Update | Hang Lung Properties chairman warns of ‘irrational fever’ as mainland developers push up prices at government land auction

Hang Lung Properties chairman Ronnie Chan Chi-chung labelled recent prices at government land auction “irrational fever” and cautioned that his own company is having trouble replenishing its land bank in the city amid aggressive bidding from deep-pocketed mainland rivals.

“In the 1980’s the market was dominated by British firms. Then Hong Kong firms took a growing share in the industry in 1990’s, and now its turning to mainland firms. It is a natural development,” said Ronnie Chan Chi-chung, chairman of Hang Lung Properties on Thursday.

His comment come a day after Chinese conglomerate HNA won its third residential site in Kai Tak development area for HK$5.53 billion, or HK$13,000 per square foot. The price tag is about 27 per cent higher than the price struck in December by casino tycoon Lui Che-woo’s K Wah International, which paid HK$5.87 billion, or HK$10,220 per sq ft.

HNA’s aggressive land acquisition spree has lifted land prices in Kai Tak area by 160 per cent to HK$13,600 per sq ft in three months.

Chan labelled land acquisitions at government auction as “recent irrational fever” adding that prices “will return to normal in the long run”.

In Hong Kong, Hang Lung has only 80 units at Long Beach in Tai Kok Tsui and 16 houses at Blue Pool Road, Happy Valley left unsold.