Hong Kong developer K Wah International has jumped on the bandwagon of the free-trade zone in Shanghai, hoping its upcoming residential project near the zone may anchor its expansion plans in the mainland's commercial hub.
K Wah plans to start construction soon of a residential complex with a ground floor area of about 30,000 square metres at Jinqiao, which is just a few kilometres from the free-trade zone.
The zone is envisaged by Shanghai as a "mini-Hong Kong" that will further integrate the city into the global economy.
The development at Jinqiao would benefit from the fanfare surrounding the free-trade zone, K Wah said.
It also said it would continue to boost its land bank in Shanghai should opportunities arise.
The plan to build the mainland's first free-trade zone - an area where goods can be processed and re-exported without the intervention of the custom authorities and free cross-border capital flows are allowed - has stoked concerns among some critics that Shanghai would eventually dent Hong Kong's role as the regional financial and trade centre.
But K Wah founder and chairman Lui Che-woo played down these concerns and encouraged Hong Kong residents to take a global perspective and grasp opportunities worldwide.
"Opportunities abound around the globe," Lui told reporters last week. "Hong Kong people don't need necessarily to compete in just Hong Kong because, after all, it's a small place."
Peter Wong Tung-shun, the chief executive of HSBC Asia-Pacific, said the free-trade zone in Shanghai, a copycat of Hong Kong, would not generate a zero-sum game of competition between the two metropolises.
Rather, the zone would create more opportunities, helping the mainland to attract a bigger amount of assets, which, in turn, would benefit Hong Kong, Wong said.
K Wah has 270,000 square metres of developments under construction in Shanghai. They are expected to rake in sales of 22 billion yuan (HK$27.8 billion), according to chief financial officer Herbert Hui.
An additional three projects in Shanghai including the one in Jinqiao are in the pipeline. K Wah described the businesses in the city as a new growth engine despite the austerity measures imposed by Beijing to curb the property market.
Property stocks and prices of apartments related to the Shanghai free-trade zone have shot up since Beijing officially endorsed the plan in July.
Property service firm DTZ said in a research report the zone would have a "positive effect" on Shanghai's property market, with an increasing demand for office space and high-end dwellings as global financial institutions and manufacturers ramp up their operations to take advantage of new business opportunities.
The free-trade zone is restricted to an area covering nearly 30 square kilometres initially, but it is believed that the zone will be considerably expanded if the trial run is successful.
K Wah shares last traded at HK$4.18.