Polytec confident about Pearl Horizon lawsuit

Developer Polytec Asset Holdings Ltd. believes it has ‘strong legal grounds’ to win its lawsuit against the MSAR Government for compensation of time to complete its high-end residential project Pearl Horizon.
‘Based on the legal opinions received, [The company] has strong legal grounds to obtain compensation of time by applying to the Courts of Macau including Tribunal Adminsitrativo (Administrative Court) in order to continue and complete the project,’ the developer stated in its annual results filed with the Hong Kong Stock Exchange yesterday.
According to the company, the city’s courts will set a hearing date for the lawsuit filed by its local arm Polytex Corporation Ltd. ‘in the near future’.
Construction work for the project was suspended following the expiration of Polytec’s 25-year temporary land concession for the project site, which expired on December 25 last year. The government later declined the company’s application for extension of the land grant, stating the city’s land law mandates no temporary land concession can be renewed or extended if developers fail to fulfil their development obligations within the land-use term.
“Not my fault”
Nevertheless, the Hong Kong-listed developer has stressed that the delay in completion of the luxury residence was due to the delay of the government in granting the requisite approvals and permits for the development of the project and thus filed a lawsuit against the government’s decision to take back the plot.
Polytec noted in yesterday’s filing that it would resume its construction work on the project ‘immediately’ and would complete the project in 2018 if it wins the lawsuit and is given relevant approvals by local authorities.
‘If the applications were ultimately declined, the Macau Government would have a right to resume the land without any compensation to the owner of the land,’ it added.
Pearl Horizon, sitting on a site known as Lot-P of Areia Preta on the Macau Peninsula, is designed to house 18 towers with 5,000-plus residential units. Over 3,000 of these units have already been sold off-plan, according to the government’s earlier disclosure.
Meanwhile, the company claimed yesterday that it had completed the foundation work for another residential project on Lots T+T1 in Areia Preta, for which superstructure work is now in progress. ‘The construction work is being expedited aiming for completion and obtaining an occupation permit in mid-2017. A pre-sale programme of its residential units will be launched in due course,’ it said.
2015 net profit up 18.3 pct
For 2015, the developer’s net profit attributable to equity shareholders amounted to HK$51.7 million (US$6.44 million), which increased by 18.3 per cent from HK$43.7 million for 2014. In addition, its turnover for the year totalled HK$357.5 million, which climbed 21.4 per cent year-on-year.
In particular, the company’s share of gross rental income earned from its investment properties surged 26 per cent year-on-year to HK$68.3 million last year. It explained the lift was primarily attributable to increased rents from its half-owned Macau Square property in the city – which contributed a total of HK$63.2 million to the group’s rental income for the year.
Polytec expects its investment property portfolio in the Special Administrative Region will continue bringing stable income for this year despite it foreseeing that ‘the Macau economy is expected to remain weak for a considerable period of time.’