* Underlying profit up 17.1 pct to HK$30.40 bln
* Total contracted sales down 12 pct to HK$46 bln
* Warning of challenges comes as city braces for cooldown in housing prices (Recasts, adds contracted sales figures)
By Venus Wu
HONG KONG, Sept 13 (Reuters) - Sun Hung Kai Properties , the most valuable developer in property-obsessed Hong Kong, reported higher full-year profit on Thursday but said new regulations and global economic uncertainties could challenge the local housing market.
The warning from SHKP’s chairman and one of Hong Kong’s richest men, Raymond Kwok, came as the world’s least affordable housing market braces for a cooldown in prices after a record-breaking 28-month climb.
“External uncertainty and government measures recently introduced are likely to pose new challenges in the first-hand market,” Kwok said in a statement filed to the Hong Kong Stock Exchange.
Hong Kong’s government in late June proposed a vacancy tax on empty new homes aimed at discouraging developers from hoarding.
The impact of global trade conflicts and reversals of quantitative easing could undermine global economic growth and hurt business, Kwok said.
He also said wealth accumulation and rising household income should continue to underpin end-user demand for residential properties, despite anticipated interest rate hikes.
Higher contributions from property sales and rental income helped SHKP rake in an underlying profit of HK$30.40 billion ($3.87 billion) in the year ended June 30, up 17.1 percent from the previous year.
The underlying profit excludes the net effect of changes in the valuation of investment properties. The reported profit figure matched an average forecast of HK$29.74 billion by 16 analysts polled by Thomson Reuters Smart Estimates.
Total contracted sales, which include development projects in mainland China, dropped 12 percent to HK$46 billion from last year’s record level.
Sales in Hong Kong fell 7 percent to HK$41.6 billion but the company said it was confident of achieving a medium-term annual target of HK$40 billion in property sales there.
SHKP made headlines in May when it paid a record HK$25.16 billion ($3.2 billion) for a residential plot in Kai Tak, home to the city’s former airport and now a land-bidding battleground that constantly churns out record-breaking prices.
The company’s shares ended 1.5 percent higher on Thursday ahead of the results, compared with the benchmark Hang Seng Index’s 2.54 percent advance. ($1 = 7.8489 Hong Kong dollars) (Reporting by Venus Wu; Editing by Gopakumar Warrier and Sai Sachin Ravikumar)