Hong Kong’s sky-high land prices force local developers to seek opportunities elsewhere
- Far East, Swire Properties and Nan Fung are among the builders who have announced new projects abroad as it becomes more difficult to buy land at home
- At Kai Tak, the site of the city’s former airport, the land price has almost quadrupled to HK$19,636 per square foot in the last six years
Hong Kong’s sky-high land prices are prompting more and more Hong Kong’s developers to look beyond the world’s most expensive property market for opportunities.
Far East Consortium, Swire Properties and Nan Fung Development are among the builders who have recently announced projects in other countries – and even other sectors – as it becomes more difficult to buy land at home.
The cost of land in Hong Kong has skyrocketed in recent years because of a pronounced lack of supply. For instance, at Kai Tak, the site of the city’s former airport, the land price has almost quadrupled from HK$5,157 per square foot to HK$19,636 per square foot in the last six years.
“Hong Kong’s land is quite expensive. Usually only the big developers can win land tenders,” said Sam Chi-yung, strategist at Springwaters Financial Securities. “The relatively smaller developers may turn to other countries to seek opportunities.”
Far East said it had bought a 20-acre parcel of residential land in the centre of Manchester in the UK from Network Rail, on which it hopes to build more than 1,000 units. It marks the latest move by the developer to deepen its foothold in markets outside Hong Kong.
Swire Properties early this month said it would develop a luxury residential project in Jakarta, in its first foray into Indonesia, Southeast Asia’s largest economy.
Nan Fung Development said last week it would deepen its move into health care with a joint venture that will produce and sell cancer and arthritis medicines in mainland China.