This is the reason mainland China buyers converge in Hong Kong
This is the reason mainland China buyers converge in Hong Kong
Buyers from the mainland are purchasing residential land in the Chinese SAR in a big way
Fears of a devalued yuan have seen buyers from mainland China pour HKD58 billion (USD7.5 billion) on residential land and office building acquisitions in Hong Kong, reported the South China Morning Post.
Around HKD13.8 billion (USD1.78 billion) or 42 percent of the revenue from residential land sales as of 8 August can be traced to mainland Chinese developers.
The yuan contracted 2.5 percent against the US dollar this year. In August 2015, the People’s Bank of China devalued the yuan by 1.9 percent.
In comparison, the Hong Kong dollar, which is pegged to the greenback, offers more stability to investors on the lookout for a safe haven.
“Apprehensions about the yuan volatility are prompting mainland developers to increase their overseas investment and Hong Kong is fast emerging as one of the most preferred destinations,” Vincent Cheung, executive director for valuation and advisory services in Asia at Colliers International, told the Post.
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Minmetals Land broke records on 3 August when it outbid 12 others for a site in Yau Tong, a traditional industrial area in Hong Kong, for HKD7,068 (USD911) per square foot. The metals trader announced it would be investing a total of HKD6 billion (USD773.6 million) on the site.
Mainlanders and Hong Kong sellers are also brokering behemoth deals involving office assets. In February, China Everbright Group scooped up the Dah Sing Financial Centre in Wan Chai for HKD10 billion (USD1.3 billion).
Last year, Evergrande Real Estate purchased the Mass Mutual Tower in the same district for HKD12.5 billion (USD1.6 billion), the largest single office block transaction in Hong Kong.
“The arrival of mainland developers will have a long-term impact on the Hong Kong housing market, adding additional competition to local developers through increased housing supply and probably lower prices,” Alan Jin, a property analyst at Mizuho Securities Asia, told the Post.
According to Jin, the winning land bids by mainland Chinese companies are likely to yield more than 3,700 units.
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Source: Property Report