PRC developers turn active in the private market to seek investment opportunities
Fullsun International Holdings, a PRC-backed developer, entered the local market for the first time, acquiring '6 La Salle Road' at Ho Man Tin for HKD 920 million. Meanwhile, China Aoyuan Property purchased five units at 'Yin Yee Mansion' in Mid-Levels West for HKD 131 million.
HONG KONG, March 27, 2018 – PRC developers turned increasingly active in the private market, seeking en bloc, bulk-purchase or amalgamation opportunities in Hong Kong, according to JLL's Residential Market Monitor report released today.
Fullsun International Holdings, a PRC-backed developer, entered the local market for the first time, acquiring '6 La Salle Road' at Ho Man Tin for HKD 920 million, or HKD 28,000 per sq ft, in terms of saleable area from Easyknit International Holdings. The project will provide 78 units and is expected to be completed within this year. China Aoyuan Property purchased five units at Yin Yee Mansion at Mid-Levels West for HKD 131 million, with an intention to amalgamate the whole site. It will be the first residential development of China Aoyuan Property in Hong Kong.
In the land sale market, the first two sites released for sale by government tender this year were acquired by two local heavyweights. This came as a surprise to most market pundits since PRC developers won 70% of the residential sites tendered back in 2017.
Henry Mok, Regional Director of Capital Market at JLL, said: "Some associated the dwindling appetite of PRC developers in the Hong Kong property market to capital control measures as well as the more aggressive bidding strategy of local developers. But we hold the view that the presence of PRC developers in the city will continue to grow, as they have more recently turned increasingly active in seeking investment opportunities in private market. Strong sales results in the primary market recently also gave them confidence to expand in Hong Kong,"
Ingrid Cheh, Associate Director of Research at JLL, said: "On the Hong Kong Stock Exchange for benchmarking, there are more than 100 PRC companies listed under the property development industry, many of which are likely to be on the lookout for outbound investment opportunities. It would be no surprise to see a growing footprint from smaller-sized PRC developers in the Hong Kong market, and the potential could be huge."
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