Cheung Kong eyes mainland bargains
Cheung Kong (Holdings) sees buying opportunities in the mainland's property sector next year as market liquidity is expected to get progressively tighter, says Justin Chiu Kwok-hung, an executive director at the firm.
Beijing was unlikely to ease its monetary policy in the next nine to 12 months in a bid to stabilise the housing market, Chiu said yesterday at the MIPIM Asia real estate conference.
Chiu said he did not expect major policy changes on the mainland before next year's political leadership shuffle, unless Europe's debt crisis and the United States' economic woes hurt demand for mainland exports. Furthermore, the new political leaders were unlikely to make drastic policy changes in the initial few months of taking office, he said.
The ensuing tight credit environment would constitute 'a golden time for Cheung Kong', Chiu said. 'We are actually looking at acquisition [opportunities],' he said.
Cheung Kong, tycoon Li Ka-shing's flagship firm, has received several proposals from developers and fund managers, who are facing liquidity pressure because of Beijing's credit curbs, according to Chiu.
In the past year, Beijing introduced a series of measures to cool consumer and property prices, including restrictions on the amount of money banks can lend, as well as raising interest rates.
Chiu said he believed the mainland property market would stabilise, as demand remained strong while the economy was robust. He also said he did not expect property prices to decline in Hong Kong because of firm demand.
'Ninety per cent of the flats we launched have been sold,' Chiu said, adding that Cheung Kong had sold more than 3,600 units this year.
However, Goodwin Gaw, a managing principal of Gaw Capital Partners, a Hong Kong-based private equity real estate firm, said he expected home prices to 'roll back' 10 to 15 per cent because prices were overvalued last year.
But Gaw, also at the conference yesterday, said he did not foresee a sharp correction because of low interest rates and the city's stable economy.