Chinese developers are moving aggressively into Hong Kong, outbidding their cross-border rivals for prime sites as policy uncertainty and falling property prices on the mainland send them scouring for opportunities to invest overseas.
The mainlanders see the southern territory as a lucrative market based on the absolute earnings enjoyed by Hong Kong-listed developers, which have beaten those of companies listed in mainland China over the past decade.
With some bids up to 20 percent above analysts' forecasts, mainland companies such as state-controlled Poly Property Group Co Ltd <0119.HK> are pushing up prices for popular sites in one of the world's most expensive real estate markets.
Fears of a bubble - prices have more than doubled in the Asian financial hub since 2008 - have proven no deterrent, while forecasts from some analysts of a 10 percent drop in prices this year have fallen on deaf ears.
But fatter margins aren't the only thing Hong Kong has to offer. Chinese developers also like its legal stability and status as a world city, giving them a platform to gain experience abroad and build brand awareness, industry watchers say.
"More and more Chinese developers are coming to Hong Kong," said Alvin Yip, managing director of investment and advisory services at property consultancy DTZ.
"They are not coming only for opportunities in Hong Kong, but also using Hong Kong as a base to invest in Europe, the United States and other parts of the world."
In Kai Tak district - one of Hong Kong's largest developments covering 320 hectares (790 acres) of residential and commercial complexes - half of the six available land plots were bought over the past year by state-owned developers, including China Overseas Land & Investment Ltd <0688.HK> and Poly Property. [ID:nL3N0LU2L1]
While hard data is not yet available to quantify the trend, it is rare to see mainland developers so active in public auctions of Hong Kong land. Observers also have been surprised by the mainlanders' willingness to out-spend their Hong Kong rivals.
In May, a luxury residential site on Hong Kong island fetched the city's fifth-highest land price per square foot when it was sold to a consortium of local and mainland Chinese developers, including Hui Wing-mau, chairman of Shanghai-based Shimao Property Holdings' <0813.HK>, and mainland commercial developer Mingfa Group International <0846.HK>.
"The premium price they (Chinese developers) offered surprised the market," said a senior executive at a Hong Kong property company, which was out-bid by state-owned developers in several land auctions.
"Chinese developers are more optimistic, while locals remain pessimistic due to uncertainty in the market," said the executive, who declined to be identified as he was not authorised to speak to the media.
China Overseas Land declined to comment, while Poly did not respond to several interview requests.
The mainlanders see the southern territory as a lucrative market based on the absolute earnings enjoyed by Hong Kong-listed developers, which have beaten those of companies listed in mainland China over the past decade.
With some bids up to 20 percent above analysts' forecasts, mainland companies such as state-controlled Poly Property Group Co Ltd <0119.HK> are pushing up prices for popular sites in one of the world's most expensive real estate markets.
Fears of a bubble - prices have more than doubled in the Asian financial hub since 2008 - have proven no deterrent, while forecasts from some analysts of a 10 percent drop in prices this year have fallen on deaf ears.
But fatter margins aren't the only thing Hong Kong has to offer. Chinese developers also like its legal stability and status as a world city, giving them a platform to gain experience abroad and build brand awareness, industry watchers say.
"More and more Chinese developers are coming to Hong Kong," said Alvin Yip, managing director of investment and advisory services at property consultancy DTZ.
"They are not coming only for opportunities in Hong Kong, but also using Hong Kong as a base to invest in Europe, the United States and other parts of the world."
In Kai Tak district - one of Hong Kong's largest developments covering 320 hectares (790 acres) of residential and commercial complexes - half of the six available land plots were bought over the past year by state-owned developers, including China Overseas Land & Investment Ltd <0688.HK> and Poly Property. [ID:nL3N0LU2L1]
While hard data is not yet available to quantify the trend, it is rare to see mainland developers so active in public auctions of Hong Kong land. Observers also have been surprised by the mainlanders' willingness to out-spend their Hong Kong rivals.
In May, a luxury residential site on Hong Kong island fetched the city's fifth-highest land price per square foot when it was sold to a consortium of local and mainland Chinese developers, including Hui Wing-mau, chairman of Shanghai-based Shimao Property Holdings' <0813.HK>, and mainland commercial developer Mingfa Group International <0846.HK>.
"The premium price they (Chinese developers) offered surprised the market," said a senior executive at a Hong Kong property company, which was out-bid by state-owned developers in several land auctions.
"Chinese developers are more optimistic, while locals remain pessimistic due to uncertainty in the market," said the executive, who declined to be identified as he was not authorised to speak to the media.
China Overseas Land declined to comment, while Poly did not respond to several interview requests.
