Wait for it

Capital Estate Ltd., a company chaired by local businessman Sio Tak Hong, is still awaiting government approval to develop a luxury project near Nam Vam Lake, the company’s latest interim report informs.
The information of the filing first reported by local news broadcaster TDM reveals that the group still owns a 5 per cent interest in land located at Avenida Commercial de Macau through ‘an investee company’, with Capital Estate planning to develop a luxurious residential building on the waterfront of Nam Van Lake, with a maximum permitted gross floor area of approximately 55,800 square metres.

Getting paid
The group also revealed in the filing that it has received HK$90 million (US$11.53 million) in repayment installments from Kong Kei Construction Limited as of September 30, related to the loss of property development rights of a 9,553 square metre land plot in Nossa Sra. de Ka Ho in Coloane.
Capital Estate owned the land through its wholly owned subsidiary Sun Fat Investment and Industry Company Limited, and states in the filing that it has submitted application and development plans regarding the plot to the relevant Macau Government authorities since 2007, having not received government approval to start construction until the concession expired in March 2014.
The group’s plans for the land plot initially involved the construction of a steel-casting factory, with a proposal made in 2012 to develop a low-density development of luxury villas occupying an area of 4,400 square metres, which was refused by the MSAR Government.
In August 2016, Sun Fat received a notification from the Land, Public Works and Transport Bureau (DSSOPT) announcing that the valid period of the land grant had expired, with the land reverting to the MSAR Government with no compensation provided to the company.
A judicial appeal to the Court of Second Instance of Macau and a statement of objection with the Chief Executive made by Sun Fat failed to reverse the decision, with another judicial appeal having been filed in September last year.
After Sun Fat’s land title was deregistered in July 2016, the group entered into deeds of settlement with Kong Kei – which sold Capital Estate the equity rights for Sun Fat – reaching an agreement for the HK$298 million repayment.
The filing states that Sun Fat still ‘continues to seek legal advice as to the possible steps that can be taken’.
Capital Estate is expected to receive HK$298 million from Kong Kei and a warrantor in three installments, with HK$60 million having been paid in 2016, and HK$120 million to be repaid by December 31 of this year, plus HK$118 million more by December 31, 2018.
The received HK$90 million helped Capital Estate register HK$60.3 million in profits, after posting HK$133.6 million in losses in the same period of last year.

Hotel operations

Capital Estate also owns at a 32.5 per cent interest in Hotel Fortuna through Tin Fok Holding Company Limited, with the group saying the property maintained a high occupancy rate of almost 90 per cent and saw HK$216.4 million in turnover in 2016.
The group’s registered gross proceeds decreased by 42.5 per cent yearly to reach HK$124.9 million in the financial year ending July 31, with 66 per cent contributed by hotel operations.