New digs in Shanghai

Local developer and operator of the TurboJET ferry company, Shun Tak Holdings Ltd., has announced that via a joint venture the group plans to purchase a property in the Pudong New Area of Shanghai for RMB1.95 billion (HK$2.24 billion/US$282,500), according to a filing with the Hong Kong Stock Exchange.
The property occupies 26,707 square metres with a gross floor area of 133,536 square metres and is set to be developed into a commercial and hotel facility as well as an ‘integrated art and cultural facility’.
The plot will also hold an office component, which the joint venture – formed by a wholly owned subsidiary of Shun Tak with a subsidiary of Shanghai Lujiazhui – has the rights to sell 10 years after completion of its government inspection.
Of the total development, the largest component – the office space – will take up 70,000 square metres, while retail will occupy 14,000 square metres, the hotel will take up 20,000 square metres and the integrated art and culture facility will occupy 30,000 square metres, with the hotel to be managed by a Shun Tak subsidiary – the Artyzen Hospitality Group.
‘It is expected that the project will benefit from its superior location,’ notes the filing, as the land, located in the south-eastern part of the Qiantan business district, belongs to the China (Shanghai) Pilot Free Trade Zone.

Strategic change
‘The Group has strategically expanded its investment portfolio in the PRC (People’s Republic of China) with a number of mixed-use development projects culminating in Beijing, Shanghai and Hengqin,’ notes the filing.
‘Under the current economic environment, the Group shall continue to stay vigilant and adopt a pragmatic approach in our core businesses, while executing new projects along the pipeline to build new impetus for growth into the future,’ states the group regarding future expansion.
This comes as it faces ‘challenges’ in its hotel division in both the MSAR and HKSAR ‘as tourist arrivals have declined and price competition intensified’. Regarding the group’s local operations ‘the opening of a pipeline of integrated resorts has further exacerbated the problem,’ causing the hotel to adjust their sales strategy and ‘target markets to drive new revenue sources’.
However the group notes it still remains ‘cautiously optimistic’ about its long-term value returns.
For the group’s property and transportation divisions, the filing mentions that Shun Tak is concentrating its efforts on the pre-sales preparation of Nova City Phase 5 as well as transitioning current routes from the Pac On Temporary Ferry Terminal to the newly built terminal, coupled with plans ‘to increase sailing frequencies to enhance capacities, subject to government approval’.