Expert interpretation: Better to be landlord; Rent rising range of commercial building in Kowloon East is 47%.

By Huang Jiamin Renting is a best way out for developer to keep profit when Hong Kong first hand and second hand property market both are dull. Wing Tai Properties Limited (0369) disclosed to media when interpreting the interim performance report yesterday that, 30% of the lessees of Landmark East which is their class A office building in Kwun Tong of Kowloon East will renew the lease with the average rent increasing range is up to 47%. The market is astonished by the growth of the rent. The management even predicted the rent of related properties may strong in the second half year and they are optimistic on rent rising. Wing Tai's related profit sharply increased by nearly 4 times. During the period, the profit before tax of the property investment and management is up to 0.992 billion which sharply increased by nearly 4 times benefiting from the increasing of fair value gains and rent of the property investment. The executive director and managing director (property investing and developing) of the company, Ou Qinglin pointed, the lease term of Landmark East normally is 3 years and the rent which increased by a high range of 47% in this year lays foundation for the company's earning. The reason for such high rising range is because the low base rent caused by abundant supply and low occupation rate of office building in Kowloon East between 2009 and 2010. At the same time, about 19% of the lease will expire in next half year. The company has confidence of maintaining high rising range on rent. Besides, the company has purchased a commercial property in Brook Street West End of London in May with current occupancy rate at 74% which shows the company is turning into a landlord. Ou Qinglin pointed again, it is very difficult to buy land in Hong Kong, so they have to develop other market when Hong Kong property market is dull caused by the Residential Properties(First-hand) Sales Ordinance and strict measures. But he emphasized would not give up Hong Kong market. They just bought the Xiao Xiu land site in Tai Lam of Tuen Mun which has unique topography at HKD 0.563 billion this month. He believed the project on this site will be in good selling because of their developing experience of the Hillgrove in same district. Moreover, the company will put on sale the first hand stock houses in the second half year. The Warren in Tai Hang will possible be relaunched next month, while the Graces．Providence Bay in Pak Shek Kok of Tai Po will expected to be put on sale within this year. 　 Wing Tai announced days before, the net profit in the first half year increased by 128.7% to HKD 1.036 billion. The profit per share is 78 cents. The interim interest rate maintains at 4.2 cents. The income is HKD 0.427 billion which decreased 34.6% by year.

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