Henderson Land has a land bank in Hong
Kong with a total attributable gross floor area of about 19.2 million square
feet, with 120 million sq ft in the mainland. The company's agricultural
land reserve in Hong Kong amounted to about 32.3 million sq ft, the largest
holding among local developers.
- 2009 March 20 THE
Police probe Hong Kong luxury flat sale: report
AFP/File – An exclusive apartment building towers above its neighbours in Hong Kong's
Mid-Levels residential …
HONG KONG (AFP) – Hong Kong police are probing the controversial
sale of luxury flats that fell through months after its developer said
one of them had set a world-record price, a report said Sunday.
The Sunday Morning Post, citing a Transport and Housing Bureau
document, said police had joined the probe into the sale after the
government launched an investigation into the deal earlier this month.
A police spokesperson could not be immediately reached for comment.
Property giant Henderson Land Development reported this month that the sale of as many as 20 out of 24 units at its exclusive 39 Conduit
Road towers in the city's Mid-Levels residential area had been cancelled.
The scrapped deals included what was supposed to be the world's most
expensive apartment, a 6,158-square-foot (554-square-metre) duplex that
Henderson said in October had sold for 56.6 million US dollars.
Critics demanded a probe and asked why the cancellations came to
light only eight months after the sales announcement, which helped hike
prices for luxury residential flats in Hong Kong and stoked concerns
about a property bubble.
Henderson has also been condemned for selectively numbering the
floors on the 46-storey building as a ploy to attract Chinese buyers.
The supposed 68th-floor duplex that snatched world-record price was
actually on the 43rd and 44th floors, according to reports. It was so
numbered because "68" sounds like "continuing
fortune" in Chinese and is considered lucky.
A Henderson official could not be immediately reached Sunday, but a
spokeswoman told the Post the company would co-operate with any police probe
"We are open to investigation. If they contact us, we'd be happy
to provide them with the necessary information."
- 2010 June 27 YAHOO
HK police get in the act over cancelled
Police are probing the controversial sale
of luxury flats that fell through months after its developer said that one
of them had set a world-record price, a report said yesterday.
The Sunday Morning Post, citing a
Transport and Housing Bureau document, said that police had joined the probe
into the sale after the government launched an investigation into the deal
earlier this month.
A police spokesman could not be
immediately reached for comment.
Property giant Henderson Land Development
reported this month that the sale of as many as 20 out of 24 units at its
exclusive 39 Conduit Road towers in the city's Mid-Levels residential area
had been cancelled. The scrapped deals included what was supposed to be the
world's most expensive apartment, a 6,158-square-foot duplex that Henderson
said in October had sold for US$56.6 million.
Critics demanded a probe and asked why
the cancellations came to light only eight months after the sales
announcement, which helped hike prices for luxury residential flats in Hong
Kong and stoked concerns about a property bubble.
Henderson has also been condemned for
selectively numbering the floors on the 46-storey building as a ploy to
attract Chinese buyers. The supposed 68th-floor duplex that snatched
world-record price was actually on the 43rd and 44th floors, according to
reports. It was so numbered because '68' sounds like 'continuing fortune' in
Chinese and is considered lucky.
A Henderson official could not be
immediately reached yesterday, but a spokeswoman told the Post that the
company would cooperate with any police probe.
- 2010 June 28
Over the past few decades, Henderson Land
Development chairman Lee Shau-kee has quietly and cleverly spun together a
vast fortune, making him one of the richest tycoons in town.
Mr Lee built Henderson by accumulating large
swaths of New Territories land, plot by plot, from villagers in the 1970s.
He then engaged the government in a series of
talks over land premiums, gauging the timing of Hong Kong's
boom-and-boom-again property market almost perfectly, before sweeping into
the market with huge residential estates targeting the newly affluent middle
After that, Henderson began sprawling across Hong
Kong's economic landscape, investing in Miramar Hotels, Hong Kong and China
Gas, Hong Kong Ferry and scores of other businesses.
With luck and an uncanny eye for opportunity, Mr
Lee parlayed about $10 billion in dividend payouts from his various listed
vehicles over 30 years into a $50 billion personal investment portfolio.
It sure beats building factories.
"With stocks, futures and bonds, I can make a
billion dollars in a few weeks, unlike with manufacturing, where I have to
employ a lot of workers, set up manufacturing facilities and wait years for
a return," Mr Lee said.
For the 75-year-old, the focus on stockpiling
wealth is now secondary to the need to preserve it. Hence his decision to
set up Henderson Financial Enterprises Group, a family trust funded by Mr
Lee's personal holdings, earlier this year.
"With 20 to 30 investment projects in the
United States, Canada, Hong Kong, Singapore and Japan, we can get at least a
10 per cent return. Even 20 per cent," he said.
Unperturbed by economic austerity measures, Mr Lee
sees good value in forthcoming mainland initial public offerings, especially
in the banking and insurance sectors.
"We are in talks with some companies and the
sponsors, trying to clinch deals before their IPOs," he said. "You
cannot be wrong if you invest in leading companies in China. If these
companies go wrong, that would mean no investment in China would
Mr Lee said with its friendly tax regime, Hong
Kong remained an attractive international financial centre for investors.
The exception lay in the estate duty, which he
said should be scrapped to ensure super-rich individuals such as Warren
Buffett parked some of their wealth in the city.
While the family trust is commanding more of his
attention these days, Mr Lee said he was still hands-on in managing
Henderson's listed empire.
"I want to turn Henderson into an even bigger
company in eight to 10 years," he said.
Asked what the future might hold for his empire,
Mr Lee smiled softly. "I'm often asked about the succession process.
Fortunately, I just have two sons, not 20. Looking for a successor is not a
Mr Lee said his elder son, Peter Lee Ka-kit, had
taken charge of the mainland business while his younger one, Martin Lee
Ka-shing, was involved in the Hong Kong operations.
While Hong Kong is a mature market, Mr Lee said
the future for Henderson Group would be Greater China, even though the time
was not right for a massive expansion.
He said the mainland business environment would
improve over the next five years as it changed in accordance with the closer
economic partnership arrangement and the World Trade Organisation, creating
a more level playing field.
"With a solid foundation and strong
connections, Henderson Group is poised to benefit from these changes,"
For now, Hong Kong remains Henderson's focus. The
group is building up a war chest for expansion, obtaining a $10 billion
revolving credit facility last month.
"It's been a borrowers' market for at least
four to five years," Mr Lee said. "The borrowing cost is virtually
nothing, so we decided to build up our war chest."
The key project on the agenda is the $24 billion
West Kowloon cultural hub, to be built on 40 hectares of reclaimed
The company has spent $50 million recruiting
international consultants to provide an innovative design for the project,
according to vice-chairman Colin Lam Ko-yin.
The group is proposing to build a 150-metre
fountain - the world's tallest. It has consulted more than 340 overseas and
local arts and cultural organisations about their requirements for an
auditorium. Residential, commercial and cultural facilities will each occupy
about 30 per cent of the land.
Henderson is competing for the project with a Sun
Hung Kai Properties-Cheung Kong joint venture, Swire Properties and a
consortium comprising Sino Land, Wharf (Holdings), Chinese Estates Holdings
and K Wah Group.
Regarding suggestions that the government release
unsold Home Ownership Scheme (HOS) flats to help resolve the deficit as the
property market improves, Mr Lee warned such a move would damage the
A promise was a promise, he said. The government
announced it would not flood the market with HOS flats. To do so now would
undermine its credibility in the eyes of investors. -
2004 September 3 SOUTH
CHINA MORNING POST
the last recession, the principals of Henderson Land successfully liquidated
3,800 units they owned in Texas.
$174M Multifamily Sale Closes in
A $174 million closing caps more than six months of talking by a buyer
who convinced the Henderson Land Development Co. of Hong Kong to part with
3,800 units, or practically all of its multifamily assets in Texas. The
portfolio never came to market, but it did wind its way to the closing
table, with Sendera Investment Group LLC getting deeds to 11 properties in
Houston, three in Dallas and one in San Antonio. The mostly class B
portfolio was 92% occupied at sale time. - 2003 February 27
More than once or twice, the group has
attempted to privatize itself. The organization is led
professionally by Vice-Chair, Colin Lam.
unit dives 17.3pc
The unexpected failure of the Henderson Investment privatisation sent
investors running for cover yesterday as shares of the company plunged as
much as 17.36 per cent despite the benchmark index posting its biggest
one-day gain in two months.
Henderson Land Development, which holds Henderson
Investment, closed at HK$24.10, up about 3 per cent, while Henderson
Investment was down HK$1 or 13.98 per cent, at HK$6.20 on volume of 27.8
million shares. The Hang Seng Index added 218.33 points, or 2.33 per cent,
to close at 9583.85 on the back of Wall Street gains.
At an extraordinary general meeting on Thursday,
57 minority shareholders of Henderson Investment, representing a total of
70.19 million shares or 2.49 per cent of the company's total shares
outstanding, opposed the deal. According to Securities and Futures
Commission rules, Henderson Land is not able to propose another
privatisation of Henderson Investment for 12 months. ``Henderson Investment
shares should continue languishing around the HK$6 level as another attempt
to privatise it cannot take place for 12 months,'' Phillip Securities head
of research Louis Wong said.
``The fact that it closed at HK$6.20, higher than
the HK$5.95 its shares were trading at when the offer was first announced in
early November, shows that the company still has good value.''
Grand Cathay Hong Kong Securities executive
director Fernando Lao noted that the volume of 27.8 million shares was more
than nine times the average number of Henderson Investment shares traded
daily. ``The volume of 27.8 million shares is actually moderate as it surged
to more than 30 million shares when the privatisation bid was made,'' he
Wong added that the effect of the failed bid on
Henderson Land's share price was mitigated by the rise in the broader market
but was in line with other blue-chip property stocks such as Sun Hung Kai
Properties, which surged 2.6 per cent, and Sino Land, up 2 per cent.
Goldman Sachs said it had lowered its 2003, 2004
and 2005 earnings per share forecasts for Henderson Land by 5 per cent, 8
per cent and 1 per cent to HK$2.21, HK$1.75 and HK$2.07 respectively,
``mainly to remove the potential earnings enhancement from the privatisation''.
``Henderson Investment's contribution to Henderson
Land's net asset value (NAV) is estimated to be about HK$1 so the rejection
of the deal will not affect the share price that much. I think its outlook
will depend more on the property market, especially with the start of sales
at Cyberport in February,'' Wong said. A Salomon Smith Barney report
released yesterday estimated Henderson Land's NAV at HK$33.90.
``We do not expect there to be any operational or
strategic changes for Henderson Land resulting from this development.
Furthermore, as the shares have corrected 16 per cent in December, we do not
expect to see any abnormally strong selling pressure,'' the report said.
Wong said the failed bid would likely negatively
affect any further proposals by Henderson Land to privatise Miramar Hotel
& Investment and Hong Kong Ferry as well as other pending deals, like
New Asia Realty Trust's privatisation bid for Realty Development Corp.
Earlier, Henderson Land vice-chairman Colin Lam
said the company had no plans to privatise either Miramar or Hong Kong
``I guess it would make sense for Henderson Land
to make a second attempt at taking Henderson Investment private in 12
months' time,'' Wong said. ``This strategy worked well in Hutchison's bid
for Cavendish, for example.'' - 2003
Henderson Investment Ltd minority shareholders
rejected a HK$5.68 billion (S$1.3 billion) buyout offer from parent
Henderson Land Development Co, a rare veto as Hong Kong tycoons reorganise
their empires to ride out a property market slump.
Hong Kong's No 3 developer offered to buy all
outstanding shares in its investment arm, giving Lee Shau-kee's flagship a
greater share of profits from Hong Kong & China Gas Ltd, whose gas sales
have been unaffected by a 60 per cent drop in Hong Kong property prices
since their 1997 peak.
But other developers have succeeded where
Henderson failed. New World Development Co, held by the family of managing
director Henry Cheng, and Hang Lung Development Co, controlled by chairman
Ronnie Chan, earlier gained shareholder approval to shuffle assets to
bolster their flagship companies.
'The price they offered is not that fair,' said
Sam Ho, an analyst at East Asia Asset Management Co. 'It's a victory for
minority shareholders. Maybe next time companies will give fairer value when
they buy out units.'
Henderson Investment stockholders including
Franklin Resources Inc said before the vote that the offer price was too
low. The complaints prompted Henderson Land to boost its offer to HK$7.60 a
share from the HK$7.35 it first announced. Henderson Investment's net asset
value is HK$10.52 a share.
'The 28 per cent discount to asset value was very
reasonable,' said Colin Lam, vice-chairman of both Henderson Land and
Henderson Investment. 'The price represented about a 30 per cent premium to
the share price of Henderson Investment before the deal was announced.'
Owners of 70.2 million shares, 9.4 per cent of the
747 million shares not already owned by Henderson Land, voted against the
buyout, said Mr Lam. The votes of 69.2 million shares were needed to block
'We are disappointed, but we are happy that a
majority of the minority shareholders supported the plan,' Mr Lam said. The
company is legally forbidden to make another buyout offer for 12 months, he
Had the buyout of the 24.55 per cent of Henderson
Investment stock in public hands succeeded, Henderson Land would have
directly owned its unit's 36.4 per cent of Hong Kong & China Gas, as
well as stakes in Hong Kong Ferry (Holdings) Ltd and Miramar Hotel &
Investment Co. Henderson Land's profits fell more than half in the year to
June 30 to HK$2.15 billion, as Henderson Investment's profits slid ten per
cent to HK$1.78 billion. Hong Kong & China Gas' profits rose 15 per cent
to HK$1.7 billion in the six months ended June 30.
Investors expect Henderson Investment's shares to
fall when they resume trading. 'It will probably trade close to HK$6, around
the price the stock was trading at before the deal was announced,' said
James Cheng of Asia Strategic Investment Management Ltd. 'I won't buy
Henderson Investment now, because it's going to take a lot longer to realise
Henderson Land and Henderson Investment shares
were suspended pending the vote. Henderson Land shares rose 1.5 per cent to
HK$23.40 in Hong Kong on Dec 31 and Henderson Investment was unchanged at
HK$7.20. - 2003 January 3 Bloomberg
So near, so far for
Management of Henderson Land Development and shareholders of its 73.48 per
cent-held Henderson Investment Ltd (HIL) were bitterly disappointed after
the blue-chip developer's bid to take the investment holding company private
was voted down yesterday.
The margin of votes was so close - it needed only
0.035 per cent more of the issued shares to pass - that Henderson Land
vice-chairman Colin Lam compared the outcome with the last United States
``It was as close to call as the election between
George W Bush [and Al Gore] ... we are very disappointed at the outcome of
the vote,'' Lam said after the three-hour meeting.
Shareholders cast 438 votes at the extraordinary
general meeting, on the developer's proposal to buy the 26.52 per cent
issued share capital it does not already own in HIL, at HK$7.60 per share.
Lam said 383 votes, representing 416.81 million
issued shares or 86 per cent of all shares voted, supported the move. But
for the privatisation to pass, it needed to be opposed by no more than 10
per cent of all shares held by independent minority shareholders. Based on
the company's 24.55 per cent current free float, that worked out to a limit
of not more than 2.455 per cent of its total issued shares.
At the meeting 57 votes, representing 2.49 per
cent of shares, opposed the move.
The HK$5.68 billion deal could have given
Henderson Land more direct control over businesses held by HIL, the cream
being its 36.42 per cent ownership of Hong Kong & China Gas. It
contributed 74.4 per cent of consolidated profit before taxation for the
year to June 2002. HIL also owns 30.98 per cent of transport-property
developer Hong Kong Ferry, 43.67 per cent of property management company
Miramar Hotel and Investment Company, and 66.67 per cent of Henderson Cyber.
Merrill Lynch analyst Clifford Lam said
privatisation would have increased Henderson Land's bottom line by 7 per
cent, enhancing its net asset value and return on equity.
Securities and Futures Commission rules bar
Henderson Land from making another privatisation bid for HIL for 12 months.
``But one thing we noted was that our minority shareholders are very much
supportive of [privatising HIL] ... the board of directors think that we
must take note of it. Our responsibility is to maximise the interests of our
minority shareholders,'' Colin Lam said.
A property analyst at a US brokerage said HIL's share
price would not suffer in future from a wide discount to its net asset
value, despite the result.
Normally, subsidiaries would trade at 40-50 per
cent discounts to parents, he said. But as HIL had rolled in considerable
gains over the past months on the privatisation news, its shares would fall
upon resumption of trading today. They closed at HK$7.25 on December 31
before being suspended from below HK$6 in November.
The offer price of HK$7.60 per share was increased
from an initial HK$7.35 per share amid reports that the deal had been valued
too cheaply. At HK$7.60 it still represented a 28 per cent discount to HIL's
net asset value of HK$10.52 per share.
Among the opponents was fund manager Franklin
Templeton Investments, which runs a combined 20.5 million shares. Colin Lam
said he could ``reasonably believe'' that fund companies' shareholders had
voted against the resolution, many under cover of nominees.
Merrill Lynch's Clifford Lam said the result might
weigh slightly on Henderson Land's share price when it resumed trading
But Sun Hung Kai Financial Group strategist Edmond
Lee said Henderson Land, now trading at a 25 per cent discount to its HK$29
net asset value, still had upside in the short run to HK$25. Henderson Land
closed at HK$23.45 on December 31. - Georgina Lee
3 January 2003
Hong Kong - Templeton Asset Management Ltd, a unit
of Franklin Templeton Investments, has come out strongly against the
proposed privatization of Henderson Investment Limited announced recently.
According to Templeton Asset Management Ltd, the offer price of HK$7.35 is
unattractive and it does not reflect the full value of the net assets held
in each share of Henderson Investment Limited. Templeton indicates that the
offer is disadvantageous to the minority shareholders of Henderson
Investment Limited and if approved, will add to the recent bad publicity on
poor corporate governance in Hong Kong.
Mark Mobius, the Managing Director of Templeton
Asset Management Ltd, said:
"The offer price of HK$7.35 is just too low.
If we calculate only the value of Henderson Investment’s holdings of HK
& China Gas, the value comes to HK$7.76 per share and this is not
counting the holdings in HK Ferry, Miramar Hotel, Henderson Cyber, the two
Newton Hotels and the 1.8 million square feet of investment properties. We
believe the value of all assets less liabilities of Henderson Investment
comes up to at least HK$11.0 per share. The majority shareholders are just
taking advantage of the current poor market sentiments to buy up the company
cheaply and all this at the expense of the minority shareholders."
Templeton Asset Management Ltd is a subsidiary of Franklin Resources Inc.
Franklin Resources, Inc, is a global investment organsation operating as
Franklin Templeton Investments. Franklin Templeton provide global and
domestic investment management services through its Franklin, Templeton,
Mutual Series and Fiduciary Trust subsidiaries. The San Mateo,
California-based company has over 50 years of investment experience and over
US$247 billion in assets under management as of 30 September 2002. -
11 Nov 2002
Henderson Land offered HK$7.35 per share to buy
out the minorities in Henderson Investment - which as we show, is a whopping
40% discount to underlying value of about $12.26 per share. Its stake in HK
& China Gas alone has a market value of $7.76 per HI share. The good
news is that it only takes 2.49% of the company to block the deal, so if you
are an institutional holder, contact us - we need your votes to block it or
get a better deal. - 2002 November 6 David
Henderson Land said its net profit
fell 51 percent in the year to June, lagging expectations as income from new
The company posted a net profit of HK$2.15 billion
(US$276 million), which came in below a consensus forecast of HK$2.5 billion
from Multex Global Estimates.
Henderson Land , which earned HK$4.39 billion in
the previous year, cut its final dividend to 45 HK cents from 55 HK cents.
Its shares eased 0.44 percent to close at HK$22.80
on Thursday before the results announcement.
Analysts had expected the bottom line to be hurt
by sharply lower property sales, as Henderson Land completed just a few
residential projects during the year.
Its turnover fell more than 30 percent to HK$6.23
billion, mainly due to a weak performance from the property development arm,
which saw sales plunge to HK$1.74 billion from HK$5 billion a year earlier.
Profit from that segment slumped to HK$57.84
million from HK$1.46 billion, the company said in a results statement.
The figure came in much worse than market
forecasts, which had ranged from HK$141-349 million. Henderson Land did not
give specific reasons for the steeper than expected decline.
Profit from property leasing, however, edged up to
HK$1.33 billion from HK$1.3 billion.
Shares of profits of associates rose to HK$1.56
billion, while finance costs were more than halved to HK$97.64 million.
Like other property developers in Hong Kong,
Henderson Land has been hit hard by the economic slump. Residential property
prices are now 65 percent below their 1997 peaks, bringing them to levels
last seen in the early 1990s.
Many property firms like Sino Land and Hang Lung
Properties have posted lower earnings in the year to June. Sun Hung Kai
Properties bucked the trend, but only because of lower interest expenses and
higher contributions from associates.
The Hong Kong government said last week it was
considering ways to boost the ailing property market, though it did not give
Analysts said the government would find it hard to
resuscitate the sector, as worries about the economy continued to weigh on
Henderson Land's subsidiaries also turned in a
lacklustre performance in the year ended June. At Henderson Investment , its
73.1 percent-owned subsidiary, net profit fell 10 percent to HK$1.78
Henderson Investment has a stake in Hong Kong and
China Gas Ltd , one of Hong Kong's biggest utilities, and also has interests
in ferry operator Hong Kong Ferry (Holdings) , and hotel firm Miramar Hotel
& Investment .
At Henderson China Holdings Ltd , a unit which
holds Henderson Land's property developments in China, earnings fell 21
percent to HK$132.89 million -
3 October 2002
HONG KONG (Reuters) - Henderson Land, one of Hong
Kong's largest property developers, is expected to post a steep drop in its
full-year earnings on dismal sales and depressed margins.
The company is forecast to report on Thursday a 43
percent plunge in net profit to HK$2.49 billion (US$319 million) for the
year ended June, according to six analysts polled by Reuters.
The consensus forecast from Multex Global
Estimates, which polled 22 analysts, was for a net profit of HK$2.52
Henderson's bottom line will likely be hurt by
sharply lower property sales, as the company completed just a few
residential projects during the year.
This included the Sereno Verde development in the
western New Territories, which analysts said was sold at thin margins.
"There were few large-scale project
completions in FY02 and sales were slower than expected," Salomon Smith
Barney said in a recent research note.
SSB expects Henderson's earnings to fall 46.5
percent year on year to HK$2.35 billion, with profit from property sales
plunging 76 percent to HK$349 million.
Some analysts say Henderson could also take
provisions for a project in rural Tai Po, as its current value is below its
total development cost of about HK$5,000 per square foot.
Rental income is expected to stay flat during the
year, as new investment properties helped to offset lower rents from its
With the forecast drop in earnings, analysts
expect Henderson to share the woes of many of its peers in Hong Kong, which
have been hit hard by the economic slump.
Residential property prices are now 65 percent
below their 1997 peaks, and some analysts expect further downside over the
next year due to anaemic demand and over supply.
Many property firms like Sino Land and Hang Lung
Properties have posted lower earnings in the year through June. Sun Hung Kai
Properties bucked the trend, but only because of lower interest expenses and
higher contributions from associates.
While Henderson is not immune from weakness in the
economy, some analysts say it could do more to speed up stock clearance and
enhance its position in the residential market.
"Henderson has been less aggressive than Sun
Hung Kai and Cheung Kong in launching and selling new projects," DBS
Vickers Securities said in a research note.
Henderson shares were off more than three percent
on Monday afternoon at HK$23.25 and have lost about 34 percent for the year
HIGHER INCOME FROM ASSOCIATES
Outside of property development and investment,
Henderson would likely enjoy higher income from its associate companies,
A key earnings driver would be Hong Kong and China
Gas Ltd , one of Hong Kong's biggest utilities.
The company posted a HK$1.704 billion net profit
for the six months ended June, virtually unchanged from a year earlier and
supported by business growth in China.
Henderson also has interests in ferry operator
Hong Kong Ferry (Holdings) , and hotel firm Miramar Hotel & Investment .
- 2002 September 30
developments in Vancouver
Photo by Peter
Firenze has turned
out to be alright contrary to
press reports of years earlier - 2011
Hong Kong developer ready to
wade into 'duck pond'
Photo by Dan Toulgoet
towers are slated for the property known locally as the duck pond.
It's taken almost a decade, but Hong Kong-based
Henderson Developments is starting to see its Downtown Eastside gamble
The company bought a large patch of land bounded
by Expo Boulevard and East Pender Street and Beatty Street
and Taylor Way in the mid-1990s from Li Ka-shing, who had
acquired the site as part of the Expo '86 lands deal.
In 1999, Henderson built
International Village , a cinema, shopping and residential complex, between Pender and Keefer
streets and Abbott and Taylor way.
At that time the area was struggling with social
disorder and was on the periphery of Chinatown
, leading to several village tenants bailing out of the project. The future
of the mall was uncertain.
However, the area is changing rapidly. The Village
Starbucks faces busy Keefer Street and people now walk their dogs in nearby
Andy Livingstone Park , which was once a place to use and hide drugs.
Vancouver School Board is also considering
building an elementary school near International Village
A sold-out condo tower is under construction at
the corner of Keefer and Taylor, and Henderson will this week seek council approval to develop three towers on a large
block bounded by Andy Livingstone Park Abbott Street and Taylor Way.
The lot can be seen as you drive over the Dunsmuir Street
viaduct and is currently a large hole in the ground filled with water. An
earlier attempt to develop the project was abandoned due to market
Labelled the Firenze
, the proposal is for a 31-storey tower, a 25-storey tower and a six-storey midrise
with retail at grade. Almost all of the 457 units, which range in price from
$170,000 to $730,000, have been pre-sold.
Several hundred metres
away, in a lot just west of General Motors Place,
work on the Costco condo tower development is underway, which will further
revitalize the area.
Henderson now has only one undeveloped lot, which is on
Keefer Street, west of Abbott and is currently used as a carpark.
Albert Fok, chairman
of the Vancouver Chinatown Merchants Association, said business in the area
is starting to improve for merchants.
However, residents of the Taylor and Firenze
projects will not move in until 2006, so the full financial impacts of the
developments will not be known until then.
"What is encouraging is the real will to
revitalize that area," Fok said.
- 2004 July 18 VANCOUVER SUN
Property developer Henderson Land is embroiled in
a controversy in which an upmarket Vancouver shopping centre's tenants claim
the company duped them into renting retail space on false promises that the
mall would be a major attraction.
At least 10 angry tenants who say they have been
financially ruined are taking Henderson to court, accusing the giant
corporation of misrepresentation, mismanagement and defamation.
The group's lawyer, Alan Farber, said more tenants
were expected to join the lawsuit.
The three-storey International Village shopping
centre built by Henderson's Canadian subsidiary has 150 retail spaces, but
has attracted only 34 tenants since its late 1999 opening. More than 10 have
since left, charging that the building had failed to attract the promised
Big-name anchor tenants have shunned the shopping
centre, and fashion houses such as Christian Dior, Versace and Chloe Paris,
that smaller tenants believed would rent space, never did.
"Before I signed my lease, Henderson told me
there would be many big tenants and one entire floor would be occupied by
well-known fashion houses. But it was not true. I trusted Henderson because
it is a big Hong Kong company," said Hong Kong immigrant Karen Chun who
recently shut down her Genki Gift shop in the mall.
Ms Chun said she had lost C$200,000 (about
HK$986,000) in the 21 months the shop was open. "I had to sell my house
to pay my debts."
She said her average monthly sales totalled no
more than C$1,000: "Can you believe it? It's just ridiculous."
She is suing to recover her C$70,000 start-up cost
and other losses.
Mr Farber said the centre attracted fewer than 100
people a day. "The landlord told tenants that other shops in the mall
would open, but it never happened."
He said the building looked unfinished and many
retail spaces were boarded up.
"Tenants put in their life savings to fix up
their stores. They came in based on what the landlord told them. It was a
misrepresentation," Mr Farber said.
Earlier brochures promoting the centre boasted of
a unique international "food market" occupying an entire floor
filled with upmarket restaurants offering cuisine from around the world.
Another floor would be a fashion boulevard filled
with name-brand boutiques.
However, only a floor with cinemas generates
customer traffic and Mr Farber claimed this was of no use to tenants on
other floors. The food market plan has been scrapped.
Bordering Vancouver's Chinatown, the shopping
centre is in one of the city's poorest areas.
Yuet Tong, who heads the Chinatown Merchants'
Association, said the location was partly to blame for the failure:
"It's a bad and poor area, but Henderson wanted high-class
He said he sympathised with the tenants, but felt
Henderson should not have to bear all the blame: "There's always a risk
in business. Each tenant has to factor in this risk. No landlord can
guarantee a profit."
Norman Stowe, a spokesman for Henderson's Canadian
subsidiary, dismissed claims the tenants were tricked into renting shop
space, but conceded the 300,000 square feet shopping centre lacked
"We understand the frustration of some of the
tenants. We're equally frustrated. When tenants are successful, we're
successful. We're in this for the long term," he said. - by MICHAEL CHUGANI in
China Morning Post December 24,
It's two weeks before Christmas and there's almost
as many security guards as customers in the broad, echoing concourses of
Several stores lining the corridors are boarded
up; others are offering massive discounts. Aside from the Starbucks,
7-Eleven and McDonald's outlets on the main floor, which continue to do a
brisk business, the three-level Pender Street mall has been an unmitigated
disaster for most of its retail tenants since it opened in late 1999. Even
before the recent departure of 11 tenants, only 34 of the planned 150 spaces
were ever occupied.
Most businesses that agreed to lease space in the
building believed the mall management's boasts that the upscale centre,
which was supposed to attract major anchor tenants like a microbrewery,
restaurants, fashion designer boutiques and financial institutions, would
take retail to a new level. Little did they know that level would be down.
The microbrewery never materialized, nor did the rumoured arrival of
Christian Dior, Versace, Chloe Paris and Benetton.
Monika Grant and Melissa Mitchell are two former
tenants who've been financially shattered by their 20-month stint in the
unfinished building. The mother-daughter team ran D'Vine Health in the
Village until mounting debt as a result of practically non-existent business
drove them out in mid-November.
On Thursday, the pair, along with former tenants
Orlando and Adriano Papa of Punto E Pasta and Karen Chun of Genki Gifts and
Stationary, and five other mall tenants, including Xtreme Sports Systems,
Charles David, Vana Vietnamese Restaurant, Sofia Restaurant, and Giant
Panda, launched a lawsuit for unspecified damages against Henderson
Development (Canada) Ltd., which built and manages the mall. Henderson is
part of a Hong Kong-based real estate company owned by Lee Shau Kee,
purported to be the 52nd richest man in the world-his fortune is estimated
at $5.9 billion, according to a Forbes Magazine list.
Lawyer Alan Farber, who is representing the former
tenants, anticipates six more will join the legal action, which accuses
Henderson of misrepresentation and mismanagement.
Others, however, say problems with the mall stem
from a fundamental miscalculation-putting exclusive, high-end boutiques in
the city's poorest and most crime-ridden neighbourhood.
"It's the kind of project that might have
achieved success on the corner of Granville and Robson," says retail
consultant Philip Boname. "It was the wrong concept, in the wrong
location at the wrong time."
Boname, president and CEO of Urbanics Consultants
Ltd., apologizes for the files and rolled-up documents littering his office
in a Cardero Street heritage house, noting that he recently returned from a
business trip to China. Under a pile of books, he retrieves an undated copy
of a marketing brochure Henderson produced for International Village.
The effusive brochure depicts a crowded shopping
centre in what it calls the heart of "Vancouver's retailing
opportunity." It includes a second-floor fashion boulevard that
promises a "stunning collage of international styles and designs,"
luring shoppers from all over the world. A first-floor food market,
meanwhile, is billed as combining the excitement of San Francisco, Paris,
Hong Kong and Florence in one location.
The fact those ambitious plans failed to
materialize comes as little surprise to Boname. He and Stanley Kwok, former
deputy chairman for Concord Pacific, had a very different vision for the
property in the late 1980s. Concord, whose chief shareholder was Li
Ka-shing, another Hong Kong billionaire, had acquired the land from the
provincial government following Expo 86, and eventually sold it off to
Before that sale, Kwok dreamed up the notion of an
"international village," working with Boname on a conceptual
design at Concord's request. "Our concept bears little resemblance to
what's transpired," Boname says. "What is there now is neither
international nor village."
Had the duo's idea come to fruition, there would
have been five to 10 times the number of retail spaces, though much smaller
in size than the existing ones. The shops would have had an international
flavour, grouped by ethnicity to produce what Boname describes as an upscale
bazaar. "We wanted representation from all the continents. It would
have been hugely international, in keeping with the cultural mosaic of the
Lower Mainland." Its design would also have been more open and
accessible to the outside streets.
Boname believes the idea, which never moved beyond
the conceptual stage, was more realistic than the village's current
incarnation, although he admits the business climate has altered
considerably over the past 15 years. "In deference to [Henderson
president Allen Lai], circumstances have changed quite dramatically,"
he said, citing the overall economic downturn, demise of Woodward's
department store and deteriorating conditions in the Downtown Eastside.
"Fifteen years ago it wasn't a rosy place but it wasn't what it is
Nonetheless, he pointed out clientele for
higher-end stores generally patronize businesses around the Hotel Vancouver
or on Hastings at the foot of Hornby and Howe, where companies like Birk's
and Cartier ply their trade.
The mall's ability to flourish was further
compromised, he said, by its failure to sign a major anchor tenant.
"You can't expect a project with these kinds of retailing interests to
succeed on the back of traffic generated from cinemas."
Tinseltown, located on the third floor of the
mall, appears to be one of the few enterprises that's profitable. The movie
theatre is run by Cinemark, an American company based out of Dallas. Terrell
Falk, its vice president of marketing and communications, wouldn't reveal
numbers but said, "I can tell you it's a very healthy cinema and it's
outgrown other theatres in the area." But, as Boname points out,
movie-goers aren't the types to pick up a pricey outfit or costly giftware
from an expensive shopping centre before or after a show.
Allan Herbert, a former city councillor who's
involved with several Chinatown revitalization projects, thinks Henderson
can overcome some of its customer traffic problems if it can hold on for at
least another year. He said International Village is a victim of timing,
though Henderson's failure to complete a proposed 1,000-unit apartment block
on land it owns across the street added to its woes. Herbert is convinced,
however, the appeal of the area and, in turn, the shopping centre, will be
bolstered by Chinatown's current revitalization effort, which includes a bid
to the CRTC for a multi-ethnic television station. "[The station] would
be a major injection of activity, drawing hundreds of people. It will make
the area trendy and attract younger people," Herbert said.
Other enhancement projects include the Millennium
Gate, the development of Shanghai Alley and the production of various Asian
festivals, all of which Herbert expects will generate traffic for the area.
"International Village will be part of it and benefit from it," he
said, cautioning, "No one should believe there's a panacea because
That's clear on a rainy winter Wednesday
afternoon. Business is so slow that the man behind the counter at an
eyeglass store is catching up on his reading. But the man, who won't give
his name, hasn't lost hope-he notes a new leasing manager was appointed a
couple of months earlier, arguing management deserves time to turn things
around. "Let them have a chance-it's a nice mall, well-developed."
For now, cheap rent fuels the business's survival,
although he admits his concerns would be further eased if International
Village was advertised more aggressively. In a classic Catch 22,
however, he's been told that won't happen until
most of the shops are leased out. "But if you don't do advertising,
people won't come and the tenants won't come."
It is an attractive building, despite the fact
that part of it remains unfinished. The interior features high ceilings,
spacious common areas and striking art work. Yet it's located in an area
where people are more likely to go to buy heroin than haute couture.
Aesthetics alone can only do so much.
Hardeep Dhunga, manager of Spencer Gifts, one of
the first businesses to open in the mall, thinks the leasing department
should be more open-minded about what shops it accepts. "Looking around
the area, you need to make it like a more normal looking mall," she
said, suggesting mainstream stores like Le Chateau would draw more
customers. "It's a beautiful mall, just take a look around. It's not
too big-you just need stores."
Henderson couldn't agree more. Norman Stowe,
spokesman for International Village, said the company wanted to create a
mall that was different from others in the downtown core, but admits it's
disappointed the plans haven't come to fruition as quickly as it would have
Stowe insists, however, the mall is "in for
the long haul," saying in the next few months, mall management will
re-examine its marketing and sales plans and consider a wide variety of
tenants. "We know we need a critical mass of tenants there to be
successful," he said. "Clearly our goal is to work with our
tenants to be successful. When they're successful, we're successful."
Stowe said the company is disappointed the
ex-tenants have opted for litigation, but added, "At the end of the
day, as with any business people, they have to take some personal
responsibility for their businesses."
In fact, in an unsigned Nov. 20 news release
issued after embittered tenants told their story to the media, Henderson
directly blames poor management by D'Vine Health, Punto E Pasta and Genki
Gifts and Stationary-which it called "dissidents"-for the failure
of their businesses. It contends Henderson has worked tirelessly to lease
out the complex since its inception, and blames poor economic conditions for
exacerbating the mall's problems. It promises, however, that announcements
are pending on the arrival of a new fashion store, restaurant and electronic
retailer, and a new short-term leasing program is being initiated to allow
potential businesses to test the waters.
As for complaints about security-two months ago
demonstrators picketed the mall and handed out pamphlets accusing the
security service of harassing street people-the release said anyone
exhibiting "objectionable" behaviour would be asked to leave, as
in any mall.
"Henderson Development continues to provide a
trading environment in International Village that is welcoming and
energetic," it says, pointing out the mall is providing free parking
validation, extended hours of operation, 24-hour "friendly"
security, co-operative advertising and promotion, community event planning
and financial assistance.
The release infuriated the former tenants. Sitting
at a table in Starbucks with his fellow "dissidents," all of whom
have sold or are in the process of selling their homes to pay off their
debts, Orlando Papa of Punto E Pasta said his restaurant's fate was sealed
by Henderson's failure to live up to its commitment to create an
international market on the first floor. After he was told the market was
cancelled on Sept. 1, 2000, he stopped paying rent.
Grant and Mitchell said they signed a 10-year
lease only after researching the mall thoroughly and being shown a long list
of executed leases. "They've always told us it was 88 per cent
leased," said Grant, who keeps a collection of photos showing signs of
businesses that were supposed to be "coming soon" but never
appeared. Mitchell's husband Darren designed the store from a drafting table
set up in his hospital room-he has since passed away from cancer-after
Henderson pressured the family to start construction.
But once they opened D'Vine, which sold health
supplements, it was apparent customers weren't flocking to the mall. The two
tracked the number of customers over a two-month period, recording an
average of 70 a week. "It's a really frustrating feeling to have a
beautiful store in a crappy mall," Mitchell said. "Three people a
day would walk by our store. It was ridiculous."
Papa estimates his venture cost him more than a
half million dollars. One of his sons was forced to move to Toronto recently
to get a job, even though his children have always worked for the family
businesses, which include a restaurant on Commercial Drive and a catering
operation. "I have to look for a job for the first time in my
Papa said his reputation is also in tatters,
pointing to a rejection letter from Westminster Quay, which refused to enter
discussions with him about opening an outlet there.
Karen Chun of Genki Gifts and Stationary wiped
away tears recounting how she lost her home and livelihood over the course
of 21 months. Before starting up Genki, she lived in a 2,000 square-foot
apartment-her current home is 800 square feet. "I want full
compensation for all my losses. I have no money to start a business
elsewhere, I want to cry," she said. "I'm suffering financially
All claim other tenants were paid to stay in the
mall by Henderson, although none of the three "dissidents"
received a penny. They decided to abandon International Village after
receiving a letter from the company's lawyers saying they had breached their
leases by not paying rent-days later, the company's press release said it
had tried to assist the operators by reducing their rent to help offset
store operating costs.
The former tenants scoff at Henderson's assertion,
which they've cited in their lawsuit as defamatory, that poor management led
to their stores' demise, pointing out both Orlando Papa and Karen Chun have
run successful businesses elsewhere-Chun is part owner of another Genki
Gifts and Stationary store in Library Square. They also dispute Boname's
claims that the mall is too upscale for the area, arguing Henderson's poor
management is at the core of the problem. Grant said the company's other
mall, Henderson Place in Coquitlam, is also in financial dire straits, even
though it's located in a better district. "I don't think this area is
the most important factor as to what went wrong-[Henderson Place] is the
mirror image of this mall," said Grant.
Mitchell called her predicament a nightmare.
"I've lost everything. I've lost my husband and I'm financially ruined.
My parents have had to sell their house. We're not stupid people. We're in a
mess in a situation out of our control."
Boname, for his part, doesn't think International
Village is salvageable as it stands, but speculates a less expensive mall or
urban entertainment centre, comparable to Burnaby's Playdium at Metrotown,
could work in future. He suggests the owners abandon the idea of high-end
retail and get on with residential developments proposed for the currently
empty properties adjacent to the site to create a "quasi-captured
market." "To be very frank, it needs an extensive study. I'm not
sure the solution is doing anything right now. You don't put good money
after bad. The time is not right. In a couple of years it might be, with a
broader range of less expensive retail stores that serve primarily as an
extension of Chinatown. You can't ignore Chinatown, you have to build on
Of course, that won't solve the tenants' problems,
though they hope a judge will. "We have every intention of taking this
to the wall and demanding, through court if necessary, for Henderson to
reimburse us," Grant said.
In the meantime, Henderson may have to deal with
another barrage of negative media coverage. Grant, Mitchell, the Papas and
Chun intend to picket the mall with other tenants, tradespeople and
suppliers Dec. 21. - By Naoibh O'Connor-Staff