Analyst says Wuxi development will be part of a strategic alliance by the firms
Sun Hung Kai Properties (SHKP) has again teamed up with China Resources Group to invest in a mainland property project, this time a residential and commercial project in Jiangsu province.
Sources said the two companies would establish a strategic alliance in investing in China property developments, especially in residential projects in second-tier cities. But an analyst from a leading United States investment bank dismissed any move by SHKP to establish a permanent partner as unnecessary and unrealistic.
SHKP would not comment on the Jiangsu project in Wuxi city, and China Resources could not be reached for comment.
The booming economy and robust demand for housing and office space in mainland cities have lured international players to tap into the China property market. However, some Hong Kong developers are wary of political risks and have been selective in where they invest. As shown in SHKP's annual report, the company until recently had targeted only first-tier cities such as Beijing, Shanghai, Guangzhou and in the Pearl River region.
The 1.12 million square metre Wuxi development, officially claimed to be one of the two largest prime sites since the municipality launched its land sales programme in 2001, was sold for 2.5 billion yuan through a public tender by China Resources in October. The other site, at 1.19 million sqmetres, was bought by a Shanghai developer in the same tender for 3.2 billion yuan.
