Hong Kong property
Get more with myNEWS
A personalised news feed of stories that matter to you
Learn more
Donald Choi Wun-hing, Nan Fung Development’s managing director, says global capital will shift to stable investment markets such as Hong Kong. Photo: Felix Wong

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.

With individual mainland buyers flocking to snap up overseas properties as the yuan depreciates, Nan Fung’s Island Garden in Shau Kei Wan has been a major beneficiary, with 20 per cent of buyers being mainlanders.

Nan Fung’s Donald Choi at the company’s office in Sheung Wan. Photo: Felix Wong
“Not all our projects will draw the strong interest of mainland customers,” Choi said, pointing out that sales of its mass housing project The Visionary in Tung Chung and super -deluxe Mount Nicholson development on The Peak were dominated by local buyers.

Mount Nicholson, a joint venture with Wheelock & Co, counted some of the city’s wealthiest families among its owners.

Two adjoining luxury flats with a combined floor area of 8,702 sq ft on the 16th floor at Mount Nicholson sold for HK$912 million, or HK$104,803 per sq ft, which set the record for the most expensive flat in Asia. The buyer, Edwin Leong Siu-hung, the founder of Tai Hung Fai Enterprise and this year ranked as Hong Kong’s 17th-wealthiest businessman, confirmed that he and his relatives bought three flats, including the two adjoining flats, for a total HK$1.2 billion on Tuesday.

Alice Ho Chiu-yan, a daughter of Macau gaming tycoon Stanley Ho Hung-sun, paid HK$646 million for two adjoining units on the ninth floor, according to data from the Land Registry. Her sister Sabrina Ho Chiu-yeng bought two other adjoining units on the 10th floor for HK$644.6 million.

So far, five houses and 16 apartments at Mount Nicholson have been sold for a total of nearly HK$8 billion since it was launched in February, according to a government website.

Shrugging off the fierce entry of mainland giants, Choi said; “Competition always exists. Global capital will shift to stable investment markets and Hong Kong is one of those. Our strength is developing super deluxe residential projects and we have established our track record on The Peak.”

This article appeared in the South China Morning Post print edition as: HK firms taking aggressive stance in land auctions