SINGAPORE (Reuters) - Hong Kong's Cheung Kong (Holdings) Ltd. (0001.HK: Quote, Profile, Research) expects mainland China to account for a third of its property earnings by 2010, with a company executive saying asset price bubbles are encouraging middle class homebuyers.
Executive Director Justin Chiu told Reuters on Tuesday that Hong Kong's biggest property firm had built up a land bank of 120-130 million square feet in China -- enough for five to seven years of development.
That would help lift income from China quickly from the current 18 percent of the company's property earnings.
"It will grow to around 30 percent in three years' time," Chiu said. "We all know that the next phase of growth is in China," he added, referring to Hong Kong developers.
In an interview during the Reuters Real Estate Summit in Singapore, Chiu said the firm's China projects were "very profitable" but declined to disclose average margins or investment figures.
Fast rising prices in many second-tier Chinese cities were encouraging homebuyers, Chiu said, and would not reach dangerous levels as long as the government continued to implement cooling measures moderately.
"If there are no bubbles, you don't want to drink the beer," Chiu said. "It's just plain water, and there's no incentive to invest."
Last year, Cheung Kong's property earnings from China jumped 69 percent to HK$1.18 billion (US$151 million) -- around 18 percent of total property earnings.
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