Gaw Capital entices Hongkongers with discounts
Two-bedroom flats at Foshan project on offer for as low as 880,000 yuan
Gaw Capital, a property private equity firm, wants to get Hongkongers on the fast track to home ownership on the mainland.
Amid weak property demand on the mainland, the firm is offering buyers in Hong Kong a discount on 30 flats at The Timezone, a residential project in Foshan city, where the high-speed train that departs from West Kowloon station terminates.
Buyers from Hong Kong can pick up two- and three-bedroom flats for as much as 20 per cent below their average selling price of about 15,000 yuan (HK$16,590) per square metre, according to Midland Realty.
The units were priced from 1.14 million yuan to 1.33 million yuan for 75 to 97 square metres. A two-bedroom unit could sell for 880,000 yuan, it said.
“With this price tag, homeseekers cannot [even] buy a car parking space in Hong Kong,” said Ted Lam, Midland’s managing director for the Greater Bay Area. “But they can enjoy a home in Foshan with good utilities.”
The average price for a 100square-metre home in Foshan is 1.7 million yuan, according to data from Anjuke.com. In Hong Kong, even in the relatively affordable New Territories, an equivalent home would cost HK$13.7 million, according to data from Midland.
The discounted flats are part of the 156 units in the third phase of The Timezone, located within a 370,000-square-metre complex in Foshan’s Nanhai district. The complex includes an international school and a hotel. A luxury outlet shopping centre, Florentia Village, was acquired in April this year.
The complex is 10 minutes away from the Guangzhou South railway station by car, from where Hongkongers can reach West Kowloon in as little as 45 minutes.
It represents Gaw Capital’s first and only residential development bet in the Greater Bay Area to date.
Gaw Capital manages six property-focused funds in the region and has raised US$22.7 billion from investors since 2005. It had US$35.7 billion of assets under management in December 2022, according to its website.
There is a caveat, though. Flats at The Timezone are built on a site designated for commercial use, which only comes with 40-year ownership instead of a typical 70-year lease for residential projects. While owners may also face higher management fees, the upside is the flats could also be used as offices for business purposes.
The first and second phases of the Foshan project are sold out. Gaw Capital decided to change the sales strategy and target investors in Hong Kong after sales fell off in 2022 during the Covid-19 pandemic.
“The project is a good option for Hong Kong buyers who are planning to set up business in the Greater Bay Area,” said King Chen, financial controller for the southern China region at Gaw Capital. “It can also accommodate elderly people from Hong Kong who want to improve their living environment.”
With an expected rental yield of 3 per cent, the property could potentially attract some retail investors from Hong Kong, he added.
The number of Hong Kong people commuting to the mainland has soared since the border reopened in January and the high-speed railway resumed operations in February. On May 1, the first day of the “golden week” holiday, 25,928 Hong Kong residents crossed via the express rail link, according to government data.
“We have received some inquiries from Hong Kong, and our Florentia Village outlet mall also saw high traffic from Hong Kong after the border reopened, indicating there probably is strong demand across the border,” Chen said, adding the company was considering more promotions to attract investors.