Sun Hung Kai Properties Limited (HKG: 0016) is an investment holding company principally engaged in the development of and investment in properties for sale and rent, hotel operation and telecommunications. Sun Hung Kai's segments include property development, property investment, hotel operation, telecommunications and other businesses. In Hong Kong its operations include property development, property investment, property related businesses, telecom and information technology, and transportation, infrastructure and logistics. Its Mainland China operations include property development and property investment. Its property related business includes hotels, property management, construction, financial services and insurance.
Property Development - HK$12.5 billion or 37.6% of 2010 Revenue 12.6 million sq.ft. under development 26 million sq.ft. of agricultural land
Property Investment - HK$ 8 billion or 24.3% of 2010 Revenue 27.6 sq.ft. completed investment properties 4 million sq.ft. under development
Property Related Businesses - HK$1.4 billion or 4.2% of 2010 Revenue Hotels, Property Management, Construction, Financial Services, Insurance
Telecoms & Information Technology - HK$4 billion or 11.9% of 2010 Revenue SmarTone (65.6% Interest) SUNeVision (84.6% Interest)
Transportation, Infrastructure & Logistics - HK6.5 billion or 19.5% of 2010 Revenue Transport International (33.3% Interest) RoadShow (25.6% Interest) Wilson Group (100% Interest) Route 3 (CPS) (70% Interest) Air Transport & Logistics Business Port Business
Property Development - HK$110 million or 0.33% of 2010 Revenue 76.8 million sq.ft. under development
Property Investment - HK$726 million or 2.2% of 2010 Revenue 5.5 million sq.ft. completed investment property
Sun Hung Kai Properties’ profit in 2010, excluding the effect of fair value changes on investment properties, HK$13.9 billion, 12% increase from 2009. Profit in 2010 including the HK$14.97 billion revaluation surplus (obtained from the change in fair value of investment properties) amounted to approximately HK$28 billion. The significance of this revaluation surplus is underscored by the fact that a HK$2 billion deficit was reported in 2009.
Hong Kong housing prices have gained 55% over the 2 year period from May 2009 to 2011 on record-low mortgage rates and buyers from China. In January 2010, Hong Kong was ranked the world’s most expensive place to buy a home by London-based property broker Savills Plc in January. Such growth in the property market has generated substantial profits for Wharf, particularly through the revaluation of the fair value of assets its portfolio.
In November, the Hong Kong government increased property transaction taxes and pledged to boost land supply amid public protests that prices are unaffordable; however, these initiatives have done little to cool the Hong Kong property market.
Private consumption increased in 2010 by 7.6% and is expected to continue to grow due to a two-year low in the jobless rate of 3.4%. Additionally, the Hong Kong government will give a handout of HK$6,000 to each permanent resident in 2011, as stated by Financial Secretary Tsang said in March 2011. The money will encourage retail spending, benefiting businesses in Sun Hung Kai's retail properties such as YOHO Midtown as well as the group's newest shopping and entertainment attraction Mikki, which will have 205,000 square feet of space targeting young customers with a premium shopping experience. The group will also develop a million-square-foot shopping and entertainment hub at the heart of Yuen Long.
Sun Hung Kai Properties' business is primarily focused on property investment and development; however, like many other major conglomerates in Hong Kong competitors such as Swire Pacific Ltd, Hutchison Whampoa (HKG:13), and Wharf_(HLDGS)_(HKG:4), the group operates in additional business segments in several other different industries such as logistics and telecom.
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