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Peggy Sito

Lai Sun Development is considering redeveloping two commercial properties in London the company bought over the past year.
"The property at 100 Leadenhall Street we bought early this year is adjacent to our other property. They have potential to be redeveloped when the leases expire in coming years," deputy chairman Chew Fook Aun said on Wednesday after the mid-sized developer announced a 48 per cent year-on-year drop in core earnings to HK$92.8 million for the six months to January.
Lai Sun in January completed the Leadenhall office building purchase in the City of London for £107 million (HK$1.24 billion). It is a few doors away from a property the developer bought for £60 million in April last year.
The buildings are near 30 St Mary Axe, a landmark tower commonly known as the Gherkin.
Lai Sun already had a presence in London with a building at 36 Queen Street. It paid a total of £194 million for the three properties, with a combined gross floor area of 333,900 square feet.
Chew said the buildings in London generated stable income. Net yield after management fees is 5.5 to 6 per cent, exceeding interest costs.
Rents from the newly acquired London properties helped Lai Sun to report a 26.5 per cent rise in turnover of rental operation to HK$299.9 million for the six months. Core profits dropped from HK$178.5 million to HK$92.8 million due to a smaller contribution from property sales.
Chew said future earnings growth would come from a Tseung Kwan O project that would be presold next year and completed in 2017. New rental income will come from a hotel at Ocean Park due for completion in fiscal 2017-18.
Net profit, after property revaluation items, rose 46 per cent to HK$908.4 million. No interim dividend was declared.
Other firms in the group reported mixed results.
At Lai Sun Garment (International), interim core profits excluding property revaluation items fell 57 per cent to HK$34.1 million. Net profit after property revaluation items rose 81.4 per cent to HK$614.3 million.
Mainland unit Lai Fung Holdings said six-month core profits, excluding property revaluation gains and fair value losses on cross-currency swaps, were HK$119.5 million versus the year-earlier HK$54.2 million.
 


Lai Sun looks at redeveloping two recent London property purchases

Lai Sun Development bought the Leadenhall office building (centre) for £107 million. Photo: Bloomberg

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Mid-sized developer's core profits for the six months to January fall 48pc to HK$92.8m


New | Lai Sun looks at redeveloping two recent London property purchases

Mid-sized developer's core profits for the six months to January fall 48pc to HK$92.8m