BT : Henderson to sell flats at HK project under probe

Business Times - 14 Aug 2010

Henderson to sell flats at HK project under probe

(Hong Kong)

HONG Kong billionaire Lee Shau-kee's Henderson Land Development Co plans to sell 10 new apartments at the luxury development where the cancellation of sales worth HK$2.67 billion (S$466.9 million) sparked an investigation by authorities.

The builder held a briefing with real estate agents on Thursday to start marketing the 10 units at 39 Conduit Road, spokeswoman Bonnie Ngan said in a phone interview yesterday. The units were not part of the 20 collapsed sales, she added.

'It shows that the developer is quite optimistic about where the luxury property market is heading,' said Patrick Chow, head of research at Ricacorp Properties Ltd, a local real estate brokerage. 'I don't think they would've put it out to the market if they don't have lots of confidence they'll be able to sell them at these prices. It would look very bad for them if they have to lower prices or even withdraw them.'

Hong Kong's fifth-biggest builder by market value is under government and police investigation after it said in June that 20 of 24 luxury flats it had expected to sell at the development had been cancelled. The company has denied any wrongdoing, and police and government officials have declined to comment on their probes.

The developer is aiming to sell the 10 flats that are priced at as much as about HK$186 million as home prices in the city are expected to increase with interest rates at two-decade lows and demand for the city's high-end properties from mainland buyers.

The value of Hong Kong luxury homes may climb 10 per cent in the second half on record-low mortgage rates and strong economic growth, according to Jones Lang LaSalle Inc.

Henderson's shares dropped one per cent to HK$50.05 at the 4pm close of trading in Hong Kong. The stock is down 14 per cent this year. The seven-member Hang Seng Property Index, which includes Henderson, fell 1.3 per cent in 2010.

The city's overall property prices surged more than 40 per cent since the beginning of last year, according to the Centa-City Leading Index, a weekly measure developed by Centaline Property Agency Ltd and City University of Hong Kong.

Hong Kong's Commercial Crime Bureau took documents from Henderson's offices a month ago as part of the investigation.

Henderson said it will take a charge of HK$734 million against earnings from the cancelled sales.

The builder said in October one of the flats was selling for as much as a record HK$88,000 a square foot.

The 10 new apartments range in size from 2,808 square feet to 3,533 square feet, according to a price list on the development's website.

The cheapest is listed at HK$81 million and the most expensive at HK$186 million. -- Bloomberg

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