Chairman of

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 STANDARD

Police probe Hong Kong luxury flat sale: report

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 flat sale

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 class.

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 survive."

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 big problem."

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," he said.

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 waterfront.

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 government's integrity.

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    

During the last recession, the principals of Henderson Land successfully liquidated 3,800 units they owned in Texas.

$174M Multifamily Sale Closes in Texas
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   Globe St

More than once or twice, the group has attempted to privatize itself.    The organization is led professionally by Vice-Chair, Colin Lam.

Henderson 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 said.

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 Ferry.

``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 January 3     Hong Kong Standard 

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 the deal.

'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 said.

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 its value.'

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 Henderson
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 presidential election.

``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 today.

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  Hong Kong Standard    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."

About Templeton
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. - Webb-site.com  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 Webb  

Henderson Land said its net profit fell 51 percent in the year to June, lagging expectations as income from new developments fell.

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 specific details.

Analysts said the government would find it hard to resuscitate the sector, as worries about the economy continued to weigh on demand.

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 billion.

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       Yahoo!   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 billion.

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 existing portfolio.


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 to date.


Outside of property development and investment, Henderson would likely enjoy higher income from its associate companies, analysts said.

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     Reuter   Yahoo!        


Henderson's developments in Vancouver

  Photo by Peter Schön

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
Three 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 payoff.

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 conditions. 

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 customer traffic.

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 stores."

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 sufficient shoppers.

"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 Seattle  South China Morning Post     December 24, 2001

Devalued village

It's two weeks before Christmas and there's almost as many security guards as customers in the broad, echoing concourses of International Village.

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 Henderson.

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 today."

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 there isn't."

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 liked.

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 life."

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 and emotionally."

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 that dynamic."

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 writer     Vancouver Courier


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