Property Sales Recognition and Asset Disposal
Contributed to Significant Increase in Net Profit
HONG KONG, Aug. 31 /PRNewswire-Asia/ -- Wing Tai Properties Limited(the "Group", SEHK stock code: 369) announced the Group's unaudited results for the six months ended 30 June 2010.
During the period under review, the Group achieved a net profit of $794.3 million mainly attributable to recognized profits from the pre-sale of Forfar and Belle Vue Residences, increased rental from Landmark East, disposal of two industrial properties and fair value revaluation gains on investment properties. Revenue for the Group was HK$1,356.6 million in the first half of 2010 (1H 2009: HK$417.0 million).
The Board of Directors proposed to declare an interim dividend of HK3.5 cents per share, or a total interim dividend payout of HK$46.3 million (1H 2009: HK$14.8 million) based on the total number of shares on 30 June 2010.
The Group's property division, which includes property development, property investment and management, and hospitality investment and management, recorded segment profit of HK$1,088.1 million for the first half of 2010, compared with HK$77.9 million in 2009. During the period, the Group recorded a gain on disposals and reversal of deferred tax liabilities of approximately HK$204.8 and HK$92.5 million respectively from the disposals of two investment properties.
In Hong Kong, over 60% of the units of "Forfar" were sold to-date since its presale in July 2009. Approximately HK$900 million revenue was recognised during the period. For "Seymour" in Mid-Levels West, while construction works are not expected to be completed until the second half of 2011, approximately 85% of the units have already been sold since it was launched for presale in November 2009. From that, approximately HK$900 million in revenue will be recognised in the second half of 2011 upon the issuance of occupation permit. The construction works at Tai Po Town Lot Nos. 186, 187, 188 are on track and are expected to be completed in phases between 2011 and 2012. Subject to market condition and regulatory approval, the development will be ready for presale in the first half of 2011.
Turning to property investment and management business, the Group disposed of two industrial properties for a total consideration of HK$949.0 million in June, generating net proceeds of approximately HK$584 million upon completion of the formal sale and purchase agreements in the fourth quarter of 2010.
During the period, Landmark East saw a significant increase in tenancy on the back of a dynamic Grade A office leasing market. Committed leasing rates reached approximately 80% to-date as compared to approximately 50% at the beginning of the year. Rental rates also rose 25% on average in the first half of the year. W Square in Wan Chai was 98% leased as at 30 June 2010.
The Group's hospitality business continued to improve during the period. Both Lanson Place Jinlin Tiandi Residences in Shanghai and Lanson Place Central Park Residences in Beijing achieved about 97% occupancy. Lanson Place Jin Qiao Residences in Shanghai opened its entire first tower in mid May this year, while the second tower will be opened in September.
Commenting on the outlook of the property market, Mr. Cheng said: "The Group is cautiously optimistic about the prospect of the property market in the second half of the year. Nevertheless, the lingering uncertainty in the global economy as well as measures from both the Mainland and Hong Kong governments aimed at dampening speculations in their respective property markets might continue to impact on the prospect of the sector."
Further to the recent acquisition of a luxury property redevelopment project in the Mid-Levels West, the Group will closely monitor the market to capture any acquisition opportunities to replenish its land bank. For the investment property business, the occupancy rates and rental rates at Landmark East are expected to improve further for the remainder of the year, supported by growing demand for Grade A office space and a continuing trend among companies to decentralize to Kowloon East. With regard to the hospitality business, Lanson Place is expected to continue to deliver strong operating performance as the economy regains strength.
