Great Eagle%26#x27;s earnings reflect new accounting rules, which require revaluations of investment properties to be included in net income. Hong Kong developers including Sun Hung Kai Properties and Henderson Land Development have posted higher first-half profit reflecting increased values of their long-term real estate investments. The value of office buildings in Hong Kong rose 35 percent in 2005.
Great Eagle may raise as much as $800 million in the form of real estate investment trusts, according to bankers familiar with the sale. Great Eagle plans to start offering the shares in April, they said.
The Hong Kong-based company%26#x27;s holdings include the Citibank Plaza office building in the city%26#x27;s Central business district and the Langham Place shopping, hotel and office complex in Mong Kok.
Bad loans, good developers
China%26#x27;s banks reported a 16 percent drop in bad loans to property developers at the end of last year, the banking regulator said, as they tightened lending controls.
The banks had 109.3 billion yuan, or $13.6 billion, of nonperforming loans on their books, down 21 billion yuan from the year before, said Shen Xiaoming, a director of the China Banking Regulatory Commission.
Bad loans comprised 12 percent of all property loans. The bad-loan ratio for mortgage lending rose slightly, to 1.5 percent, Shen said.
China required domestic lenders to increase down payments and the minimum interest rate on property lending last year in a bid to stem a surge in home prices and avoid more bad loans. The nation started imposing limits on building and lending to property projects in April 2003.
China%26#x27;s banking regulator has urged banks, saddled with a total of 1.31 trillion yuan of bad loans, to adopt processes to better manage risk and to watch closely the loans they extend to certain industries perceived as overheated, including real estate. Banks funded half of the nation%26#x27;s property investment as of December 2005.
The outstanding amount of loans to property developers rose 17 percent in 2005 to 914.1 billion yuan, while mortgage lending expanded 15.8 percent to 1.8 trillion yuan, Shen said.
Stock Investment January 24th, 2008
