Lai Sun Development promises more partnerships

Lai Sun Development hinted yesterday that its partnership with Sun Hung Kai Properties' ousted chairman Walter Kwok Ping-sheung to develop a HK$6 billion residential project on a recently acquired site in Tseung Kwan O could be the beginning of more partnerships.

Deputy chairman Chew Fook Aun said the group might form joint ventures with different partners in bidding for sites and developing projects in Hong Kong and on the mainland.

Asked if there had been any discussions with the eldest Kwok brother over further co-operation, he said: "We will consider any opportunities if they arise. In fact, various companies have expressed interest in forming alliances with us ever since we became more active in land acquisitions. We are open to all options."

The group's mainland property unit, Lai Fung Holdings, has attracted offers from a number of parties interested in jointly developing its proposed Creative Culture City in Hengqin's cultural and creative zone in Guangdong province.

Chew said the details of the project had not been finalised but the estimated total investment in the 1 square kilometre mega project would be about 10 billion yuan (HK$12.3 billion).

Last month, Lai Sun made its first land acquisition by forming a 50-50 joint venture with Walter Kwok and outbidding five others for the Tseung Kwan O residential site with an above-expected price of HK$2.83 billion. Including land costs, Lai Sun said the total investment cost would be HK$6 billion.

Chew said the group's cash flow and bank loans available for land replenishment together amounted to HK$10 billion. He said the group would expand its investment property portfolio so as to build a source of stable, recurrent income.

He expected the company's rental income to rise to HK$600 million if two of its 50-per-cent-owned commercial projects - CCB Tower in Central and another commercial development in Tsim Sha Tsui - were fully let out in the next two to three years. As of July, Lai Sun's rental income amounted to HK$400 million.

"With a strong recurrent income, we hope our shareholders will start receiving dividends in 2014," he said.

In an expression of confidence in Lai Sun, chairman Peter Lam Kin-ngok has increased his stake to 50.04 per cent, from 48.07 per cent, buying up shares between 18.9 HK cents and 31.1 HK cents since November 1.