China’s depressed land market offers buying opportunity for Hong Kong developer HKR International
- HKR International wins prime residential site in Shanghai for US$130.4 million, its first land acquisition in the city since 2002
- Shanghai government is currently conducting its third and final land auction of the year
The debt crisis affecting Chinese developers, which has reduced the bidding frenzy at land auctions in the mainland, has given a Hong Kong property firm an opportunity to acquire a prime parcel.
The Shanghai municipal government is currently conducting its third land auction of the year. So far only eight out of the available 27 plots have been sold, with most of the lots bought by state-owned enterprises. The auction, spread over five days, ends on Friday.
“We feel the competition is less compared to previous land sales,” said Violet Lam, general manager for business development and marketing at HKR International. The company behind the Discovery Bay community on Hong Kong’s Lantau Island will also consider taking part in the upcoming auction in Hangzhou, the capital of Zhejiang province, in the coming weeks, she added.
As major mainland Chinese cities have recorded a tepid response to land auctions in recent months, some governments have slashed prices to drum up demand.
In September, as many as 206 land parcels were withdrawn from auctions across China, as developers that ran afoul of the central bank’s “three red lines” on debt limits ran short of capital to replenish their land banks.