Analysts believe developers eager to purchase at coming major land sales

Chinese mainland property developers have been massively expanding their business in Hong Kong in recent years, turning into another strong investment force in the Hong Kong land market, and the trend is expected to continue, according to analysts.

Henry Mok, regional director of Capital Markets at real estate services firm Jones Lang LaSalle, said in the coming two to three months there will be more major land bids and mainland developers will be eager to buy, adding that “the previous cases are just a start” and 2017 will still be the year of mainland buyers, in terms of the residential land market.

Within one week last month, two residential land parcels in Hong Kong were successfully bid by mainland developers.

One is MTR Corporation residential plots, next to Wong Chuk Hang station on the South Island Line in Hong Kong, which were successfully bought by Ping An Real Estate Capital, a unit of Ping An Insurance, which teamed up with Road King Infrastructure, outbidding 13 Hong Kong developers.

In addition, Logan Property, together with KWG Property, bought high-end residential land at Ap Lei Chau for HK$ 16.85 billion ($2.17 billion), the highest price i n recent years i n terms of the deal price for

the price for high-end residential land at Ap Lei Chau bought by Logan Property and KWG Property

one single plot of land.

According to the CRIC real estate research center, since 2011, mainland companies have been buying Hong Kong residential land, including China Overseas Land and Investment, Vanke, Poly Property Group, Shimao Property, Mingfa Group, China Metallurgical Group, China Minmetals, and HNA Group. And the investment reached HK$ 76.4 billion with a total of 23 deals so far, most of which were in the past two years.

Mok pointed out that mainland buyers care less about profits and returns, and are willing to pay a higher price than local developers, and they are determined to buy and do a great deal of research before they make their bid.

He said that mainland developers’ high level of purchases would have a certain impact on small and medium-sized local developers, rather than those with plentiful inventories in hand.

Mainland developers’ generous purchases of land in Hong Kong exceeded the market valuation, in the context of the yuan’s deprecia-