Henderson Land’s move to sell non-core assets is an ongoing exercise

Henderson Land Development says it is in an ongoing exercise for the group to dispose of non-core assets but emphasised it is in no hurry to sell down the investment portfolio.

PUBLISHED : Wednesday, 23 March, 2016, 6:11pm
UPDATED : Wednesday, 23 March, 2016, 7:23pm

Henderson Land Development said it was in an ongoing exercise for the group to dispose of non-core assets but emphasised it was in no hurry to sell down the investment portfolio.

The company’s comments came after market talk that it has released 30 properties for sale with an indicative price of HK$68 billion, about 10 per cent lower than previously.

“The group has been offering non-core assets for sale. But we do not have a price tag for these properties,” a spokeswoman at Henderson Land said. “These projects have been on the market for quite some time and we will sell only when we receive an attractive offer.”

A list of 30 properties, either held by Henderson Land or its chairman Lee Shau-kee -- each with price quotation -- has circulated in the market since Tuesday. They comprise of office space and shopping malls, as well as residential and industrial projects in Kwun Tong, North Point, To Kwa Wan, Cheung Sha Wan, Tsim Sha Tsui and Central.

Among them, the 22-storey office building, Manulife Financial Centre, in Kwun Tong is the priciest with an estimated valuation of HK$18 billion.

The company’s 44-storey AIA Tower in North Point is believed carry a HK$12 billion price tag.

The spokeswoman said it is a document for internal reference.

“These properties are subject to negotiation and we do not have a listed price for each of the projects,” she said.

The market widely expects Henderson Land will undergo group restructuring or take Henderson Land into private ownership in a bid to improve ts share value.

Chairman Lee said on Monday that the stock was under valued, as the book value of its net asset value attributable to equity shareholders as at December 31 stood at HK$76.

“DTZ valued us at HK$100.10 a share,” said Lee who stated he had no plan to introduce group restructuring or take Henderson Land private.

Alfred Lau, an analyst at Bocom International said there are many other ways for the group to crystalise its net asset value even without privatising Henderson Land.

“These alternatives include asset disposal, share buyback, or reinvesting its cash,” Lau said.

While there is a 20 to 30 per cent downside in such estimate, he agreed there was deep value in Henderson Land.

“Nevertheless, there are also the same old problems of capital intensiveness in acquiring old buildings and slow asset turnover, dragging returns,” he said.

Separately, Sun Hung Kai Properties released the price list for the first 126 units at its residential project, Ocean Wings, in Tseung Kwan O at an average price of HK$14,380 per square foot. Factoring in a maximum 14 per cent discounts, the average price will be HK$12,400 per sq ft with the cheapest one bedroom flat being offered at HK$4.33 million.