HK$58 billion and rising: mainland buyers splash out on assets and land in Hong Kong as yuan devaluation fears linger
And the acquisitions are likely to continue, say experts, as city remains favourite investment destination amid growing uncertainties in Europe
Mainland companies and developers have splashed out more than HK$58 billion on major office buildings and residential land in Hong Kong, partly driven by a fear of further depreciation in the yuan, according to the latest estimates.
And analysts believe the acquisition binge will continue for some time yet, as the city remains their favourite investment destination, amid growing uncertainties in Europe, particularly after Britain decided to exit European Union in June.
“Buying assets in a US dollar-pegged currency domain makes sense from a wealth-protection point of view,” said Alan Jin, a property analyst at Mizuho Securities Asia.
On August 11, it was a year since the People’s Bank of China abruptly depreciated the currency by 1.9 per cent last year, and since then the Chinese currency has lost 7 per cent against the US dollar.
Of the headline deals, mainland developers have spent HK$22.53 billion snapping up six large residential sites in Sham Shui Po, Yau Tong, Ho Man Tin and Tai Po, while other organisations have forked out HK$36 billion buying major office buildings in Wan Chai and Hung Hom.
“The arrival of mainland developers will have a long-term impact on the Hong Kong housing market, adding additional competition to local developers through increased housing supply and probably lower prices,” said Jin.