Subdivided shopping units in mainland China attract investors

Small lump-sum prices and hopes of high investment returns continue to lure Hong Kong investors into buying subdivided units at mainland shopping malls, despite their poor record.

"People are lured into buying as the marketing is attractive," said Centaline Property Agency chairman Sherman Lai Ming-kai, who cautioned that better-performing and more dependable high-quality commercial properties on the mainland could be expensive and not all were open for sale to Hong Kong buyers.

"The attraction of subdivided shops is that they are small and may cost just a few hundred thousand yuan for a unit. The seller may also advertise attractive returns of about 5 per cent or as high as 8 per cent, which cannot be found elsewhere."

Since lump-sum prices are low and returns advertised on the deals are high, the properties appeal to many inexperienced buyers ranging from retirees to housewives, said Lai.

These buyers were seeking higher returns from mainland properties because saving interest rates were so low and the risk of other investments such as foreign currencies could be high.

In response to local investor demand, Hong Kong Property Agency held an exhibition in the city last weekend showcasing mainland developer Teehope's Dongguan retail project, Teehope International Wine City. The mall offers 900 shops sized from 86 sq ft to 1,400 sq ft, with price tags ranging from HK$227,000 to HK$5 million.