TTP to build Asian towers

By Coran Lill

Friday 2nd July 2004

Plans for Trans Tasman Properties' Hong Kong venture include building up to 1000 apartments, TTP executive chairman Don Fletcher says.

Last week, TTP kicked off its controversial Asian strategy by announcing it had bought a $112 million, 2ha property in the northern Hong Kong district of Sha Tin.

In February the company confirmed new strategies, which included bailing out of Australasian properties where the market was at a high and delving into the Asian market, which has been in more of a low in recent times but is believed to be on the rise.

The deal has prompted predictable outcries from some minority shareholders who have questioned the need for an Asia presence.

In March TTP announced it had bought a Hong Kong retail precinct for $7.5 million.

TTP has bought the Sha Tin property from a subsidiary of Dairy Farms International majority-owned by business conglomerate Jardine Matheson. The deal's finance structure has not been determined but Fletcher said it would be lowly geared.

The land located between a broadly middle class residential area and a dwindling industrial one had a couple of factory buildings and an employee residence on it, Fletcher said.

They would be bulldozed and "roughly there will be five to six residential towers with 800 to 1000 apartments built on them" a common Hong Kong apartment development.

He said final plans would depend on negotiations with the government on how much gross floor area was possible.

Sha Tin, in the New Territories region, is one of Hong Kong's 18 districts and has a population of 637,000. It covers an area of 60sq km. The Chinese University of Hong-Kong is based there, as is the new Hong Kong Heritage Museum.

The TTP property is located in the Sha Tin suburb of Fo Tan and backs on to the Fo Tan railway station.

A senior director with global property firm FPDSavills in Hong Kong Peter Yuen said the purchase was notable for the size of the property.

"Nowadays it is very difficult to find such a big site in Hong Kong," he said.

While 65% of Sha Tin's population live in government-funded housing, Yuen described the area as being middle class. Fletcher agreed although when pressed said the area was "slightly less" than middle class. He envisaged the apartments being built for "the mid to upper end of the Hong Kong market" and TTP would start selling off the plans within a year or two.

TTP was not ruling out reselling the property or teaming up with another company to develop the property

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