Greater Bay Area: will China’s property slump foil Hong Kong developers’ multibillion-dollar bets?

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SHKP, New World, CK Asset, Swire and Henderson have dozens of projects in the Greater Bay Area with a gross asset value of US$19.2 billion: CGS-CIMB Securities

Hong Kong firms are well-placed to take advantage of opportunities given the crisis facing their mainland rivals, but the economic situation warrants caution, analysts say

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Published: 11:00am, 15 Jul 2023Updated: 11:11am, 15 Jul 2023

Mike Wong Chik-wing, the deputy managing director of Sun Hung Kai Properties, was particularly pleased with his high-speed train experience from West Kowloon to the company’s mega project near Guangzhou South station.

“The journey took slightly more than 40 minutes,” said Wong, highlighting the efficiency and convenience of China’s high-speed rail network, the largest system in the world connecting Hong Kong with major cities in the south of the mainland. He said his experience reinforces the company’s strategy of investing in real estate projects close to mass transit links in the Greater Bay Area to capitalise on the transport convenience.

“We are optimistic about the GBA. The region [accounts for] the company’s second-biggest investment in China after Shanghai,” Wong told the Post in an interview recently.

Wong said SHKP’s focus on a transport-oriented development (TOD) model places emphasis on making full use of mass transit facilities, providing easy access to major cities in the Greater Bay Area and maximising the potential for growth and investment.

An artist’s impression of SHKP’s Guangzhou South transport-oriented project. Photo: Handout

Hong Kong’s biggest developer by market capitalisation has four TODs, all of them in Guangzhou. It has completed two – Tianhui Plaza and Parc Central in Tianhe district. The other two – Guangzhou South Station ICC in Panyu district and Qingsheng in Nansha district – are under development. SHKP has also built the ICC, the tallest skyscraper in Hong Kong next to West Kowloon station, and paid a record US$5.43 billion in 2019 for a site atop the station.

Hong Kong developers are touting the seamless transport network to encourage people from the city and the bay area to live and work within a one-hour commuting radius. Beijing officially launched the blueprint for the Greater Bay Area in early 2019 with the aim of integrating nine cities on the mainland and Hong Kong and Macau and developing it into one of the world’s largest economic and business hubs. Some of the policies launched since then – the Wealth Management Connect scheme, Swap Connect and the dual-currency stock trading – have provided further impetus.