Mainland investors’ appetite for property in Hong Kong is showing no signs of abating despite sky-high prices and capital control measures. Since the second half of last year, deep-pocketed developers from the mainland have shifted from bidding for land to acquiring existing property. In March alone, there were four transactions worth more than HK$3.3 billion (US$420.4 million). Henry Mok, regional director of capital market at JLL, said the presence of mainland developers in the city will continue to grow. “They have recently turned increasingly active in seeking investment opportunities in the private market,” Mok said. Fuzhou-based developer Fullsun International bought five floors in a Kowloon East Office project totalling 72,800 square feet and 16 car parking spaces for HK$1.3 billion in March. It followed the company’s acquisition of a property located at La Salle Road, Ho Man Tin, for HK$920 million a week earlier. The project will provide 78 units and is expected to be completed this year. Guangzhou-based Dinglong Group paid HK$1 billion for 13 villas in Tsuen Wan, while China Aoyuan Property, also based in Guangzhou, bought five units at Yin Yee Mansion at Mid-Levels West for HK$131 million, its first foray into Hong Kong after it failed to win a bid for a residential site in Whitehead in Ma On Shan last year. “To have a better chance at entering the market, more mainland developers, especially mid-to-small sized ones, chose to shift their strategy by focusing on the private market,” said Ingrid Cheh, associate director at JLL. “For newer entrants this also poses a lower risk and promises a quicker turnaround compared to starting from scratch.” Esther Liu, credit analyst at S&P Global Ratings, said that because of strong earnings and lower leverage reported by most mainland developers, they have enough cash on hand. “With Hong Kong being a stable and mature market than mainland China where a lot of cities having price or purchase limit, we believes that mainland developers, particularly those Hong Kong-listed ones, will become more active in the secondary market this year.” Hong Kong-listed Agile Property paid HK$389 million, or more than HK$26,000 per square feet, in January for 19 units at Dragon Court in Kowloon Tong. Earlier, the company bought a former subsidised public housing estate in Quarry Bay for HK$400 million. Liu said that compared to buying land, acquisitions on the secondary market were more “low profile” than bidding at exorbitant prices, like the HNA Group, which had no hesitation in bidding 50 per cent above market valuation to grab land. HNA paid HK$27.2 billion to buy four plots of land from the Hong Kong government at the former Kai Tak airport site over four months in 2016. Such investment was highly discouraged by the central government and tagged as irrational and speculative. As a result mainland developers have been taking a detour when putting money in Hong Kong’s property market. They had become muted in land tender auctions in 2017, winning only 11 per cent of bids by value since last April, compared to about 50 per cent in 2015 and 2016, according to data compiled by S&P.