Property Development

Review of Operations – Business in Hong Kong Property Development 2010 Highlights • Completed 67,103 square feet of properties for sale • Sold an attributable HK$5,423 million worth of properties in Hong Kong During the period under review, two luxury residential developments, namely Jade Suites in Jordan and La Verte in Fanling, were completed. Located at Canton Road, a famous shopping boulevard with many cultural attractions such as the jade bazaar and cinematheque in its proximity, Jade Suites is coveted for its location as well as its convenience as Austin and Jordan MTR stations, as well as the future Kowloon West Terminus of the Guangzhou- Shenzhen-Hong Kong Express Rail Link, are both within its walking distance. Atop three levels of commercial podium, a 22-storey residential tower has been built offering 62 boutique apartments to the Jade Suites, Jordan, Hong Kong (artist’s impression) privileged few and over 70% of the units mortgage loan-to-value ratio and increasing have been sold since its launch in late 2010. Property Sales stamp duty, as well as “nine rules and twelve regulations” which governed the Superbly located at Jockey Club Road, Driven by ample global liquidity as a result transparency and fairness in pre-sales and Fanling, Laa Verte contains 16 three- of the second round of quantitative easing show fl ats. New measures further storey houses,uses, comcomplementedplemented by by the United States, as well as relaxed introduced in mid-November 2010, a luxuriousus clubhouse and car monetary policies adopted by a including the levy of Special Stamp Duty parking spacepace in a tranquil anandd number of European countries, the of up to 15% on residential properties lush setting.g. year under review began with the resold within two years from purchase and local property market continuing the temporary suspension of real estate Particularss ooff these newnewlyly to ride on the cyclical upturn, from the permissible investment asset completed prprojectsojects are set out whilst the positive land auction classes under the Capital Investment in greater detail on page 15 results repeatedly achieved Entrant Scheme, were effective in of the Chairman’shairman’s during the year had further combating short-term speculation. Statement. fuelled market sentiments. In However, with strong fundamentals such order to curb excessive as the prevailing low mortgage interest property speculation and rates and the tight near-term housing enhance risk management of supply outlook, the confi dence of both end- mortgage lending by local users and investors is still intact with the banks, the Hong Kong SAR Jade Suites, Jordan, transaction volume having picked up Hong Kong Government announced a gradually. Property prices, as a result, have series of cooling measures remained buoyant. such as lowering the 50 550_RO_BiHK_Property0_RO_BiHK_Property DDevelopmentevelopment VV3.indd3.indd 5500 111年3月31日1年3月31日上上午1:22午1:22 Review of Operations – Business in Hong Kong • Property Development The reported transacted prices of some of the other developers’ luxury apartments and houses, as recently achieved in the primary or secondary market amid the heated market sentiment, are listed below: Area Transacted price Average price per Date of (Approx.) (Approx.) square foot (Approx.) Properties of Other Developers Sale (sq.ft.) (HK$ Million) (HK$) 37B Island Road 25/01/2011 7,000 440 62,883 37C Island Road 16/12/2010 7,000 435 62,143 House 8, Severn 8 14/03/2010 4,650 280 60,215 House 5, 36 Repulse Bay Road 08/10/2010 4,260 250 58,685 House 2, 74 Mount Kellett Road 16/08/2010 4,200 230 56,310 Penthouse A, Belgravia, South Bay Road 21/10/2010 3,675 182 49,741 36/F, The Albany 22/02/2010 6,830 338 49,488 51/F, Branksome Crest 22/03/2010 4,620 203 43,939 Some other cities in the Asia Pacifi c region, The Group was active during the year in satisfactory response from buyers. Some such as Singapore and Macau, have promoting the sale of a number of residential popular residential projects such as 39 similarly experienced an infl ux of foreign developments including the project at Conduit Road, The Beverly Hills (Phase 1), capital and keen buying response from Headland Road in Island South, Légende 8 Royal Green, The Sparkle, Cité 33, Grand local buyers and they have separately rolled Royale - The Beverly Hills (Phase 3) in Tai Waterfront and Grand Promenade were also out cooling measures during the year so as Po, Hill Paramount in Shatin, Green Lodge re-launched for sale. Altogether, a total of to rein in the soaring property prices. in Yuen Long and Jade Suites in Jordan with 572,507 square feet in attributable gross Hill Paramount, Shatin, Hong Kong Henderson Land Development Company Limited Annual Report 2010 51 550_RO_BiHK_Property0_RO_BiHK_Property DDevelopmentevelopment VV3.indd3.indd 5511 111年3月31日1年3月31日上上午1:22午1:22 Review of Operations – Business in Hong Kong • Property Development fl oor area of residential properties were with accounting principles generally the sale and purchase in respect of these 20 sold. Together with the disposal of accepted in Hong Kong. Among these units and forfeited the deposit of 5% of the approximately 96,410 square feet of units, completion of the sale and purchase purchase price with the rest of the payments industrial/offi ce space, the Group sold an of four units took place in mid-June 2010 refunded to the purchasers. A loss of attributable HK$5,423 million worth of and the Group received in full the amounts approximately HK$734 million attributable properties in Hong Kong for the year ended of purchase price receivable, together with to the Group was recorded as a result of the 31 December 2010 (before taking into about HK$11 million as interest for delayed cancellation of the sale of these 20 units. account the effect of cancelled sales, completion. There was no reduction in The Group agreed to cancel the sale and including those of the 20 units at 39 Conduit purchase price, nor the provision of fi nance purchase of these units so as to avoid Road, as referred to below). for those four units. Written requests were protracted and costly legal proceedings to received from the respective purchasers for claim against the original purchasers and For the 18-month period ended 31 the cancellation of the sale and purchase enable the Group to offer them for sale December 2009, the turnover and profi t agreements for the other 20 units. In again immediately if it so wished. after taxation in respect of the sale of 25 accordance with the terms of the standard units at 39 Conduit Road, a luxury property form of sale and purchase agreement under It has to be pointed out that property prices development in which the Group has a 60% the Consent Scheme administered by the depend mainly on the supply and demand interest, were recognized in accordance Government relating to pre-sale of at a particular point in time, in much the with accounting policies of the Group residential units in uncompleted same way as the price for a commodity is consistently applied and which are in line developments, the Group agreed to cancel fi xed. In the case of properties, additional Légende Royale, Tai Po, Hong Kong Henderson Land Development Company Limited 52 Annual Report 2010 550_RO_BiHK_Property0_RO_BiHK_Property DDevelopmentevelopment VV3.indd3.indd 5522 111年3月31日1年3月31日上上午1:22午1:22 Review of Operations – Business in Hong Kong • Property Development 11 - 12 Headland Road, Island South, Hong Kong considerations, such as the location of the record price for luxury apartments. Further property, the quality of the design, evidence of the quality of the Group’s material and fi nish, and the facilities developments can be found at 11 and 12A provided, would have a great impact on Headland Road, where two houses with their pricing. Other factors that have a gross fl oor area of 13,033 square feet and bearing are the low interest rate 10,093 square feet respectively were sold environment and infl ation expectations during the year at a price of HK$50,641 which would prompt investors to acquire and HK$47,360 respectively per square properties for investment or as a hedge foot. As mentioned above, high prices against infl ation. The sale of the 24 units were also repeatedly achieved by other in 39 Conduit Road was normal bona fi de luxury developments. transactions legally conducted with unrelated parties at arm’s length. It is At 31 December 2010, the Group had over regrettable, however, that such sale became 760 residential units available for sale, the subject of unjustifi ed and incorrect comprising a total gross area of over 1.8 criticisms which could have been prompted million square feet, of which around 1.7 by high property prices. million square feet was attributable to the Group. Particulars of the major As evidence of the quality of 39 Conduit development projects offered for sale and Road, a semi-duplex apartment (unit B on pending sale or pre-sale are shown on Level 61) was sold during the year at the pages 16 and 17 of the Chairman’s price of HK$60,000 per square foot, a 39 Conduit Road, Mid-Levels, Hong Kong Statement. Henderson Land Development Company Limited Annual Report 2010 53 550_RO_BiHK_Property0_RO_BiHK_Property DDevelopmentevelopment VV3.indd3.indd 5533 111年3月31日1年3月31日上上午1:22午1:22 Review of Operations – Business in Hong Kong • Property Development Status of Major Property Developments 388 Jaffe Road, Wanchai (100% owned) The Gloucester, 212 Gloucester Road, Wanchai (100% owned) Site area : 4,408 square feet Gross floor area : 66,130 square feet Site area : 11,545 square feet Expected completion : End of 2011 Gross floor area : 113,977 square feet Residential units : 177 Wanchai has become a popular destination for conventions and Expected completion : Fourth quarter of 2012 exhibitions, bringing an increasing number of upscale business and leisure travellers to that district.

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