Wharf's equity stake in Greentown a model for Hong Kong developers wanting to expand on mainland

For Hong Kong developers seeking to speed up their forays into the mainland market, Wharf (Holdings) offers a good case study in its equity tie-up with Greentown China, industry analysts said.

Some investors based in the city, led by Asia’s richest man, Li Ka-shing, have been divesting from the mainland property market as they see rising risks from record-high home prices there, while others are still betting on opportunities from the country’s push for further urbanisation, involving hundreds of millions of people.

Hong Kong developers were among the first big players in the mainland real estate market. However, they have lagged far behind their mainland-based peers in recent years, as they struggled to cope with the constantly changing policy environment.

“The way in which Hong Kong developers expand on the mainland market is now changing,” said Edison Bian, a property analyst with CCB International in Hong Kong.

“A classic example is the partnership between Wharf and Greentown. It’s very successful.”

In his view, project-based co-operation between Hong Kong and mainland developers has not been very successful. Firms from the city have often missed the best timing to snap up land parcels during short-lived market downturns in recent years, he said.