Gaw Capital entices Hongkongers with discounts on China housing project near Foshan-West Kowloon high-speed rail line
- Development in Foshan, near the end of high-speed line from West Kowloon, offers two-bedroom units for as low as US$124,000
- Offer aims at capitalising on soaring ridership on the high-speed railway since the border reopened in January
Gaw Capital, a real estate private equity firm, wants to get Hongkongers on the fast track to home-ownership in mainland China.
Amid weak property demand in China, the firm is offering buyers in Hong Kong a discount on 30 flats at The Timezone, a residential development in the city of Foshan, where the high-speed train that departs from Hong Kong’s West Kowloon station ends.
Buyers from Hong Kong can pick up two- and three-bedroom flats for as much as 20 per cent below their average selling price of about 15,000 yuan per square metre, according to Midland Realty. The units are priced from 1.14 million yuan (US$160,000) to 1.33 million yuan for 75- to 97-sq m. A two-bedroom unit could sell for 880,000 yuan, it said.
“With this price tag, home seekers cannot [even] buy a car-parking space in Hong Kong,” said Ted Lam, Midland Realty’s managing director for the Greater Bay Area. “But they can enjoy a home in Foshan with good utilities.”
The average home price for a 100 square-metre home in Foshan is 1.7 million yuan, according to data from Anjuke.com. In Hong Kong, even in the relatively affordable New Territories, an equivalent home would cost HK$13.7 million (US$1.7 million), according to data from Midland Realty.
The discounted flats are part of the 156 units in the third phase of The Timezone development, located within a 370,000 sq m complex in Foshan’s Nanhai district. The complex includes an international school, a hotel. A luxury outlet mall, Florentia Village, was acquired in April this year.
The complex is 10 minutes away from the Guangzhou South railway station by car, from where Hongkongers can reach West Kowloon in as little as 45 minutes. It represents Gaw Capital’s first and only residential development bet in the Greater Bay Area todate.
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There is a caveat, though. The Timezone flats are built on a site designated for commercial use, which only comes with 40-year ownership instead of a typical 70-year lease for residential homes. While owners may also face higher management fees, the upside is that the flats could also be used as offices for business purposes.
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The first and second phases of the Foshan project sold out. Gaw Capital decided to change the sales strategy and target investors in Hong Kong after sales fell off in 2022 during the Covid-19 pandemic when borders were closed.
“The project is a good option to Hong Kong buyers who are planning to set up business in the Greater Bay Area,” said King Chen, financial controller for the southern China region at Gaw Capital. “It can also accommodate elderly people from Hong Kong who want to improve their living environment.”
With an expected rental yield of 3 per cent, the property could potentially attract some retail investors from Hong Kong, he added.
The number of Hong Kong people commuting over the border has soared since the border reopened in January and the high-speed railway resumed operations in February. On May 1, the first day of the golden-week holiday, 25,928 Hong Kong residents crossed via the express-rail link, according to government data.
“We have received some enquiries from Hong Kong, and our outlet mall Florentia Village also saw high Traffic from Hong Kong after the border reopened, indicating there probably is strong demand across the border,” Chen said, adding that the company is considering more promotions to attract Hong Kong investors.
