Annual Report - QuamIR

Management Discussion and Analysis (Continued)
Shenyang
As to the three sites of the South Lake residential development project,
sites B and C have been completely cleared and handed over to the Group
during the fourth quarter 2011. Meanwhile, HKC is continuing to work with
the government to complete the relocation of occupiers on site A. Site
preparation and basement construction for Sites B and C have made good
progress. Site B is expected to be completed in 2015. Site C, mainly for
housing resettled tenants, is expected to be completed by the end of 2013.
BC
ABC
B
C
Shenyang’s commercial market has proved to be less favourable given
existing oversupply and potential new projects that are expected to be
completed over the next several years. As a result, HKC has decided not to
proceed with its Shenyang Jingang Tower commercial project, and sold the
project so that the Group can better use the cash in existing and other new
projects.
Beijing
In Beijing, the Group has made substantial progress in managing the retail
properties at Legation Quarter. Legation Quarter was the former United States
diplomatic compound in Beijing, and is situated along the southeast corner
of Tiananmen Square. HKC owns a 15-year lease on the property, and has
turned the site into a high end retail center — combining the site’s historical
legacy with high end retailers. Legation Quarter is now 90% committed by the
end of 2011, with a number of high end tenants.
Alternative Energy
All of the Group’s alternative energy projects are under its subsidiary, now
renamed China Renewable Energy Investment Limited (“CRE”). All of the
windpower projects have been completed, and are now generating power.
As a result, CRE is now EBITDA positive. Please see CRE’s annual report for
more details.
Infrastructure
The Group’s water supply plant in the Yangpu Economic Development Zone
in Hainan continued to make contributions to the Group, with revenues rising
from HK$44.5 million in 2010 to HK$52.6 million in 2011. As sole supplier of
raw water for industrial use in the area, it remains in an excellent position for
achieving regular, reliable and long-term revenues.
23
23
15
23
90%
44,500,00052,600,000
The Group’s Build-Operate-Transfer (“BOT”) toll road project in Guilin
continues to make progress. Revenues increased 38.2% year on year. An
interchange connecting a new highway from Hunan and a new highway from
Guangdong, connecting with the Group’s expressway, when completed,
should further boost the traffic flow.
38.2%
12 HKC (Holdings) Limited • Annual Report 2011