Hong Kong developers show little interest in Qianhai zone
August 6, 2013 Leave a comment
Hong Kong developers show little interest in Qianhai zone
Staff Reporter
2013-08-06
Excellence Real Estate Group made its first payment of 6 billion yuan (US$980 million) on July 30 for two plots of lands acquired at the first auction held for the Qianhai special zone in Shenzhen a week earlier. But at the auction on July 26, there were no bids offered by Hong Kong’s major developers, who had been expected to take part. The bids offered by mainland Chinese companies were rather conservative. The prime land will cost the Shenzhen-based Excellence 12.3 billion yuan (US$2 billion) in total — 5.19 billion yuan (US$847 million) for T201-0077 and 7.18 billion yuan (US$1.27 billion) for T201-0075.Both the office of the Shenzhen Qianhai Administration and the participating developers wanted to assess land values in Qianhai through the auction, which borders Hong Kong. But the first auction did not see as much fevered bidding as expected.
Qianhai has been dubbed the engine of Shenzhen’s development for the next decade, which will also be a test for China foraying deeper into the global market. According to the Beijing-based Economic Observer, the number of companies taking part in the bid was lower than expected, with five companies bidding for T201-0077 and six for T201-0075.
The Qianhai office had originally been optimistic about receiving bids from Hong Kong-based companies.
A Hong Kong-based developer said capital was not an issue compared with the mainland developers. They were willing to spend a fortune as long as the conditions were right.
What concerned them was the changing policies and environment on the mainland. Additionally, Hong Kong companies placed more emphasis on running their own operations and sustainable management, while mainland developers prefer a quick turnover, which might damage the operational environment and quality of the Qianhai zone.
Hu Can, an official at the Qianhai administration office, told the paper that the office would release another plot of land on Aug. 16 and put another eight to 10 plots of land up for auction by the end of this year.
Hu added that the office will not release too many plots at one time, since there were many factors to be considered before holding an auction.
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