HK developers' cash flows seen to weaken

[HONG KONG] Hong Kong developers' cash flows are set to weaken on rising costs and declining margins, as they reduce prices to boost sales of new homes, according to Standard & Poor's.

Developers' margins will probably drop more than 10 per cent in the next 12 to 18 months due to higher land and construction costs and lower selling prices, the credit rating company said in a statement yesterday.

Hong Kong builders, including the city's two biggest, Sun Hung Kai Properties Ltd and Cheung Kong Holdings Ltd, last year sold the fewest residential units in almost two decades as the city's government stepped up measures to curb prices in the world's most expensive place to buy a home.