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Hon Kwok Land Investment will shift its focus to the China market due to lower development costs and higher profit margins, according to managing director Herman Fung Man-hei.

The move is also in response to a slowdown in the Hong Kong housing market and fierce competition among key industry players.

The downturn had made it increasingly hard for small developers to compete with the larger ones, Mr Fung said at the Shenzhen Real Estate (Hong Kong) Exhibition.

'It's hard for us small players to acquire smaller lots in urban areas these days. Home buying is also slow, particularly in non-core areas in the New Territories,' he said.

Hon Kwok is marketing units in Tsuen Wan, Sheung Shui and Diamond Hill.

Mr Fung said profit margins on many projects had fallen to almost zero in recent years, amid cautious buying sentiment.

Hon Kwok would target the mainland housing market in the future, where demand was growing. 'It's the lower costs which prompts us to shift to the mainland market,' he said.

Mr Fung said many of Hon Kwok's residential projects in Shenzhen could secure profit margins of 10 per cent to 25 per cent.

'This would not be the case in the Hong Kong market at present,' he said.



China focus shift for Hon Kwok