thomas Chan, then SHKP's land acquisitions, new project commencement and mainland growth faced the most risk. The Independent Commission Against Corruption (ICAC) arrested the three men in March in connection with an investigation into bribery. All three were released on bail and no charges have been laid. SHKP's Chan was mainly responsible for land acquisitions, especially the purchases and conversion of farm land. 'We expect this will be the most severely impacted business activity at the company,' Ng said. The investigation might delay SHKP's farmland conversion and land acquisition in Hong Kong and on the mainland, directly affecting SHKP's sales after 2015, he said. Farmland conversion can take time. First, the land is acquired from the original land owners. The buyer must then get master plan approval from the Town Planning Board and negotiate the land premium with the Lands Department. The report said about 64 per cent of SHKP's gross farmland had yet to be fully converted. Farmland is an important part of SHKP's land bank. The company is the second-largest agriculture land holder among listed developers, after Henderson Land Development's 41.9 million sq ft portfolio. Between 2002 and last year, Ng estimates that 28 per cent of SHKP property sales stemmed from housing developments built on farm land. Five sites with a site area of 4.3 million sq ft in Yuen Long were due to be launched between now and 2015. Ng estimated that these sites could generate close to HK$50 billion in revenue over the next four years. The remaining roughly 20 million sq ft of farmland, between Yuen Long, Tuen Mun, Sheung Shui and Sai Kung, could contribute about HK$100 billion in sales from June 30, 2017, assuming the company successfully negotiated the land premium with the government. Public land auctions by the government do not involve private negotiations and should be less affected by the ICAC probe, Ng said. 'However, the ultimate decision to bid or not, and the maximum limit on land price still involves top management,' he said. 'If there are management changes down the road, all forms of land purchases would likely be affected.' Shares of SHKP dropped 0.32 per cent to close at HK$93.6 yesterday. The benchmark Hang Seng Index rose 1.7 per cent or 352 points to close at 21,094.21.