HKR International invests more in Hong Kong’s older buildings as home prices climb amid land shortage

The developer behind Discovery Bay has recently spent HK$677 million (US$87.2 million) on two buildings – one industrial and one residential – for redevelopment

The number of industrial properties changing hands rose 37 per cent in March to the highest level since May 2019, according to data from Centaline

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The developer’s diversification away from Discovery Bay, pictured, could help to reduce risk, says Leo Cheung, of Pruden Holdings. Photo: Roy Issa

Published: 7:30am, 5 May 2021Updated: 7:30am, 5 May 2021

HKR International, the home builder behind Discovery Bay, is focusing more on redeveloping older buildings in urban areas as the city’s famous shortage of land forces developers to try new strategies in order to tap rising home prices.

It has spent HK$677 million (US$87.2 million) on two buildings – one industrial and one residential – since December for redevelopment.

“The continuous shortage of land in Hong Kong, especially in prime locations, has caused property developers to turn to alternative means of growing their portfolios,” said executive chairman Victor Cha Mou-zing in an email interview with the Post.

“Acquisition and conversion of old buildings, and transforming low-yield growth assets is gaining popularity among developers.”

Hong Kong’s home prices have been edging upwards in recent months, as the Covid-19 outbreak tapers off and the roll-out of vaccinations has gathered pace.