Property Development and Holdings
Through its "garden city" residential developments and the innovative Wonderful Worlds of Whampoa commercial complex, the Group's property division has helped change the face of Hong Kong, improving the quality of life for hundreds of thousands of people. The division also has an extensive portfolio of commercial properties and it is involved in a number of property developments in China.
Profit from the property division totalled HK$1,409 million (1995 - HK$2,936 million), which arose primarily from rental income and the sale of development properties. While rental income recorded an increase, profit from the property development sector was down, as expected, now that the South Horizons and Laguna City developments have been completed.
Hong Kong - Property Sales
During the year, the remaining units, comprising a gross floor area of approximately 584,000 sq ft, and 259 car parking spaces were sold at the Group's Laguna City project in Kwun Tong in east Kowloon. The Group also sold its remaining interest in Concordia Plaza, a commercial development in Tsim sha Tsui.
Hong Kong - New Acquisitions and Properties Under Development
Steady progress was made in the Group's projects under development in Hong Kong. In Central, site formation is well advanced for Cheung Kong Center, the Group's planned office tower which is to be constructed on the site of the former Hongkong Hilton Hotel. Demolition of Beaconsfield House is underway and the site will be incorporated into the Cheung Kong Center development. Work on the superstructure is expected to commence later this year, and when completed during the second half of 1998, the office tower will comprise a total floor area of approximately 1,260,000 sq ft as well as provide underground parking for approximately 1,050 cars. The Cheung Kong Center will be one of Hong Kong's most "intelligent" buildings, and it is already attracting a high level of interest from prospective tenants.
In North Point, where the Group has a 39% interest in a 36,641 sq ft site under development, work on a twin-tower office and hotel complex is on schedule. Due for completion in 1999, the hotel will have approximately 800 rooms and a total floor area of 349,000 sq ft, while the office tower will provide 212,000 sq ft of office and commercial space.
Construction of a commercial complex in Hung Hom, in which the Group has a 25% interest, is scheduled for completion in 2000. This 1.4 million sq ft complex will comprise a hotel, three office blocks and a shopping arcade.
The Group has a 60% interest in a consortium that is developing a large-scale residential complex above the Mass Transit Railway station at Tsing Yi. When completed in phases in 1998 and 1999, the development will provide 2.68 million sq ft of residential space.
In Tai Po, site formation work is underway for a 131,000 sq ft residential project in which the Group has a 50% interest. The project is scheduled for completion in 1998. Work is also proceeding on schedule on a 1.39 million sq ft residential development at Ma On Shan, in which the Group holds a 50% interest. When completed in 1999, the development will have approximately 1,600 residential units. Another residential project currently under development is located on Broadcast Drive. The Group has a 50% interest in this project, which when completed in 1998, will provide a gross floor area of approximately 200,000 sq ft.
In November 1996, a joint venture company equally owned by the Group and Cheung Kong (Holdings) Limited entered into an agreement with Kowloun-Canton Railway Corporation for a residential development with a gross floor area of approximately 1.2 million sq ft at Hung Shui Kiu, Yuen Long, in the New Territories.
In February of this year, the Group and Cheung Kong (Huldings) Limited formed another 50/50 joint venture company which entered into an agreement with the Mass Transit Railway Corporation for the development of Tung Chung Town Lot No 5 near the Tung Chung Station of the new airport railway. The development will comprise residential units and a shopping centre with a total gross floor area of approximately 3.3 million sq ft. Completion of this development is scheduled for 2000.
Hong Kong - Rental Properties
The Group's investment portfolio comprising approximately l0 million sq ft of commercial, industrial and residential properties in Hong Kong remained virtually fully let and continued to generate a steady flow of quality recurrent income.
At Hung Hom, the Group benefited from the on-going upgrading of its Whampoa Garden commercial complex, where a number of "theme" shopping concepts were successfully opened, including Home World, Fashion World, Book World and Screen World. Additional new themes are to be launched this year. Rental income was further enhanced by the full occupancy of the Harbourfront twin-towers, which provide a gross floor area of 863,000 sq ft of Grade-A office space. The Hongkong International Distribution Centre, in which the Group holds an 88% interest, remained substantially fully let throughout the year.
China - Properties Under Development
Satisfactory progress was made during the year on the Group's following joint venture property projects in China:
Construction of the 1.1 million sq ft retail podium of Metropolitan Plaza is scheduled
to be completed this summer and pre-letting of the shops has already started, with strong
interest shown by prospective tenants. Construction of the hotel and office towers portion
of this development is expected to be completed in 1999. When completed, the entire
complex will provide a total of approximately 1.9 million sq ft of space.
(The Group has a 40% interest in this project)
Delivery of the site above the underground railway station at Huangsha, which is
currently under construction, is expected to take place this year. When completed, this
development will provide in the region of 1.3 million sq ft of residential space and
531,000 sq ft of commercial area.
(The Group has a 45% interest in this project)
Construction of the first phase of an 847,000 sq ft commercial/residential complex was
completed and substantially sold. Work has started on the second phase, which will
comprise five tower blocks with a total of 485,000 sq ft of residential space. Completion
is scheduled for 1999.
(The Group has a 30% interest in this project)
Site investigation work has been completed for this low-rise residential development.
Preparation of the master plan and the design for the first phase of the project, to
comprise approximately 75 houses, is in progress.
(The Group's interest in this projact is 35 %)
United Kingdom - Properties Under Development
During the year, 60 residential units in the Group's 47.5% owned residential redevelopment project, comprising 132 flats and penthouse units, in London's Kensington district were pre-sold. The remaining units in this development are expected to be offered for sale later this year. The development is scheduled to be completed in 1998. The Group also recently acquired a 47,000 sq ft site near Sloane Square, London, for residential development. Planning is underway, and work will begin upon handover of the site, which is expected to take place before the end of this year.
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