HONG KONG DAILY PRESS
BENT COMMISSION REPORT
(Continged from Page 11
GENERAL
H. K. ENGINEERING AND
TENANTS IN PREMISES CONSTRUCTION MEETING
SUPERIOR TO NORMAL"
Reaped Benefit Of Slump By Threatening To Quit
"DURING THE YEARS of severe depression, property owners were left with great numbers of vacant tenements on their hands, and were glad to find tenants at rentals which did not yield an economie return on capital outlay" states the report, of the Rent Commis- sion in discpasing the reasons for and the extent of the rise in redty. "Many tenäntä availed themselves of this position to move into a class of premises considerably superior to that which they would normally occupy, and when, with the increased demand for ac- commodation due mainly, but probably not entirely. to the outbreak of the present Sino-Japanese hostilles, rents began to show an up- ward tendency, these tenants found themselves faced with demands for rentals which they could not afford to meet but which were not In the great majority of cases at all exorbitant having regard to the class of property in respect of which they were charged. "THE GOVERNMENT ASSESSOR OF RATES gave us an example in his evidence of flats let in Wournelchong for $145 per month four or Ave years ago. fetching after the slump and until the commence- ment of the upward tendency only $10 per month, and later made the rerieral statement that in some cases where he had found what ap--- peared to be a very heavy increase in rent, investigation had shown that during the depression rents were excessively low for the class of property concerned. If a more normal level of rental were taken as a standard, there was in fact no excessive increase.
"Many other tenants did not, yond the 1937 level, had not reach- move from their residences, but cd the 1933-1934 level and in 5 reaped the benefit of the slump by cases we were already aware that threatening to quit unless their bare notice to quit had been landlords reduced the existing given.
their hands.
BELOW PRE-DEPRESSION
RATES
||
•
Company's Admirable Rents Attitude
It bas been to share in the increased business resulting from the abnormal con- ditions prevailing since early autumn of last year, ours is of a nature still requiring a good deal of spade work-literal and figurative-and not a little patience before the traition of our labours can be ex- pected to reap the full measure of their reward,” said Mr. J. P. Braga,, UBE, presiding at the annual meeting of the Hong Kong Engineer- ing and Construction Company Ltd., yesterday,
"UnNka those companies whose good fortune
Mr. Braga was supported by nouses had just then been com- Messrs MH. Lo and T.F. Lo (slter-pleted before the sudden, large and nate Director for Sir Robert Ho temporary increase of the Colony's (Tung), and Mr. Lawrence Kadoorie population. Only tentative en- (Alternate Director for Bir Ely quiries had been received early in Kadoorie, K.BE), Mr. H. Brags, August from local residents for the [General Works Manager) and lease of those houses. Upon being B Alves (Secretary),
approached soon after by visitors Shareholders present were: to the Colony, your Board main- Mesra A. M. Braga, Noel Braga, tained a fair attitude towards "all Chan Kam-moon, H. J. M. de alike. Figueiredo, M. A. de Figueiredo, E. Sahmet. H. R. Sequeira, and 8. M Bander.
Two alternatives were offe; ed: the Ars, the rent that had been quoted to resident applicants on
merited Com-
sideration was not dented them.
I have been at some length in Including this matter in the Chair- man's speech in order to ilus- trate that the Board's policy is one that is dictated not by tempt-
THURSDAY, APRIL 14, 1938. —PAGE 7
LIGHT WEIGHT COTTON MESH
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The House of Quality & Service
In the course of his speech, Mr. yearly leases; and the second, a Braga said:-
slightly higher rent for shorter The Pront and Loss Account re-tensncles, subject, to a reduction reals at the close of last year a to the level of a yearly rent upon balance at credit of $2.510.93; this the expiration of six months and added to the amount brought tar-renewable thereafter for a period ward from 1936 gives a total ofjur not jess than one year. $4,034.96. The proposal to carry Our explanation, which WAS forward this sum to a new account found perfectly satisfactory, is that as from the 1st January, 1938, It a small "difference in rent in the rents. The landlords were forced "Of the 8 cases showing an in- my purpose to bring up presently second alternative was necessary to agree to reduction in order to crease over the 1933-1934 level. for your approval.
to' provide for the loss of--one avoid being left with empty and one related to a factory, one to a
To deal first with the construc month's rext and the cost of minor wholly unremunerative premises on school and one, we learned frotional branch of your business, repairs-upon-app vacancy follow.
the landlord, was really a notice though no large profits have been ing a six months' lease. "The Government Assessor of to quit. Or the 5 remaining cases, made, we feel that there is ground
FAIR PLAY Rates summed up this, aspect of the Increases over the 1933-1934 for satisfaction that the caution In the case of those residents the situation in his evidence in the level were either smal: cr, in re-exercised by your Board has pre-who had entered into lenses early words "tenants have for the pastilation to the class of premises con vented any losses due to the sud- last year, and which expired at the few years been holding a pistol to Icerned. not excessive.
den"and abnormal fise in the cost end of 1937, the option was given the landlords' beads”.
NO POSSIBILITY OF BIAS or building materials-in partiet them to renew the lease upon identical terms and conditions, "As regards the 168 cases re-flat, items of steel manufacture..
NEW BUILDING
even though the houseg might maining after deducting the 45
We are happy to think that the obviously have fetched more from "A prominent member of the cases of which there were exact
tenants. Our Chinese community, whom we in-assessinent figures for the years conadence reposed in your Com-new. non-resident vited to give evidence, stated that 1933 and 1937, we were in some pany by substantial clients has re-object was fully attained in ob-
those who, up to November, 1937. beyond difficulty, for assessments had sulted in the award of a contract viating hardship on which date he had not pursued en- often been made on whole houses for the erection of an important after all, have frst claim to con- quiries statistics showed that and we had therefore in such cases building, on a footing of reciprocal sideration. Their rentals had not gone back to pre-to make.an estimate of noor rents benefit between principals and depression, Agures.
by having regard to the rent of the contractors, whereby our Company "We next investigated the re-whole house and inquiring what by working on a smaller margin cords at the office of the Govern rents were the basis of assessment proft, escapes the risk of any loss. "House Rents" appears for the ment Assessor of Rates from 1928 for comparative foots in the
first time on the credit side of the or, in the case of new buildings, neighbourhood. from the Arst assessment, until the "In order to avoid any possibility Proft and Loss Account. For the ing opportunism but by fair play, for the excellent spirit of har present time, paying particular at-of bias, we made this estimate current year we might expect a which, we hope will not fall of monious relations that prevades all tention to the premises referred to without having the figures given larger revenue from this source appreciation by those very patrons grades. by landlords and tenants in their by landlords and tenants before us. The amount earned during 1937 is from the greater development of
then proposed
written or oral statements.
and with some doubt we consider $7,529.86.
your Estate in the long run is the adoption of the Report and We are seeking to make of designed to serve, "Of some 269 addresses some of that in 23 cases the reni has been
accounts as presented. This was which probably included several raised above the 1933-1934 level; in "Rent" the mainstay of the Com- We hope also successfully to en-seconded by Mr. M. H. Lo and un- floors, only 213 provided sufficient 22 cases has been restored to that pany's revenue in future: it has ust a wiser circle of goodwill with animously passed. data upon which to base any con- level; in 52 cases has been raised the advantage of stability without the encouraging growth of the Sir Robert Ho Tung. K., and Sir clusions whatever. In only 45 of above the 1937 level, but has not the extraneous influences govern- Company's business upon the sure Elly Kadoorte KBE were these 213 cases did the Govern- yet reached the 1933-1934 level and log contractual orders. You might foundation of mutual and recipro-elected Directors and Messrs. Lowe, ment Assessor's records of assess-in 2 cases has been raised above probably like to have a word or cal service between landlords and Bingham and Matthews were re- ment show definite figures for 1933 the 1937 level with do figures of two from me on this subject of tenants. and 1937, the figure for 1937 being pre-depression rentals available. rents, which has recently come to
PLANS OF ESTATE - confirmed by the tenant, who alio "In 36 cases we were already so much publie and official atten-
Before leaving the subject of the provided a figure for 1938.
An extraordinary gateral meet- aware that hare notice to quit had lon
Estate, you may be pleased to bear "Of the 45 cases, 8 showed an been given The remaining 2 cases" It is in no spirit of, vainglory that two more large houses are ap-for was called after the conclusion increase of rent above the 1933-jare probably increases to a high that your Board can appear before preaching completion and another of the ordinary meeting.
Mr. Braga, presiding, said: 1934 level; 11 showed a return to rent with a view to getting rid of its patrons, the Government, and block of semi-detached houses, but that level; 17, while increased be- the tenant.
the public of this Colony with a of a larger type than those now in
By advertiseient in the local has clear conscience on this highly de-occupation, will follow soon after. English newspapers notice batable question of house rents.
Plans for further bulidings are now been duly given you of the proposal in the hands of the Building Au- embodied in the Resolution which thority; at others are in early the Secretary has just read. contemplation.
If you pass the Resolution, as I I think I can confidently lead hope you will in the best interests you to expect that by the end of of the Company, all we seek to do The figures quoted above may the current year the number of a to increase the present capital require some modification at the houses completed within the Estate of the Company from $1,800,000 to present time, but it is abundantly will make a useful contribution to $5,000,000 by the creation of 2,000, clear that any measure which your Company's revenue. To pro- 990 new shares of the nominal would have the effect of depriving vide & pleasing variation our value of $2 oncli
41
PROPERTY OWNERS NOT. RECEIVING REASONABLE INCOME
"WITHOUT UNDULY DELAYING this report it is impossible fully,
to analyse the mass of figures we received, but we have no doubt whatever that in the great majority of cases property owners have not been receiving a reasonable income from their property invest- ments, and have not for several years earned a figure approaching 7 per cent. on capital outlay," state the Commissioners on the question of landlords” réturn on capital.
"IT SHOULD BE REMEMBERED that in many cases the possession of one or two houses is the sole means of livelihood of the owners. In some instances property owners may have been somewhat over- generous in their estimates of capital outlay, but the contentions of the larger property owners were exceedingly well documented, "and we do not feel that there has been any substantial attempt to mis- lead ds on this bead.
RENTS STAND
In the prosecution of the second stage of the development of your Estate a block of semi-detached
The Chairman
TC-
elected auditors.
CAPITAL INCREASE
those persons whose capital is architectural brandhi has just com- I should explain that while the locked up in land of a fair return pleted the plan for an attractive capital would be so increased there on their money, must necessarily bungalow of the adapted "Olde is no Idea of calling in forthwith be detrimental to the general well Englishe" type."
anything like the sum which the being of the Colony.
Severe as was the typhoon on capital of the Company will repre- "We ascertained from official re-the morning of the 2nd Beptember sent once the Resolution is passed. cords covering the years 1820-1926. Last, I am happy to inform you We will call in from time to time Curing which time the principle of that only minor damage was gur-so much of the capital only as it
h
"At the cutset of this part of our clable portion of the assets of such rent restriction was fully debated, fered by a few of the houses; required for the purposes of our Report, we desire to quote the fol- companies is represented by pro-and restrictive legislation was en-others stood the severity of the re-development and "for any other lowing extract from the Report of perty. Similarly, the estimated acted and permitted to expire, that cord 187 m.p.h, wind and the rain' that may appear to us advisable the Economic Commission publish- total value of money invested in it was then conceded that a net that fallowed without any damage in which capital of the Company ed as Sessional Paper No. 3 of Chinese factories or in Chinese return of 8 per cent. on capital at all Our small list or claims can be usefully and profitably em- 1935
industry in the Colony amounts outlay was a fair return,
was promptly, met by the In-plored. "2...
OBLIGATION TO GOVERNMENT In 1934 the rateable to about $50,000,000 which is "The Government Assessor, ofsurance Company.
FINÁL CALL
"You already show that the Com- value (Le.. of the Colony) stood at only a comparatively small sum. Pates stated in evidence that in 338,841.856. This figure capitalized Here again; a substantial portion1923 and onward for some years, Almost the entire amount of the paby has its obligation" to "Govern- on the baals of 7 per cent. per an-of such money is undoubtedly re-it was customary for values in Final Call, made on 30th Novem-ment in respect of the building rum represents an investment in presented by the property or bulld-Hong Kong to work on the as-ber last, has been received. Only covenant stipulated under the rateable property of no less than fags of such factories. !
sumption of 8 per cent, clear pro-the small sum of $2.450.50 remains Special Conditions of Sale of K.LLS $550,000,000. This huge sum, large 5 The total note issue, which is fit for Chiriese tenements and pro- unpaid this I anticipate no dif- 2657. The prst stage of this deve- culty in getting in le due course.lopment that is" alte formation, is as it is, does not include very con-backed by silver and by sterling perty generally. alderable property owned by the securities, amounts to about $160,
The Sundry Debtors Item of $35,- | now completed. We have already "In answer to our question whe local Government, the Navy or the (000,000 but even this sum, large as ther, that might at pregent be re- 251.98 is all good, and our padry begun the second stage, that is to War Department, or all similar it may appear, is for the most part garded as a fair figure, he ex-Creditora at 31st December 45 y, the execgon of buses within property which is not included for held outside the Colony and only pressed the opinion that 7 per cent.823.38--Have all been paid since the Estate.
a small portion (authoritatively clear profit would be a more rea-the beginning of the year. (u "Those of you who have visited Assessment
Those whose business it has been this property will have been con- 13. As it is not generally appre-estimated at 25 per cent.) is owned sonable average to work op clated how large a portion of the within the Colday, the Metagen "A Chinese witness, the whole of to be in daily contact with the vinced of the ukabilly and ex- wealth of the Colony is Lavested in *8 (bese comparative figures whose evidence greatly impressed members of the staff both Euro-cellence of the design and accom property, comparison of this serve to make it abundantly clear us, agreed that an average re-peans and Chinese-appreciate to modation propiced by the houses -Jozqroing, Agure with some of the that a very large portion; iz/not | turn of 7 per cent. was the normal the full the real energy and co- and the materials of which they ather large categories: of invest the bulk of the wealth of the Co-return for investments in house operation that have combined to are constructed We shall en- ment may be of yakis.
lony, la represented by property. property, and added that any less wards so much of their emetency, deavour to maintain the high 4. For example, the total market17. What this must be so is hard-return would not attract private When its remembered that the standard of workmanship and value of the shares of local com- ly surprising in a territory where enterprise. The witness pointed staff especially in the technical material we have set for ourselves. The Resolution was proposed and panies (other than financial in there is little agriculture, almost a out that at the present time 8 per department, has been largely aug- stitution) listed by the Stock Ex-complete absence of any trace of cent, or 8 per cept could be ob-mented In the course of the year, seconded by Mt. Braga and her change amounts to approximately mineral wealth, and where indus-tained on shares without difficulty, your Board feel that a special word Lawrence Kadoore respectively $150,009,000, although an appre-try is still only in its infancy. Continned on Page 11
of thanks 1s: due, to one and all and passed by the meeting.
Mens
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