HK landlords secure yuan transfer deal
Hong Kong landlords of Shanghai properties will soon have an official channel through which they can transfer rent payments back here, according to a property agent in Shanghai.
At present, Hong Kong owners of mainland properties who receive rent in yuan are not allowed to repatriate the proceeds.
Shanghai Real Estate Consultant & Sales director and vice-president John Woo said yesterday the firm had reached an agreement with a mainland bank to provide a direct channel for Hong Kong landlords to receive their rental income from Shanghai.
Mr Woo, however, declined to name the bank or disclose details of the arrangement.
He said the bank 'had basically agreed with the idea, which would be implemented as early as late November'.
'I think the mainland bank must have had consent from the government before promising us anything,' Mr Woo said.
He also declined to say if the agreement applied to other mainland cities.
'It will be a big move, that's all I can say,' Mr Woo said.
The agreement highlights the issue of cash being brought across the border from the mainland through informal channels.
Although foreign-exchange controls forbid yuan flowing out of the mainland, property agents said Hong Kong landlords were already transferring their rental income through unofficial methods.
Gary Lee King-fung of Centaline (China) Property Consultants said some landlords transferred their rental income through mainland money changers while others brought the funds to Hong Kong themselves.
Mr Lee said the setting up of an official channel would boost Hong Kong investors' confidence in the mainland property market.
'No one prefers a shabby exchange shop around the corner to an established bank,' he said.