Billionaire Li Ka-shing (李嘉誠) is getting back into Hong Kong’s housing market, with his property unit buying its first plot of residential land from the government in four years.
Li’s Cheung Kong Property Holdings Ltd (長江實業地產) is to pay HK$1.95 billion (US$251.33 million) for the New Territories site, the Hong Kong Lands Department said in a statement on Wednesday.
Designated for private residential purposes, the site has a maximum gross floor area of 22,676m2.
The purchase is a welcome boost for Hong Kong’s housing market, where large developers have been reluctant to make high bids on land after home prices fell and sales slowed earlier this year, making way for smaller local companies and mainland Chinese firms.
Sun Hung Kai Properties Ltd (新鴻基地產), Hong Kong’s largest developer, last month outbid 10 other companies with a HK$2.4 billion offer for a site in the same Sha Tin area, its first residential land acquisition since June last year.
Li, Hong Kong’s richest man, was until recently one of the biggest players in the territory’s property market, buying 37 percent of the land sold by the government in 2011, and a further 6 percent the following year. Since then, he has been largely absent.
“It shows they are optimistic, particularly on the luxury residential segment,” said Ben Kwong (鄺民彬), executive director of KGI Asia Ltd (凱基證券亞洲).
“I do not think it is a strong signal they are bullish on the property market as a whole,” he said.
There have been signs of a property rebound in Hong Kong, where prices have fallen from their all-time high in September last year.
After slumping as much 13 percent between September last year and March this year, home prices have risen in recent months and transaction volumes rose last month to the highest in 14 months.
Prices are still more than 6 percent below last year’s peak, according to Centaline Property Agency Ltd (中原地產).
Eighty-eight-year-old Li, who has spent billions of US dollars in investments in European telecom assets since 2010, said in an interview earlier this year that Hong Kong was going through its toughest times in two decades amid a widening wealth gap.
On the property side, he has often alluded to rising land costs in Hong Kong and China.
Last year, in a media briefing, Li said in Cantonese that the cost of “flour,” or land, now exceeds the price of the “bread,” or apartments.
Li’s fellow octogenarian billionaire Lui Che-woo (呂志和) earlier this month said he was having trouble reading the territory’s property market these days.
“Recently, land prices have surged so much,” said Lui, who has spent more than 50 years as a property developer. “I really do not know what is happening right now.”
Other bidders on the New Territories plot included Wheelock Properties Ltd (會德豐地產), Vanke Property (Overseas) Ltd (萬科置業) and Sun Hung Kai Properties, the lands department said.
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