Macau, with its cheap plots and little competition, is the promised land for Hong Kong’s smaller property developers
- Hong Kong offers little room for smaller players to grow, Telok Real Estate Partners says
- Land prices in Macau can be as low as a tenth of Hong Kong prices: developer
Hong Kong’s smaller property developers, squeezed at home by heavyweight players, have long turned to Macau, a former Portuguese colony and the other special administrative region covered by Beijing’s Greater Bay Area development initiative.
For instance, Telok Real Estate Partners has built eight residential projects in the casino hub since 2006. Of late, the developer has been focusing on co-living and hostel projects, and has three projects worth US$100 million in the works.
“Land in Hong Kong easily costs about HK$10 billion [US$1.3 billion], and offers little room for small players like us to grow,” said Philip Pang, a partner at Telok.
Land prices in Macau, on the other hand, can be as low as a tenth of Hong Kong prices, and there is little competition with fewer companies with international expertise, in terms of project design. The investment risk is also low.
“Given the fragmented market, you can acquire land by forming partnerships with landowners to reduce the risk and costs involved. It is hard to do this in Hong Kong, where the land market is dominated by big developers,” Pang said. “The competition is not so fierce too – less than five Hong Kong builders are active in Macau,” he added.