Hysan Development said that the occupancy of its office buildings reached 99 percent in the first four months of this year.

The Hong Kong property developer's chairman, Peter Lee Ting-chang, said he is optimistic about the company's rental outlook in the second half, saying the overall rentals for the year could grow by double digits.

Lee said that the company's three main fronts - office, retail and residential - saw satisfactory performances through April.

AIA Plaza, one of Hysan Development Co Ltd's holdings, is seen in Hong Kong. Hysan's three main rental fronts - offices, retail and residential - saw satisfactory performances in the first four months of 2008. Bloomberg

In addition to the 99 percent occupancy in office space, it's retail units also were 99 percent filled, and its residential units were 92 percent filled. "Unless the economy suddenly turns around, the prospect of the rental market remains optimistic in the second half," Lee said.

He downplayed the significance of any challenge that might arise as an influx in office supply is expected in Kowloon East.

"The market-positioning of the offices in the area is different from ours, and it will not pose a direct competition," he said.

Hysan Executive Director Pauline Wong said that the rentals for some of its office tenants have been more than doubled upon their contract renewals.

As for the Hennessy Centre, Lee said the building renovations are still under way, and the completion is scheduled for 2011.

Lee said the renovation costs are hard to estimate in the current stage, but he said the cost will account for just a handful of the company's expenses.

Hysan Executive Director Ricky Tang said the company has a credit limit of about HK$3 billion.

Together with the HK$2 billion in securities assets, the company has no urgent need to leverage the market.

Lee dismissed the criticisms that the company has adopted a conservative attitude toward mainland expansion.

"Mainland land prices are not cheap any more," he said. "Therefore, we have to be prudent in choosing an appropriate location."

A shareholder in the annual general meeting yesterday urged the company's board to increase the dividend payout.

Lee said that the company weighs the interests of shareholders and the company's financial needs when determining the dividend.

(HK Edition 05/15/2008 page2)