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Beijing credit curbs hurt mainland firms
Hong Kong developers such as Sun Hung Kai Properties are seizing the advantage from their mainland rivals whose land bank acquisitions are being constrained by Beijing's tightened credit policies.
With no competition, Sun Hung Kai Properties won a 12.1 million square foot commercial-residential site in Chengdu at the opening bid of 3.11 billion yuan.
'The austerity measures and tightening bank loans have severely hit developers that have less capital,' said Dickson Wong Hung, a director  of Centaline (China) Property Consultant.
Starting in September, developers  were required to fully pay for the land before construction could begin. Previously, land payments could be made in  instalments according to the property's developmental stage.
The new policy imposed a heavier financial burden on developers and favoured cash-rich listed property developers at auctions or in mergers and acquisitions, said an analyst.
Guangzhou Investment yesterday announced it acquired two sites in Jinshazhou in Guangzhou for 523 million yuan to develop a large-scale, low-density, high-end project.
On Monday, China Resources Land acquired a  site in Beijing with the highest bid at 1.5 billion yuan, 238 per cent higher than the opening bid of 443 million yuan, according to the local government's website.
The 201,496 square metre site, located in Mentougou district, a new development area in west  Beijing, could be developed into a residential project with a total gross floor area of 286,120 square metres.
Li Wenjie, a general manager at Centaline (China), said: 'The land price of the site in Mentougou district is high. The unit price was similar to other sites in suburban areas sold in the first half of the year, before the mainland government imposed cooling measures.'
Property prices in the area ranged between 8,000 yuan and 9,000 yuan per square metre. He expected the price of China Resources Land's project needed to reach 10,000 yuan per square metre to be profitable.
He believed China Resources Land was willing to pay aggressively for the site because it did not acquire many sites this year. 'Many developers are no longer aggressive in acquiring land because after the government's cooling measures last month they found it difficult to get financing.
'The local government failed to sell a 660,000 square metre residential site in Chaoyang district early this month, although the site is in a good location.'
While some mainland developers may find the environment more challenging, Hong Kong developers see  big opportunities. Sun Hung Kai  last week  teamed up with Guangzhou R&F Properties and KWG Property Holdings to develop a 10 billion yuan multi-purpose complex in Guangzhou.
Wharf (Holdings) has acquired more than 10 billion yuan of land in Chengdu and Hangzhou in this quarter through joint ventures.
No contest
The opening bid that won SHKP a mixed development site in Chengdu, in yuan: 3.11b yuan



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