Developer to 'hang up his boots'

Western Plaza in Chengdu, China, comprises four office towers with retail space, making up a total floor area of about 75,000 sq m, as well as an 18-storey hotel with more than 300 rooms.
Western Plaza in Chengdu, China, comprises four office towers with retail space, making up a total floor area of about 75,000 sq m, as well as an 18-storey hotel with more than 300 rooms.PHOTO: HAN CHENG FONG

Real estate veteran Han Cheng Fong said he has recouped his costs - and then some - from his mixed- use project Western Plaza in Chengdu, and will be looking to "hang up his boots".

The former chief executive of DBS Land and Fraser & Neave said his Chengdu project, the first development under his own steam, was completed last year and is almost fully sold.

The project comprises four office towers with retail space, making up a total floor area of about 75,000 sq m, as well as an 18-storey hotel with more than 300 rooms.

Three of the office towers are fully sold, while 75 per cent of the fourth tower has been sold. Prices are from 10,000 to 12,000 yuan (S$2,000 to S$2,400) per sq m.

The project is next to a shopping mall developed by Singapore Exchange-listed Perennial Real Estate, which disclosed the mall's valuation of 1.2 billion yuan and strong occupancy rates in its yearly report.

Dr Han's company, Brilliance International Investment, bought land from state-owned China Railway Group in 2010 and sold part of the plot to Perennial.

Dr Han estimated Western Plaza's value to be 1.3 billion yuan, with pre-tax net profit expected to be about 500 million yuan.

He said that when the project began sales in 2014, "the market (was) hot". But as the government tightened the availability of loans, sales have cooled, he said.

Still, he is satisfied with the venture, in which he has a 50 per cent stake. The rest is held by his Chengdu-based partner.

He said: "Once you've sold more than 35 per cent of the project, you've recovered all your costs."

"I've done a lot of projects in China since the early 1990s, and this is the first time I'm out on my own... We made some small money... so I'm quite happy."

Dr Han, 75, tips Chengdu and Chongqing as cities in which he has "a lot of confidence" because of China's "One Belt One Road" strategy, which will develop the country's western cities.

He is ready to "start riding into the sunset", saying: "One should quit when the going is good."

A version of this article appeared in the print edition of The Straits Times on April 01, 2017, with the headline 'Developer to 'hang up his boots''. Print Edition | Subscribe