Hang Lung blames legislators for long-term property woes

Finance | Victor Zhong 30 Jul 2021

Hong Kong's property market has been developing in an "unhealthy" way for 20 years, Ronnie Chan Chi-chung, chairman of Hang Lung Property (0101), declared as he pointed a finger of blame at the Legislative Council.

Chan also said during an online conference that the legislature had stymied the administration's efforts to explore the supply of new land for development in the New Territories East as well as on the peripheries of country parks while resisting reclamation.

After the implementation of the national security law, however, the SAR had changed fundamentally and appeared to be on the way to having increasing land supply for 50 years.

Chan claimed too that his views on the Hong Kong property market are neutral, though Hang Lung is interested in developing high-end flats.

Although mainland investors were seen to be keen to buy property in Hong Kong, Chan added, most flats in a Hang Lung residential project on Blue Pool Road in Happy Valley that were priced at over HK$300 million were brought by Hongkongers.

As for a rebuilding project on Ngau Tau Kok Road, chief financial officer Ho Hau-cheong said pre-sales were expected to be launched within a few months.

The remarks came as Hang Lung Properties reported interim underlying net profit rising 11 percent to HK$2.2 billion, driven by property leasing business in the mainland.

The developer reported a net profit of HK$2.23 billion in the first half of the year compared with a loss of HK$2.54 billion 12 months before.

An interim dividend of 18 HK cents was declared against basic earning per share of 50 HK cents.

The parent company, Hang Lung Group (0011), which is also chaired by Chan, said underlying net profit grew 12 percent year on year to HK$1.5 billion. It declared an interim dividend of 21 HK cents.

Chan also said China's recent curb on the country's real estate market is expected to provide a small measure of help to the group's premium shopping mall business.

He noted that mainlanders are not investing so much in homes, and that could lift consumption.

And Beijing has been taking action to curb the mainland property market with the introduction of the so-called "three red lines" to limit new loans. But Hang Lung's leveraging ratio was far below regulators' restrictions.

Also, Chan said, Beijing mainly targets the residential market whereas Hang Lung concentrated on commercial property.

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