Thu, Jan 25, 2018 - Page 12 News List

Highwealth Construction to double project volume

By Crystal Hsu  /  Staff reporter

With the local property market showing signs of a recovery, Highwealth Construction Corp (興富發) yesterday said it plans to launch NT$50.7 billion (US$1.73 billion) worth of new projects this year.

The figure is more than double the Taipei-based property developer’s volume of less than NT$20 billion last year, when it focused on digesting inventory and delayed some project launches.

“Unlike some peers who hold negative views, the company is genuinely confident about the market, which is why it has built up its landholdings,” Highwealth chairman Cheng Chih-lung (鄭志隆) told an investors’ conference in Taipei.

Highwealth acquired more than NT$14 billion worth of land in different parts of the nation last year, its most in four years, he said.

The company posted NT$18.67 billion in revenue last year, 46.78 percent less than in 2016, largely due to its efforts to delay projects so that its profits would see a dramatic boost this year, he told reporters on the sidelines of the conference.

Net income amounted to NT$2.02 billion for the first nine months of last year, while gross margin fell to 27 percent, compared with 32 percent in 2016 and 37 percent in 2015.

A shift in focus from large luxury accommodations to small apartments accounted for the margin decline, company spokesman Liao Chao-hsiung (廖昭雄) said.

The company’s margin might hold firm at 25 percent as small apartments should continue to be a mainstream product as the nation’s population shrinks, Liao said.

The company digested NT$7.5 billion of unsold houses last year and aims to trim inventory at an annual pace of between NT$7 billion and NT$10 billion, an achievable goal, as the key is price concessions, such as the ones that pushed up buying interest late last year, especially for luxury housing, he said.

“Price cuts of 15 percent would leave the company unscathed,” he said, adding that the firm’s unsold units totaled NT$28 billion.

Highwealth also aims to build more office buildings in major municipalities as old office space in Taichung and Kaohsiung does not modern corporate needs, Liao said, citing lower floor ceilings and poor air-conditioning.

The company last year developed 20,000 ping (66,115.8m2) of office space in Taichung and sold almost all of it, he said.

The firm plans to expand into the hospitality and retail businesses, and has inked pacts with international hotel chains to run properties in New Taipei City, Taichung, Tainan and Kaohsiung.

Soft openings for the properties are scheduled for 2022 and 2023, Liao said.

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