Lai Sun eyes stronger leasing to boost cash flow
The group is banking on key projects in Hong Kong and the mainland to increase its portfolio and boost rental income, deputy chairman says
The Lai Sun group of companies says it aims to strengthen cash flow by increasing the leasing of properties in Hong Kong and on the mainland.
The group's property flagship Lai Sun Development (LSD), which is focused on the Hong Kong property market, owns a leasing portfolio of 1.4 million square feet.
LSD deputy chairman Chew Fook Aun said: "The joint-venture office development with Henderson Land in Tsim Sha Tsui is scheduled for completion in the third quarter of 2015. CCB Tower in Central started to contribute this year. The two buildings will contribute a total rental income of HK$200 million a year."
He said annual rental income of the leasing portfolio would increase to between HK$700 million and HK$800 million in two years. The leasing portfolio of Lai Fung Holdings, the group's mainland property arm, will increase from 2.4 million sq ft to 3.5 million sq ft in two years, with rental income increasing 26 per cent to about HK$800 million.
Chew, also Lai Fung's chairman, said: "It could strengthen our cash flow. Then it won't be a problem for us, even if there is fluctuation in property prices."
At the end of 2012, LSD joined ousted Sun Hung Kai Properties' chairman Walter Kwok Ping-sheung to acquire a residential site in Tseung Kwan O. It is the most expensive site in the area in terms of accommodation value. Chew said the project would be launched in 18 months to two years. "I don't think the land price is expensive," he said. "It is located in a prime location and has a sea view."