For China’s property builders, Hong Kong is turning into Shenzhen’s yard By Reuters
By Clare Jim
Chinese language property builders have turned their sights to Hong Kong’s border districts as mainlanders from neighbouring boomtown Shenzhen contemplate components of the previous British colony as a extra reasonably priced long-term housing prospect.
The event plans are seen by some as a turning level, with patrons from what was as soon as thought of Hong Kong’s cheaper industrial hinterland more and more viewing of the worldwide finance hub as Shenzhen’s “yard”.
Whereas Hong Kong’s property market stays red-hot, town’s worldwide financial status has come below strain after extended pro-democracy protests in 2019 and sweeping new nationwide safety legal guidelines final yr.
Shenzhen’s stature, in distinction, retains rising. Throughout a go to final October, President Xi Jinping touted it as “a mannequin metropolis”, flagging plans to extend overseas funding. (Full Story)
In just some many years, the sleepy backwater on China’s southern border has morphed right into a tech hub of about 13 million, folks towering over the fishponds and farmland in Hong Kong’s less-developed north. Lots of of hundreds transfer there yearly.
In Shenzhen’s prime districts, reminiscent of Nanshan the place tech big Tencent 0700.HK relies, some home costs have already surpassed these in northern Hong Kong, which is one hour or extra away from the costly central enterprise district.
“Our long run view is Shenzhen would be the centre and Hong Kong the periphery,” stated an govt at a Chinese language developer which purchased land within the as soon as less-appealing north, asking to not be named as a result of he was not authorised to talk to media.
“Individuals who work in Shenzhen might select to commute from Hong Kong the place dwelling costs can be cheaper.”
Hong Kong Land Division data present that of the six northern residential plots auctioned off since 2019, three had been purchased by Chinese language builders.
In a separate non-public deal final yr, China Evergrande Group 3333.HK purchased 250,000 sq. toes within the border city of Yuen Lengthy, from Hong Kong’s Henderson Land (OTC:) 0012.HK for $600 million.
Property brokers instructed Reuters the main Chinese language developer plans round 200 items within the space and expects most patrons to be mainlanders. It purchased at HK$10,000 per sq. foot and is trying to promote at HK$20,000, which it hopes will entice mainlanders from Shenzhen, an agent in touch with Evergrande stated.
Within the a part of Shenzhen instantly throughout the border, costs are nearer to HK$30,000 per sq. foot.
Evergrande can be promoting 2,000 flats within the Tuen Mun neighbourhood – a 15-minute drive from Nanshan and near a seashore – after ending a mission on a plot purchased from Henderson Land for $833 million in 2018.
Shenzhen-based Kaisa Group 1638.HK received a parcel there for $451 million final yr, whereas main developer China Vanke 2202.HK has already constructed over 1,100 items.
Kaisa stated the placement, near the Hong Kong-Zhuhai-Macau bridge, may benefit from nearer integration between cities within the Higher Bay Space. Vanke’s Hong Kong unit stated it was handy for journey to Shenzhen and Macau, however added northern Hong Kong isn’t its sole focus.
Evergrande declined to remark.
In keeping with realtor Midland, mainland Chinese language purchased 40% extra residential properties in Hong Kong within the first two months of 2021 than a yr in the past, boosted by optimism that the border will reopen because the COVID-19 disaster eases.
The share of mainland patrons of latest Hong Kong properties bottomed within the second quarter final yr at 8.7% of transaction volumes, and rose to 11% within the first quarter this yr.
Greater than 80% of their 2021 purchases had been valued above HK$50 million ($6.4 million), Midland stated.
“Chinese language builders are upbeat in regards to the Hong Kong property market,” stated Midland HK residential CEO Sammy Po. “Northern districts are one of many areas Chinese language buyers are shopping for in.”
Tuen Mun and Yuen Lengthy noticed many anti-government and anti-China demonstrations in 2019. The protests are unlikely to renew, however tensions stay as some long-time residents really feel the rich newcomers are disrupting their life-style.
“Tuen Mun has larger shopper items costs than town centre, that is irregular,” stated 50-year-old Wong, who solely gave her final identify because of the sensitivity.