Hang Lung chief rejects HK fears

Hang Lung Development Co chairman Ronnie Chan yesterday dismissed fears Hong Kong's stock and property markets were running out of control.

Mr Chan told delegates in a workshop on Asian entrepreneurs and the global market at the 32nd World Congress in Shanghai that Hong Kong markets were essentially fuelled by a shortage of real estate.

'There is no question of a bubble because there is real demand for real estate stocks,' he said.

'Essentially, in terms of fundamentals, we have a case of very strong demand [for property] in Hong Kong not adequately met by supply.' He said if property prices fell sharply, top property companies would be able to absorb the decline as they were financially sound.

'Hang Lung has a net debt of zero, and the top eight to 10 property companies in Hong Kong are in a similar situation,' Mr Chan said.

The supply of private property in Hong Kong could meet only two-thirds of demand, and the imbalance would disappear by 1999 when new projects came on stream.

Mr Chan said Hong Kong was running out of land to sell to property companies, but the Government could alleviate the land shortage by raising the plot ratio of the limited land parcels for sale later.