November 23, Cheung Kong Holdings Ltd. (00001.HK), controlled by Hong Kong’s richest man Li Ka-shing, plans to unveil 2 high-end residential property projects worth a combined RMB 10 billion ($1.6 billion) in South China’s Guangzhou in early 2012, the developer announced at a project presentation in the city on Tuesday.
The announcement marks Cheung Kong’s first entry into Guangzhou’s residential property market, despite poor market conditions that have seen prices in China’s first-tier cities, which also include Shanghai and Beijing, begin to decline.
“As long as the products are good, it won’t matter whether we launch them in good or bad times,” Liu Qiwen, director of Cheung Kong’s real estate investment arm, said at the presentation.
“Besides, our properties will be priced at a reasonable level when we launch them early next year,” Liu added.
Hutchison Whampoa Ltd. (0013.HK), which is also owned by Li Ka-shing and has 97% of its property portfolio in mainland cities, also invested in the 2 projects, Liu said without elaborating.
Mainland Market
Cheung Kong has been mainly focusing on the Hong Kong real estate market in recent years, while Hutchison Whampoa targets mainland cities. But that is about to change as the former is getting more ambitious about growth over the border.
Speaking at an event On Nov. 17, Cheung Kong executive director Chiu Kwok-Hung said that the company considers the current liquidity crunch in China a “golden time” for expansion, and that Cheung Kong is actively looking for acquisition opportunities.
Liu said Cheung Kong aims to target first-tier cities in mainland China. A large portion of Hutchison Whampoa’s projects are based in second-and third-tier cities.
Liu also revealed that his company expects to acquire some premium projects in Shenzhen.
Housing prices in Guangzhou fell 0.2% from a year earlier in October, according to official data released last week by the National Bureau of Statistics for 70 cities it monitors.
But high-end properties, in which Cheung Kong specializes, have felt less of an impact from the government’s property curbs in the city.
Between January and October this year, a total of 2,446 villas were sold at an average price of RMB 14,108 per square meter in Guangzhou, up 23% year-on-year, real estate agency Hopefluent Group said in its latest research report.
That compares with a y-o-y growth of less than 5% in the average price of new ordinary commercial residential units over the same period, according to the report.