Hengqin begins fast-paced ride to development
Hundreds of workers are racing against time along a new, palm-lined road leading to the southeastern section of the Hengqin New Area, next to Macau, to put the final touches on Asia's largest theme park before its first phase opens to the public later this year.
Billed as the "Orlando of China", Chimelong Ocean Kingdom is seeking to emulate the Florida city that has become one of the most popular holiday destinations in the United States after evolving from a sugarcane and citrus plantation hub. Much of the credit for that transformation belongs to the development of three theme parks: Universal Orlando Resort, SeaWorld Orlando and Walt Disney World.
Chimelong Ocean Kingdom is one of two big projects springing up on Zhuhai's biggest island. The 20 billion yuan (HK$25.1 billion) theme park, which will feature a 1,888-room hotel and China's longest wooden roller-coaster, is just a stone's throw from a University of Macau campus that is due to open this autumn.
The opening of the two projects will certainly put the 106-square-kilometre island, a former oyster bed, under the spotlight. But whether Hengqin can turn itself into a tourism, education, creative/cultural and traditional Chinese medicine hub and achieve its target of attracting up to 30 million visitors a year remains to be seen.
Hong Kong developers and mainland enterprises are taking a huge bet that it will succeed and are pouring hundreds of billions of yuan into transforming the virgin land into a holiday paradise.
"Hengqin will provide vital support to Macau, which sorely lacks land for further expansion, while Qianhai [in Shenzhen] will lend support to Hong Kong," said Chew Fook Aun, chairman of the Lai Fung Holdings, the mainland property arm of Lai Sun Development.
The island is three times larger than Macau, where hotels and infrastructure have been stretched to bursting by an influx of 28 million visitors a year, and will be a mere 10-minute ride from western Macau and 30 minutes from Hong Kong after the Hong Kong-Zhuhai-Macau bridge opens in 2016.
On August 21, the Zhuhai Land and Property Exchange Centre offered a 130,173 square metre site designated for creative/cultural industry and commercial purposes in Hengqin with a floor price of 2.6 billion yuan. Bidding for the site is restricted to Hong Kong-listed firms with a movie circulation licence and at least 10 years' experience in movie production or the organisation of large concerts.
Chew said Lai Fung and eSun, which have investments in media, movies and music production, would submit a bid for the site. "Our initial idea is the site is good for building a creative/cultural city where we can hold a film festival each year, something comparable to the world-renowned Cannes film festival," he said.
In the past three years, 27 sites on Hengqin have sold for a total of close to 21 billion yuan.
In July, Shun Tak Holdings, the flagship of casino mogul Stanley Ho Hung-sun, won a 23,834 square metre site for 721 million yuan, or 5,500 yuan a square metre. It plans to start work on the site, a few minutes' drive from Macau's Cotai Strip, late this year. The development will include offices, hotel accommodation, commercial space and serviced apartments.
Also in July, a commercial-residential site which could yield a total gross floor area of 242,382 square metres, was sold to a subsidiary of the Guangdong Hakka Trade Union, which is involved in property development, hi-tech products and mining, for 3.84 billion yuan, or 15,874 yuan a square metre, making it the most expensive site in Zhuhai.
That compares with the 36.7 million yuan (118 yuan a square metre) paid by the Chime-Long Group, a theme park conglomerate based in Guangzhou's Panyu district, for the first lot offered for sale in Hengqin. The 388,344 square metre site is today's Chimelong Ocean Kingdom.
Some critics have expressed concern that Hengqin may end up as nothing more than a large, upmarket property development.
Liao Qun, chief economist and strategist at Citic Bank International, said Zhuhai hoped Hengqin would become a new economic growth driver for the city, which has been lagging behind nearby Shenzhen.
"But it still needs time to observe," he said. "Yes, Hengqin has potential for development such as eco-tourism or innovative industries but its future may not be as sparkling as Qianhai in Shenzhen, where the focus is on financial services development."
Niu Jing, director of the Hengqin New Area's administrative committee, is seeking more Hong Kong and Macau companies to invest in Hengqin and help it develop into a non-casino tourism, financial, traditional Chinese medicine, health care, culture and hi-tech industrial hub handling 20 million to 30 million visitors a year in the next few years.
"Hengqin targets to grow its population from 7,000 now to 280,000 by 2020," he said. "We need to build a lot of buildings for commercial, residential, hotels and other facilities in the coming years . While Macau is our closest neighbour, Hong Kong is our partner."
He said Hengqin would "soon" issue 1.5 billion yuan in dim sum bonds in Hong Kong and was planning to list a portfolio of property and infrastructure projects on the city's stock exchange next year for about 2 billion yuan in proceeds.
He added that there were 56 ongoing projects in Hengqin involving a total investment of 226.3 billion yuan.
One of them, a six billion yuan University of Macau campus that will house 10,000 students, will start to accept students this autumn.
Niu said the campus would be managed by the University of Macau under Macau law. "The University of Macau is the first cross-border university and this is a kind of one country, two systems deal," he said.
To attract financial institutions, he said Hengqin had lowered the entry threshold for Macau banks, which would need only US$4 billion in assets to apply to set up a branch, compared with the normal threshold of US$6 billion.
However Joseph Tong Tang, executive director of Sun Hung Kai Financial, said Hengqin could be a good place for the tourist industry but not for the financial sector.
"To banks and brokers, Qianhai is more attractive as it is closer to Hong Kong," he said.