Hong Kong developers more aggressive in buying land in face of competition from mainland rivals

Hong Kong developers are more aggressive in government land sales in the face of tough competition from cashed up mainland rivals that continue on their acquisition binge as the value of the yuan tumbles, says Donald Choi Wun-hing, managing director of Nan Fung Development.

His remarks come after Hong Kong developers outbid mainland rivals to secure 19 out of 21 government sites available in the seven months to November, compared with 13 out of 20 plots for the whole of the previous financial year.

So far this financial year, local developers have been outbid on two residential sites by mainland rivals – one in Kai Tak which sold to HNA for a jaw dropping HK$8.8 billion on November 3, and another residential site in Yau Tong sold to state-owned Minmetals for HK$4 billion on August 3.

“Hong Kong developers have changed their strategies,” said Choi, pointing out that mainland players have adopted a more aggressive attitude when it came to land acquisitions.

The trend would continue but it was also an indication of local and mainland developers’ strong confidence in Hong Kong’s property market, he said.

To increase its chances of building up a land bank, Choi said “the group is open to all options including forming alliances with mainland partners to participate in government land sales”.

Nan Fung Development teamed up with Poly Holdings to secure a residential site in Tung Chung in 2010 , now developed into The Visionary project comprising 1,419 units.