More Chinese property developers eye Hong Kong sites
More and more mainland Chinese developers are setting their sights on Hong Kong’s land market to diversify in the wake of the a property market slowdown at home, especially in smaller cities, as well as to take advantage of the falling land prices in the city.
Tian Ming, chairman of Nanjing-based Landsea Green Properties, said Hong Kong would be its priority overseas investment destination this year.
In an interview with the South China Morning Post, Tian said the company is in talks with Hong Kong’s Road King Infrastructure to set up a joint venture to bid for land in Hong Kong. He said he hopes to bring the company’s green technology to Hong Kong to build eco-friendly homes here.
“We’ll focus on the residential market and build properties for the middle class,” he said, but added the company is yet to identify any sites.
Shanghai’s Future Land Development last week told the Post it was seeking acquisition opportunities in Hong Kong as well. The company is interested in both redevelopment projects and office buildings, said Kenny Chan, vice-president and company secretary of Future Land.
Longfor Properties, a company founded in Chongqing in 1993 that has built a nationwide presence, is also studying opportunities to invest in Hong Kong’s declining property market to diversify its investments, according to sources.
Analysts said the Hong Kong government is changing its policy to accept lower land premium, in a bid to stimulate demand. In February, Secretary for Development Paul Chan announced the 2016-2017 land sale programme. Eight commercial sites will be available under the programme, providing a total commercial gross floor area of about 5.7 million square feet.
These include the long-awaited Murray Road car park redevelopment site in Central. The site is expected to draw strong interest from local and mainland Chinese developers as well as corporate end-users, according to property consultant CBRE.
“The next few years will see the government offering more commercial and residential sites for sale and Chinese developers will remain active bidders,” CBRE said in a report released yesterday.
Mainland companies are no stranger to Hong Kong’s real estate market. China Everbright acquired Dah Sing Financial Centre in Wan Chai from SEA Group for HK$10 billion in the first quarter. Mainland developers such as Shimao Property and Poly Property, a Hong Kong unit of mainland developer Poly Real Estate, have also been buying residential sites in Hong Kong.