The Wharf Holdings Ltd. (00004.HK) is expanding its portfolio of investment properties in a bid to reduce its reliance on sales revenues, the Hong Kong Economic Journal reported.
The company plans to acquire a stake in Crawford House in Central for HK$2.69 billion (US$347.05 million) from controlling shareholder Wheelock and Co. Ltd. (00020.HK). The building is currently valued at HK$5.8 billion.
Wharf deputy chairman and managing director Stephen Ng Tin-hoi said the company is seeking to focus more on investment properties, rather than development.
The acquisition of Crawford House is the “first strike”, Ng noted, adding that rental income from investment properties is currently its growth engine. Investments in shopping malls now account for more than 60 percent of the whole portfolio.
Tens of billions of capital can be used for new Hong Kong and mainland projects if the company cuts its land acquisitions for property development, Ng said.
Given the weak sentiment in the first half of this year, only six developers were able to achieve their sales targets.
Wharf has set a full-year sales target of 23 billion yuan (US$2.97 billion yuan). Contracted sales reached 8.92 billion yuan in the first half, down 18 percent from a year ago.
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