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Billionaire Hong Kong builders raise cash for land

HONG KONG – Billionaires including Li Ka-shing and Robert Ng have cut debt at their Hong Kong developers to near-record lows as they prepare to buy land as prices fall, the Bloomberg news agency reported.

HONG KONG – Billionaires including Li Ka-shing and Robert Ng have cut debt at their Hong Kong developers to near-record lows as they prepare to buy land as prices fall, the Bloomberg news agency reported.

Cheung Kong Holdings brought its net debt-to-equity ratio down to 1.3 per cent as of June 30, the lowest since at least 1991, while Henderson Land Development’s is at the lowest since 2007, according to data compiled by Bloomberg. Sino Land has HK$29.7 billion (S$4.8 billion) available for land acquisitions after boosting its net cash position, according to BNP Paribas.

Developers, whose debt levels are now at their lowest in two decades, are on track to sell a record HK$150 billion of new homes this year, reducing inventories and boosting cash reserves to help replenish land holdings after average prices fell 34 per cent from last year. Prices may extend declines as Hong Kong’s government, which controls supply, releases more sites for sale to ease a housing shortage, according to CLSA Ltd.

Hong Kong’s government is accelerating land sales to boost housing supply by 470,000 units over the next decade.

Land prices have fallen to an average of HK$3,770 a square foot this year from HK$5,709 a square foot last year as the government increased supply and developers turned cautious, conserving cash, according to Jefferies Group.

The developers referred to their earnings reports when asked about their acquisition plans. Sino, controlled by the family of Malaysian billionaire Mr Ng, will “selectively and continuously” replenish its land holdings, while Mr Li’s Cheung Kong pursued acquisition opportunities of properties and agricultural property. Henderson said it’s continuing to expand its landbank.

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