Shenzhen-based Vanke to expand in Hong Kong property market, buy land
China Vanke, the mainland's biggest developer by market value, plans to expand in Hong Kong's property market as the city's home prices surge.
Vanke would also target foreign markets where Chinese buyers are active, including San Francisco, New York, Boston and Singapore, company president Yu Liang said in Hong Kong yesterday.
Of all the target cities, the developer preferred Hong Kong and expected to increase its investment in the city, Yu said.
"We are very optimistic on Hong Kong's property market in the long term and are looking forward to working with different partners," he said. "We will seize every opportunity to buy land here."
Vanke expanded overseas this year as Chinese developers took advantage of demand for real estate around the world from Chinese nationals and as prices at home soared.
Vanke signed a deal with Tishman Speyer Properties in February to develop two residential towers in San Francisco. In April, it agreed to buy 30 per cent of Sherwood Development, a unit of Singapore's Keppel Land.
The Shenzhen-based developer entered Hong Kong for the first time in January after its unit jointly won a HK$3.43 billion bid for a site in the city, with New World Development.
Vanke last year paid HK$1.08 billion for a 74 per cent stake in Winsor Properties, which was renamed Vanke Property Overseas.
Vanke will mainly focus on the residential market in the city, while it may also invest without local partners, according to Yu.
Home prices in Hong Kong have more than doubled since early 2009 on an influx of mainland buyers, near record-low interest rates and a lack of new supply.
"If there are good opportunities, why not?" Yu said. "We can't always just sit on the bench."
A unit of China Overseas Land & Investment paid HK$4.54 billion for two sites in Kowloon East, according to a Hong Kong government statement in June.
Vanke reported on Tuesday that first-half profit climbed 22 per cent to 4.56 billion yuan (HK$5.8 billion) as it sold more small and medium-sized homes.
Home prices on the mainland will stabilise in the second half of the year, while the government focuses on the long-term development of the market rather than cracking it down, according to Yu.
The central government would seek a "stable and healthy" development of the property market, the Politburo said on July 30, the first time this year the authorities did not mention further tightening measures, according to Credit Suisse and Orient Finance.
Vanke Property shares yesterday fell 1.36 per cent to HK$11.64.