Hang Lung Properties, which has HK$65.89 billion in investment on the mainland, is finding local governments more willing to sell land, chairman Ronnie Chan Chichung said.
"It has definitely gotten easier," said Chan, whose company derives half of its rental earnings from its shopping centres on the mainland. "The local governments want to sell more and you have developers who are eager to buy."
The value of land transactions on the mainland rose to 96.4 billion yuan (HK$118.2 billion) last month, the highest this year, as developers expect home prices to recover after two central bank interest rates cuts in June and July.
Prices rose last month for a third consecutive month, said SouFun Holdings, the nation's biggest real estate website owner.
Developers with improved sales and cash flows are showing renewed interest in land acquisitions. Seven of the country's biggest developers by market value, including China Vanke, bought land worth 8.9 billion yuan in major cities in the first week of this month, China Daily reported last week.
"We have never stopped negotiating; the question is whether we are going to bite or not," said Chan. "Our situation is a bit different because we want our sites to be in the best location. So if you want something that's tailor-made, it obviously would take longer."
Hang Lung last bought a site in Kunming in September last year, its first land purchase in the country in more than two years.
Chan said in August last year the company was "financially capable" of increasing its initial investment on the mainland to tap the country's growing luxury spending.
The company, which is planning to open at least one property in mainland cities every year, will next week open its second shopping centre in Shenyang. Hang Lung also has projects in Dalian, Jinan, Wuxi, Tianjin and Kunming.
The mainland's economy expanded 7.6 per cent in the second quarter from a year earlier, the slowest pace in three years, as Europe's debt crisis crimped exports and the government's property crackdown cooled domestic demand.
The slowdown may extend into a seventh quarter, according to Deutsche Bank, which cut its growth estimate for the world's second-largest economy to 7.5 per cent for the three months to September from 7.9 per cent.
"With consumption down, obviously growth in rental wouldn't be too strong," Chan said. "But we don't have a problem renting our spots out."
Rental profit from the mainland, which includes shopping centres in Shanghai, Jinan and Shenyang, rose 26 per cent to HK$1.17 billion in the first half, Hang Lung said in July.
The mainland has more than 1,000 county-level governments and hundreds of city and municipal councils that rely on revenue from local taxes, land sales and central-government transfers because rules bar most of them from selling bonds. Land sales made up 30 per cent of local government revenue and in some cities accounted for more than half, according to a report by UBS in June last year.Topics: Hang Lung Properties Real Estate Property