Cyberport bullish on earnings
Rising occupancy at hi-tech office project boosts prospects for management firm
Hong Kong Cyberport Management, a government-owned firm that runs the hi-tech office project in Pok Fu Lam, expects to make an operating profit for the year to March next year amid rising occupancy.
Chief executive Nicolas Yeung Wai-hung said the company recorded a profit for seven of the past 10 months, while occupancy rose to 73 per cent recently.
Cyberport was criticised by some lawmakers when it reported 54 per cent occupancy in March.
Cyberport, which derives its revenue mainly from office rentals, recorded an operating loss of HK$89 million for the year to March this year before taking dividends of HK$1.6 billion from the sales of Residence Bel-Air, the luxury residential portion of the project.
'Seventy-three per cent of our offices are occupied by a total of 93 companies, including 30 incubator companies,' Mr Yeung said.
He said Cyberport will not invest in any start-up firms.
The average monthly rent at Cyberport is about HK$20 per square foot and will be adjusted according to market conditions, Mr Yeung said.
He declined to say whether incubator companies enjoy lower rent.
Cyberport will not reduce rentals to boost occupancy and will balance its commitments to supporting hi-tech industry while making commercial interests, Mr Yeung said.
'We will continue to upgrade our infrastructure, including the digital system, to attract more tenants,' he said.
Half of Cyberport's tenants come from overseas, such as Microsoft, the world's largest software company, and Sybase, a provider of enterprise infrastructure and mobile software. The rest are local firms.
Cyberport said it wants to maintain the tenant mix.
Under the regulations, the government can get 67 per cent of the dividends from the sales at Residence Bel-Air and the remainder goes to Pacific Century Premium Developments, PCCW's property subsidiary.
Richard Li Tzar-kai, who has agreed to sell most of his interests in PCCW, will step down as Pacific Century's chairman in 2008 when all units at its Residence Bel-Air project have been sold, a source said last month.
Mr Yeung said selling PCCW is a reasonable move for Mr Li and it does not mean Mr Li is losing interest in the media industry, including the Cyberport project, where many telecommunications and multimedia firms are located.
'I believe Richard Li still has a vision for Cyberport,' Mr Yeung said.
Last month, Pacific Century reported a 167 per cent jump in net profit to HK$703 million for the first six months of the year from HK$263 million in the year-earlier period, boosted by increasing sales at Residence Bel-Air.
