Hang Lung 'optimistic' as profit up 29pc to HK$2.48b in first half

Hang Lung Properties said yesterday underlying profit surged 29 per cent in the first half of the year to HK$2.48 billion.

However, chairman Ronnie Chan Chichung expressed concern that the Occupy Central protest movement may adversely affect property prices if the civil disobedience campaign gets going in the second half of the year.

Hang Lung Properties underlying profit jumped due to growth in rental income and Hong Kong property sales. Its turnover grew 35 per cent to HK$4.46 billion.

Revenue from property leasing gained 10 per cent to HK$3.56 billion.

"Property prices are more likely to be stable this year. The existing market sentiment is neither strong nor weak. But the demand from end-users is very strong," Chan said.

He worries though about the affect Occupy Central would have on the market.

"If the Occupy Central protest happened, there would be fewer developers joining the land bidding. Developers may not be able to submit their tender documents to the government," he said.

The government's decision to relax the double stamp duty on some property transactions in May has helped the property market. "I think the market has gone back to a normal situation. It is hard to say whether it would continue till the year end or not, but I'm optimistic," he said.

Chan revised an earlier gloomy forecast of the market because of improvements in the sector although Hang Lung will not likely buy a site in Hong Kong during the rest of the year.

"Hong Kong developers are still cash rich and have a low gearing ratio. They have sufficient resources for land acquisition. It is not easy for us to buy a plot," he added.

Chan said on the mainland it was also difficult to buy a large site in first-tier cities because of competition.

"We may have a better chance to buy a large site in second-tier cities," he added.

Hang Lung's property sales were boosted 9.86 times to HK$901 million due to sales of The Long Beach in West Kowloon during the period.

A luxury residential project in Happy Valley is expected to obtain its occupation permit later this year and be ready for release if the market environment suits.

The firm declared an interim dividend of 17 HK cents a share.