Date
20 August 2017
Shum Chiu-hung said urban redevelopment projects have a longer business cycle but are a good way to obtain land banks for long-term use. Photo: EJ Insight
Shum Chiu-hung said urban redevelopment projects have a longer business cycle but are a good way to obtain land banks for long-term use. Photo: EJ Insight

Times Property dispels concern over urban redevelopment projects

Times Property Holdings Ltd. (01233.HK) said it will go ahead with its urban redevelopment projects in Guangdong province although similar projects of developer Kaisa Group Holdings Ltd. (01638.HK) were blocked by the Shenzhen government.

Kaisa was on the brink of a debt default at the time.

“I think [Kaisa] is just an individual case … I don’t see any political risk if we act according to policy; I don’t think the risk is too big,” Times Property chief executive Shum Chiu-hung said in the firm’s annual results announcement.

Five percent of the Guangzhou-based developer’s projects are related to urban redevelopment, which Shum described as having a longer business cycle but is a good way to obtain land banks for long-term use.

Times Property reported a 30 percent year-on-year jump in net profit to 1.28 billion yuan (US$200 million) in 2014. Revenue from recognized property sales rose 7 percent to 10.1 billion yuan.

The company will continue to boost its presence this year in its existing markets of Guangzhou, Foshan and Zhuhai, which together account for 80 percent of its land reserve, Shum said.

He is positive on the property sector this year, saying overall market sentiment will be better than last year.

Shum attributes this to an environment of monetary easing along with loosened mortgage restrictions and reductions in mortgage rates.

Shenzhen-based Kaisa almost failed to repay US$23 million in interest on time before white knight Sunac China Holdings Ltd. agreed to buy 49.3 percent of the company just three days before the impending default.

The firm’s fortunes began to unravel in December when the government blocked sales of some of its flats in urban redevelopment projects and founding chairman Kwok Ying-shing resigned.

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JH/JP/FL

EJ Insight reporter

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