Developments accelerate with speed train
Hong Kong-listed Shui On Land plans to accelerate completion of developments in Wuhan and Foshan to meet burgeoning demand for housing. This demand was triggered by the launch of high-speed train services in those areas.
Shui On was one of the first Hong Kong developers to go to the mainland, beginning its activities there in the 1980s.
The company, controlled by Vincent Lo Hong-sui, believes its two projects - Wuhan Tiandi and Foshan Lingnan Tiandi - will be a major beneficiary of the Guangzhou-Wuhan high-speed train that began operating in December 2009.
It expects that it will likewise gain from the opening of the first phase of the Guangzhou-Foshan metro, which began services in November.
'We have already seen our retail tenants reporting strong increases in sales at our commercial properties in Wuhan,' Shui On Land managing director Freddy Lee said.
Pre-leasing of its grade A office project at Wuhan Tiandi had also generated a strong response among prospective tenants, given the large number of multinational corporations and local firms that plan to expand to Wuhan, added Lee.
'With the improvement in accessibility arising from the rail network, Wuhan will become an ideal location for such corporations to set up headquarters in the central part of China,' he said. Negotiations were already underway with blue-chip tenants seeking to lease one to two floors at the office block.
The tenants showing an interest in taking up space in the grade A office development include global auditing firms and local law firms, he said.
The 30-storey grade A office is part of the Wuhan Tiandi project, with a gross floor area of 1.5 million square metres. The project will include a five-star hotel and high-end department stores.
Shui On said it recently sold 200 units at its residential project in Foshan when it put the development on the market in Hong Kong.
'The percentage of Hong Kong buyers in our Foshan project was three times higher than we recorded in all our other housing developments excluding Shanghai,' said Lee, who attributed the increased demand to improved accessibility created by the new rail network.
'We now find that people living in Foshan are commuting to work in Guangzhou as the travelling time has been cut sharply,' he said. An increasing number of people and companies will relocate to Foshan given that costs are low there compared with Guangzhou, added Lee, who signaled an interest in buying land along the high-speed rail route.
'It will provide a good business opportunity for us,' he said.
In September, Shui On acquired land in Shanghai's Hongqiao district for 3.19 billion yuan (HK$3.76 billion). The firm will build a 233,140 square metre mixed-use development on the site.
The site is part of the Shanghai city government's plan to transform the Hongqiao Business Area - a transfer point for passengers - into a business centre.
The 26.3 sq km site, equal to the size of Macau, is designated for office, retail and convention-centre use.
