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Monday, October 17, 2016, 10:57

New chapter for storied developer

By Duan Ting

Hong Kong developer Bonds Group is focusing on more offshore projects, its chairman Anson Chan tells Duan Ting.

New chapter for storied developer
Rather than putting all their eggs in one basket, Hong Kong-based property investment firm Bonds Group of Companies is inching toward greater global exposure by diversifying its operations, according to its CEO and chairman Anson Chan Yiu-cheung. (Roy Liu / China Daily)

One of Hong Kong’s long-established property investment firms, Bonds Group of Companies, is expanding its business towards more multi-national investment, says Hong Kong property businessman, chairman and chief executive officer Anson Chan Yiu-cheung.

The group was founded in the 1960s by his parents, Seaker Chan Shu-kui and Anita Chan Lai-ling — both philanthropists and educators. The era is considered a major stepping stone economically, and was a turning point for Hong Kong as it was categorized as one of the “Four Asian Tigers”, joining Singapore, South Korea, and Taiwan. Large local property companies were mostly established during the period.

In the late 1940s, Seaker Chan left Guangdong for Hong Kong and soon had interests in business, school buildings and social welfare. Anson Chan’s parents founded the group and under their management, mostly by his mother as his father passed away in 1973, the company focused on buying properties and leasing them out for long-term rental returns.

But since Chan took over the reins in 2008, he has been actively expanding into property development and investment, as well as financial mergers and acquisitions.

The company owns commercial and residential properties and hotels throughout prime locations in Hong Kong, the Chinese mainland, Taiwan, Canada, the US, the UK and Southeast Asia with total assets of more than HK$10 billion.

New direction

In terms of its business strategy, Chan says the company will continue to develop projects in Hong Kong and keep the head office in the city for its sound legal and financial system. But there will be a stronger focus on developing more overseas projects, rather than putting all their eggs in one basket, he says.

The company has a number of local projects underway, including a joint venture with Hong Kong’s Urban Renewal Authority, located on Chi Kiang Street and Ha Heung Road. It is in close proximity to a station on the Shatin to Central MTR line currently under construction, and should be completed by mid-2017.

Overseas, Bonds is in the midst of constructing the landmark Tate Downtown project in Vancouver, Canada. The former six-story office building is being transformed into residential high-rise building with 40-stories and 320 suites, with 98 percent already sold.

The group also owns a large-scale resort hotel and conference center in Sun Moon Lake, Taiwan as part of a 50-year joint venture with the Taiwan Tourism Bureau. On the Chinese mainland, the group owns and operates a major serviced apartment building in Beijing’s CBD district.

The company has also recently entered into financial mergers and acquisitions, intending to buy bad asset packets from the Chinese mainland.

As the inheritor of the family business, Chan says he endeavors to carry the business and honor of the family forward, by adopting the management and investment experience he has accumulated from working in financial institutions for several years.

He says entrepreneurs should have the spirit of “Yu Gong Yi Shan”, which indicates the faith to move mountains, and aims to lead the family business to becoming more international.

Uncertain times

Chan says due to the Chinese mainland economy losing traction, fewer visitors from the Chinese mainland and the Legislative Council election results, the current business environment in Hong Kong is not ideal and the development prospects of the city are uncertain.

Chan points out as the real estate sector contributes to about 30 to 40 percent of the local GDP, the economy won’t improve if the industry is sluggish. He says the property tax policy imposed by local government reduces the trading volumes of properties and impacts developers such as Bonds, but it has little effect on housing prices.

Three sets of punitive taxes were introduced by the Hong Kong government since 2012: buyer’s stamp duty, special stamp duty and double stamp duty. This was to rein in speculation and discourage foreign and corporate buyers from pushing up prices.

“The government is in a dilemma state”, Chan says with a strained smile, explaining that half of Hong Kong people own properties, and it is difficult for the government to balance everyone’s interests.

“But it really depends on the government’s policy to push the economic development in Hong Kong … currently a lot of policy initiatives in the business sector are stuck in the Legislative Council and unable to proceed further.”

He also says the government should review the Hong Kong dollar, which is currently pegged to the US dollar. De-pegging of the currency might be another way to regulate and adjust housing market, says Chan.

Chan says he prefers locations where the business environment is friendly. He is optimistic about investment opportunities in Canada and Singapore, where there are many Chinese people, as well as London after Britain’s vote to leave the European Union. However, he is concerned about Australia and Taiwan where governments have tightened policies in the property investment sector.

On the Chinese mainland, Chan favors first-tier cities like Beijing and Shanghai as the policies and operations are more standardized and similar to Hong Kong’s, while it requires more research and a deeper understanding of the local environment if investing in lower-tier cities.

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