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2008-11-19 03:21:00 p.m. HKT, XFNA
UPDATE 1-Hang Lung Prop sees 2009 China land target in reach
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By Fang Yan and Qu Weizhi
SHANGHAI, Nov 19 (Reuters) - Hong Kong developer Hang Lung Properties has a
good chance of meeting its 2009 land acquisition target for commercial projects
in China, which seemed in doubt before the financial crisis brought more
property to the market, its chairman said on Wednesday.
"We have a good chance to hit the target. We've already completed 60
percent of the land acquisitions," Ronnie Chan told reporters on the sidelines
of an industry forum on Wednesday.
"I wouldn't dare to say that if not for the financial crisis, but now the
market is weakening. It actually provides us a good opportunity," he said.
Hang Lung, which has developed two landmark shopping complexes in
downtown Shanghai, set a target in 2003 to acquire land for 18 commercial
projects in China by the end of 2009 at a total cost, including development, of
40 billion yuan ($5.86 billion).
It has already acquired land in Tianjin in the north, Shenyang in the
northeast and Wuxi in the east.
Chan said the financial crisis would weigh on the firm's earnings this
fiscal year, however.
In the latest fiscal year ended in June 2008, Hang Lung, 51.86 percent
owned by Hang Lung Group Ltd, reported a 107 percent jump in profit to HK$13.6
billion ($1.76 billion), helped in part by the disposal of residential
properties in Hong Kong.
Chan said his company would be unable to match that doubling in profit
this fiscal year due to weakening market demand.
"We made several billion (Hong Kong dollars) selling residential
properties last year. But it's hard to sell even one apartment this year and we
have to rely entirely on rent," Chan said.
He added, however, that he did not expect a sharp decline in rental
income this year as many tenants were bound by leasing contracts of more than
three years.
Unlike many developers, Hang Lung holds its properties for long-term
capital gains and rental income.
($1=6.823 Yuan; $1=7.750 Hong Kong Dollar)
(Editing by Edmund Klamann) Keywords: HANGLUNG/
(yan.fang@thomsonreuters.com; Reuters Messaging: yan.fang.reuters.com@reuters
.net; +86 21 6104 1793)
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