Li Ka-Shing Says Hong Kong May Lose Out to Shanghai; Hong Kong Most Costly City for Office, Home Rents, Savills Says

Li Ka-Shing Says Hong Kong May Lose Out to Shanghai: RTHK

Li Ka-shing, Asia’s richest man, said Hong Kong needs to raise its competitiveness if it wants to avoid losing out to Shanghai, where China is setting up a free trade zone, Radio Television Hong Kong reported. Li, the 85 year-old chairman of Hong Kong-based Cheung Kong Holdings Ltd. (1) and Hutchison Whampoa Ltd. (13), said the Shanghai free trade zone “will affect Hong Kong heavily,” RTHK reported on its website, citing Li’s comments at a briefing today.The zone may allow freer yuan convertibility, liberalize interest rates and relax restrictions on foreign investment as part of Chinese Premier Li Keqiang’s drive to sustain growth by shifting the economy toward services and consumption from investment and exports. It also pushes forward China’s goal of making Shanghai a global financial center by 2020, threatening to undermine Hong Kong’s role.

The trade zone will help improve the country’s competitiveness, World Bank President Jim Yong Kim said this month. China’s economy expanded 7.7 percent last year, the slowest since 1999.

Cheung Kong’s Li is 17th on the Bloomberg Billionaires Index with an estimated net worth of $27.7 billion.

Hutchison Whampoa, Li’s biggest company, last month received at least eight offers from suitors for ParknShop, one of Hong Kong’s two biggest supermarket chains, according to people with knowledge of the process. The company is looking into a sale as it accelerates overseas investment and expands in telecommunications.

Staying Put

Li said today he won’t move Cheung Kong and Hutchison Whampoa away from Hong Kong, RTHK reported. Any sales of his businesses in the city will depend on the political and economic environment globally and locally, and the sale of the supermarket chain is a “commercial decision,” Li said.

Hong Kong’s home prices have more than doubled since early 2009 and are highest among major global cities, according to a Savills Plc report in March, prompting the government to impose measures including extra taxes on foreign property buyers and higher mortgage down payment requirements as it seeks to reduce the risk of an asset bubble.

Li, whose Cheung Kong is the city’s second-biggest developer by market value, said the impact of those measures will show next year, declining to predict how home prices will perform, RTHK said.

Li also said that Occupy Central, the movement proposed by some civic groups to pressure the government into accelerating the introduction of full democracy in the city, may damage Hong Kong’s economy and its reputation as a financial center, according to the RTHK report.

To contact the reporter on this story: Benjamin Haas in Hong Kong at bhaas7@bloomberg.net

Hong Kong Most Costly City for Office, Home Rents, Savills Says

Hong Kong is the most expensive city in the world to rent business and residential space, according to a report by Savills Plc. (SVS)

New York displaced London as the world’s second-most expensive city in the first half of 2013, the World Cities Review, which measures costs in the world’s 10 leading cities, released today showed. New York was ranked fifth at the beginning of 2010, the London-based property broker said.

Hong Kong’s home prices have more than doubled since early 2009 to a record, raising concerns of an asset bubble and stoking public discontent. The city also has the world’s most expensive retail rents and its Central business district was the costliest district to rent an office until it was overtaken by London’s West End at the end of 2012, according to Cushman & Wakefield Inc.

It would cost $1.63 million per year for a seven-person team to set up in Hong Kong, the most expensive, according to Savills Executive Unit, a core business unit measure the broker uses to compare costs across cities. New York came second with $1.55 million and London third with $1.53 million, according to the report.

Singapore offered businesses locating there the best-value accommodation in relation to the size of its economy, Savills said in the report.

To contact the reporter on this story: Pooja Thakur in Singapore at pthakur@bloomberg.net