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Wednesday, August 20, 2008

Kerry: Demand for China properties 'robust'

KERRY Properties Ltd, the Hong Kong-based builder controlled by the family of Malaysian tycoon Robert Kuok, said demand for Chinese real estate is "robust," and will weather any damage from monetary policy controls.

"The tightening of credit has had a direct impact on investment sentiment," Kerry said in its earnings statement yesterday. "However, the group is of the view that given the strong underlying economic fundamentals and continued growth trends in China, the continual demand for real estate properties remains."

Net income was little changed at HK$2.48 billion (US$317 million) compared with HK$2.47 billion a year earlier, Kerry said. Revenue climbed 24 per cent. Profit excluding revaluation gains rose 12 per cent.

Kerry is expanding in mainland China. The developer and three partners last month said they are investing as much as 7.3 billion yuan (US$1.06 billion) in a project in the northern province of Hebei. Kerry will own 40 per cent of the project.

China in March announced plans to tighten controls on foreign investment in real estate to curb inflows of so-called "hot money." China also put in place other controls to help restrain inflation. The economy grew 10.1 per cent in the second quarter, the fourth consecutive slowdown.

Kerry, whose parent company also invests in media and logistics, owns office buildings and shopping malls in Hong Kong, where values have surged since 2005 as rents rose because of increased consumer spending.

Kerry said the Hong Kong property market eased "mildly" in the second quarter, though land supply shortages will underpin demand longer term.

Kuok, 84, was listed as Malaysia's richest man by Forbes Magazine in May. He and his family have estimated wealth of US$10 billion, according to Forbes.

By Bloomberg

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