Hong Kong developer eyes local buyers
25/3/2003 14:24
Banking on strong buying power in Shanghai's booming real estate
sector, a Hong Kong property developer is turning to the mainland Chinese city
to lure home purchasers, today's International Finance News said, quoting real
estate analysts.
Hong Kong leading property company Cheung Kong
(Holdings) Ltd. came to Shanghai last Wednesday to promote its luxury housing
project on the island.
Chiu Kwok Hung, Executive Director of Cheung Kong,
dubbed Hong Kong's "property god", came to the city for the
promotion.
Seeing the promotion as a test of the local waters, Chiu said
his company has planned the event for several months. It was postponed for a few
weeks due to the U.S. attack on Iraq, which the company worried would dampen the
economy here.
The war has had little effect on the Shanghai and Hong Kong
economies so far, he said, and expected it could even boost the economy in the
two cities by forcing global investment out of the Middle East to safer
Asia.
A Cheung Kong Securities analyst said investment in Shanghai's
property sector soared more than 70 percent to 31.8 billion yuan (US$3.8
billion) in the third quarter of 2002 from the same period a year
before.
The luxury property project being promoted by Cheung Kong is
priced at HK$70,000 (US$8,974) a square meter, compared with 10,000-yuan
(US$1,209) per square meter for Shanghai's top housing
projects.
Acknowledging the price gap, Chiu believed the local market
would react warmly to the Hong Kong property, saying it's a good time to buy
into Hong Kong's weak housing market.
The Hong Kong market has plunged 65
percent since its peak, when the Cheung Kong project could have carried a price
tag of HK$200,000 a square meter, nearly triple the current one.
Despite
the price drop, the luxury project will be profitable, Chiu added, because costs
have also declined in the economic slowdown.
Other Hong Kong property
developers are reportedly planning to attract buyers in Shanghai, including Shui
On Properties Ltd, Swire Properties and Sun Hun Kai
Properties.
Jane Chen / Shanghai Daily news
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