Investor’s Darling
It is no wonder, that this environment attracts a growing number of real estate investors. At the end of March 2005, Macquarie Global Property Advisors acquired the Vicwood Plaza in Central from Morgan Stanley for 335 million USDollars. The ”Hong Kong Standard” described this deal as ”proof of a growing trend in which Asian REITs and funds – especially from Singapore and the U.S. – are scouting Hong Kong for appropriate properties to add to their portfolios, in order to raise their returns.” According to Colliers International, overseas investors contributed around ten percent to the total revenue of 7.7 billion US-Dollars in Hong Kong commercial real estate last year.

Photo: Hong Kong belongs to one of the most densely developed cities in the world. Consequently, there are only a few vacant spaces left for new projects. This space deficit is putting tight limits on further expansion in the market.

Limited expansion opportunities
However, developers with a long-term perspective are starting to anticipate only limited room for expansion in the densely populated city. ”Project developers will consider themselves lucky if they can build and sell as many apartments in the next ten years as they did in the preceding decade”, said Clifford Lam, a real estate analyst with Merrill Lynch in Hong Kong. The city’s developers, therefore, are more and more attracted to China. Hong Kong’s best-known and richest real estate tycoon, Li Ka-shing, has already invested 13 billion US-Dollars in mainland China. Around 60 percent of his worldwide land stock is now in China. During the last 13 months, Cheung Kong und Hutchison Whampoa, both conglomerates controlled by Li Ka-shing, have signed eleven deals in China. Of these investments, 82 million USDollars were committed to Shanghai, 71 million US-Dollars to Chengdu, 72 million US-Dollars to Changchun and Changsha, 418 million US-Dollars to Wuhan and 73 million US-Dollars to Chongqing in central China.

By Manfred Schubert