Chinese developers are moving aggressively into Hong Kong, outbidding their cross-border rivals for prime sites as policy uncertainty and falling property prices on the mainland send them scouring for opportunities to invest overseas.
The mainlanders see the southern territory as a lucrative market based on the absolute earnings enjoyed by Hong Kong-listed developers, which have beaten those of companies listed in mainland China over the past decade.
With some bids up to 20 per cent above analysts’ forecasts, mainland companies such as state-controlled Poly Property Group are pushing up prices for popular sites in one of the world’s most expensive real estate markets.
Fears of a bubble – prices have more than doubled in the Asian financial hub since 2008 – have proven no deterrent, while forecasts from some analysts of a 10 per cent drop in prices this year have fallen on deaf ears.
But fatter margins aren’t the only thing Hong Kong has to offer. Chinese developers also like its legal stability and status as a world city, giving them a platform to gain experience abroad and build brand awareness, industry watchers say.
While hard data is not yet available to quantify the trend, it is rare to see mainland developers so active in public auctions of Hong Kong land. Observers also have been surprised by the mainlanders’ willingness to out-spend their Hong Kong rivals.
Read more at Today Online.