Hong Kong developers seize mainland property opportunities amid downturn but will trend continue in 2023?
- Swire Properties, New World Development, Kerry Properties and Hongkong Land all increased investments in mainland projects
- The move by Hong Kong developers has occurred amid a liquidity crisis on the mainland that has seen several firms enter a restructuring
Several Hong Kong developers have been snapping up mainland property assets over the past year as their debt-laden counterparts struggle through tough times amid a real estate downturn.
Swire Properties, New World Development, Kerry Properties and Hongkong Land increased investment plans in mainland projects by over HK$30 billion (US$3.83 billion) in 2022, in an about-turn from a mass withdrawal from the mainland market seven years ago when prices took off.
“Demand for mainland projects is robust,” said Charli Chan, executive director of capital markets for Greater China at real estate firm Cushman & Wakefield. She added that over 10 developers in the city are in discussions with her to invest in property projects in mainland cities, especially in the Greater Bay Area (GBA). She declined to identify who they are, citing client confidentiality.
“We can see that not only in 2022, but over the past five years, that more Hong Kong developers are eyeing the mainland market,” said Chan. “Returning to the mainland [real estate market] is a trend and part of their investment strategy, not just now, but for the future.”
Swire Properties, one of the largest commercial landlords in the city, said early in 2022 that it would invest HK$100 billion to expand core markets over 10 years, half of which would be allocated to the mainland.