C-Suite Q&A: Road King diversifies to Hong Kong property

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Published: 5:02pm, 6 Jun 2017Updated: 5:08pm, 6 Jun 2017

Road King Infrastructure, which listed on the Hong Kong stock exchange in 1996, had operated as a toll road builder until 2004, when it set its eye on the fast growing property development in China.

It turned to the mainland where land costs were just one-tenth of those in Hong Kong, and small players had been ousted by cash-rich local property giants.

In the first two years of entering into mainland property market, the new business started to contribute HK$506 million in sales revenue, and after its first residential project got off the ground in Guangzhou in 2004.

Last year, its property revenue surged to HK$16.84 billion (US$2.16 billion), with investments spanning across Shanghai, Beijing and Tianjin. The company also expanded into property management business. Its toll road revenue amounted to HK$1.23 billion last year.

Derek Zen Wei-peu,vice chairman of Road King Infrastructure, which employs 5,000 staff in the mainland, has seen the land price gap between the mainland and Hong Kong narrowing and decided to diversify the company’s property investment to the city last year.

It won its second major project in Hong Kong, after acquiring a residential site in Yuen Long last year. Through a a 50-50 joint venture with Ping An Real Estate Capital, a unit of China’s second largest insurer Ping An Insurance, it won the MTR Corp’s tender for a residential plot next to the Wong Chuk Hang station. Surveyors expect the project to involve a total investment of between HK$8 billion to HK$9.8 billion (US$1.26 billion), or HK$14,000 per square foot to HK$17,000 per sq ft based on a total floor area of 576,950 square feet.