Shui On Land cashes in on opportunity to build land bank in China amid depressed buying sentiment
- Shui On Land, the flagship property company of the Hong Kong-based Shui On Group, has acquired three residential parcels in Wuhan for US$2.67 billion
- Participation from Chinese developers in land sales have cooled in recent months because of their liquidity crunch
Cash-rich Hong Kong companies are increasingly snapping up prime land on the mainland, which used to be few and far between until recently, as their Chinese rivals weighed down by debtavoid taking part in land sales.
The Shanghai-headquartered developer bought the parcels in Wuchang district, which forms part of the urban core of Wuhan and is one of the city’s 13 urban districts, as part of a joint venture. The plots were part of Wuhan’s third land sale of the year. A total of 33 parcels were sold on Tuesday that fetched 40.87 billion yuan.
“Mainland private housing companies have encountered resistance in acquiring land, similar to liquidity,” said Yan Yuejin, research director at the Shanghai-based E-house China Research and Development Institute.
The liquidity crunch of Chinese developers has given Hong Kong-based housing companies more room to acquire land and invest in some large-scale real estate projects, he added. “This fully shows that the capital situation of Hong Kong-based enterprises is not bad, while the potential for land acquisition is huge.”
