Continued mainland growth, rising middle class and improving regulatory system find property firms eager to join in Hong Kong property developers are triggering the biggest investment waves in 10 years for the mainland's robust property market as the country enjoys continued high economic growth, a growing middle class and an improved regulatory system. While Hutchison Whampoa and Cheung Kong Holdings, Shui On Group and Hang Lung Properties were continuously making aggressive forays in China's big and small mainland cities, Sun Hung Kai Properties and New World Development made their own investment moves in the market. Henderson Land Development has become the latest leading Hong Kong firm to announce a multibillion-dollar expansion into the nation's burgeoning middle-income housing market. One of the developer's latest investments is in a 50-50 joint venture township project in Xian, the provincial capital of Shaanxi. The investment cost has been estimated at HK$5 billion. 'Henderson Land and New World were the two biggest landlords in China among Hong Kong developers in the 1980s and 90s. But Hutchison and other developers such as Hang Lung (Properties) have invested aggressively in the past few years,' said Colin Lam Ko-yin, the vice-chairman of Henderson Land. 'We are now accelerating the pace of investments.' Henderson Land has teamed up with Surbana Corp, a unit of Temasek Holdings, the investment arm of the Singapore government, on the housing project which will have an estimated 30,000 flats - about three times the size of City One Sha Tin. The project, east of the Chan River and within the Chanba Ecological district, is next to the planned third ring road which is expected to be operational by the middle of next year. The first phase of the township project is expected to be launched as early as the first quarter of 2008, according to Surbana. Henderson Land, the third-largest developer in Hong Kong by market value, on Friday raised HK$5.5 billion from the stock market, saying the capital raised would be used for mainland investments. The Xian investment came after the company announced a three billion yuan investment on a housing project in Changsha. 'Unlike investment in the 1990s which included only a limited number of developers, this time round, big and small Hong Kong developers are fully committed to the mainland market and see it as a long-term investment platform,' said Lau Chun-kong, a regional director with Jones Lang LaSalle. Other Hong Kong firms active in the property market include Kerry Properties which won a government tender for a site in Xiacheng district for 669.78 million yuan last month. Kerry Properties is controlled by the Kuok Group, which is also the largest shareholder of SCMP Group, publisher of the South China Morning Post. Small investors are also trying to capitalise on the mainland's rising property market. Hon Kwok said it hoped to achieve an annual production target of 200,000 square metres gross floor area at a cost of 440 million yuan for the year to March 2008. Mr Lam said demand for housing is now broader and more firmly based due to China's growth and a surging middle income class seeking a better standard of living. The expansion was also fuelled by excess liquidity from overseas investment funds looking to join with Hong Kong firms to invest in China, he said. 'If you raise your hand and tell foreign funds that you want shareholders, you will get it. Two decades ago, how could you get money so easily?' Mr Lam said. An improved regulatory and land auction system had also fuelled the overseas investment boom in China, he said. Andrew Ness, executive director of CBRE Research, a unit of CB Richard Ellis, said the first wave of overseas investment in China from 1992 to 1996, was targeted at Chinese in Hong Kong and Taiwan and to lesser extent other overseas Chinese in Southeast Asia. However, as the target band was narrow, developers lost money. 'Property development is somewhat less risky than in the 1990s,' Mr Ness said. Since then, China's regulation of property investment and development has been shaky. 'Following this regulatory change, whether or not China can return to a period of greater regulatory stability again will be a crucial factor in determining how this second wave of investment activity ends,' Mr Ness said.