But such aggressive expansion may come under the scrutiny of Beijing, which is pressing forward with crackdowns under its “common prosperity” goal.
Earlier this month, major real estate company New World Development said it will start managing commercial facilities in Shanghai under its K11 brand.
K11 already operates mixed-use malls and buildings targeting young people in such mainland cities as Guangzhou and Shenyang, and aims to set up 10 more locations by the end of 2023.
Although New World is not acquiring any assets with the new facility managing business, it unveiled plans last August to invest 4.8 billion yuan in an urban renewal project in Guangzhou.
“Only we have the financial strength to buy land at a low cost”, CEO Adrian Cheng boasted.
Cheng said the company will not be impacted by Beijing’s tighter rules on debts owed by real estate companies – which led Evergrande to scramble to sell assets – saying that they provide a good opportunity to acquire land at low cost.
With investment coffers of HK$100 billion, New World is setting aside HK$20 billion for real property acquisitions.
Hang Lung Properties is set to offer high-end apartments in Wuhan in the first half of 2022.
“Fewer developers buy land during a downturn,” said chairman Ronnie Chan, noting that the company is now assessing various mainland cities.
Hang Lung is focusing on upmarket commercial buildings and serviced apartments.
Its mainland operations generated nearly 70% of its 2021 revenue, making up for a decline in Hong Kong.
Rent income from luxury shopping malls in Shanghai and Wuxi posted double-digit gains on the year.
The company is also pursuing serviced-apartment projects in cities like Kunming and Shenyang.
UK-affiliated Swire Pacific is exiting from the money-losing oilfield vessel business and allocating resources to its broad portfolio ranging from Chinese properties and beverages to healthcare.
Its Coca-Cola bottling unit is building a factory in Zhengzhou, while Swire is also taking part in a commercial development project in Xi’an.
The company has earmarked HK$100 billion for investment over the next 10 years, with half going to the mainland.
Meanwhile, Hong Kong players are picking up the slack left by increasingly troubled Chinese peers.
New World and fellow Hong Kong developer Far East Consortium International agreed in November to buy a residential development at the former site of a Hong Kong airport from embattled Kaisa Group and others.
Sun Hung Kai Properties broke ground at the end of 2021 on an integrated project at Guangzhou South railway station that will include office towers, a shopping mall and a hotel.
Last November, Henderson Land Development bought a prime harbour-front spot from the Hong Kong government for HK$50.8 billion, a record-breaking bid for a publicly owned plot.
“A significant difference between Hong Kong and mainland Chinese developers is their risk appetite”, says Gary Ng, an economist at French investment bank Natixis. Hong Kong companies are conservative and put an emphasis on the profitability of projects rather than market share, he says, noting that they stayed on the sidelines when property prices soared, and joined the market when prices fell to reasonable levels.
CK Asset Holdings has been unloading assets, exiting from the aircraft leasing business and selling a London office tower.
Business tycoon Li Ka-shing, the founder of CK Asset, is good at “buying cheap and selling high”, said Dickie Wong, executive director for research at Kingston Securities.
Wong speculates that CK Asset may be eyeing a utility business or renewable energy.
Li Ka-shing and Lee Shau-kee, the founder of Henderson, took the top two spots in Forbes’ list of Hong Kong billionaires, a testament to the financial power of real estate-backed conglomerates.
But such a small group of the richest people may be coming under attack from president Xi Jinping’s “common prosperity” drive, as Beijing tightens its political grip over Hong Kong property conglomerates.
China reduced the real estate industry’s seats on Hong Kong’s election committee, tasked with picking the city’s chief executive.
“Everyone who overreacts to Beijing’s common prosperity pronouncement has forgotten that China is a socialist state, albeit practicing market economics in the past four decades,” said Ronnie Chan in his letter to shareholders.
He vowed to give away “all or substantially all” of his wealth.
“We do not believe in inherited wealth; we prefer to recycle the capital back to society.”