China’s second-largest developer by sales continued to expand its holdings outside the mainland this month as Shenzhen-based Vanke agreed to pay HK$3.8 billion ($490.12 million) for a residential site in Hong Kong’s New Territories.
Vanke, which is led by billionaire adventurer Wang Shi outbid nine Hong Kong developers including such heavyweights as Sun Hung Kai Properties, Cheung Kong Property Holdings, Henderson Land Development and Wheelock Properties for the 2.7 hectare (6.67 acre) site in the city’s Tuen Mun area.
The project is Vanke’s third in Hong Kong as the company that made its name developing mid-range housing for China’s emerging middle class has now expanded its portfolio to include developments in the US and Malaysia, as well as on the mainland and in Hong Kong.
Vanke’s acquisition in Hong Kong comes as Chinese home buyers are once again flooding into the city, despite government taxes and fees on housing purchases by out of town buyers.
Vanke Getting Ready to Build 78,000 Sqm of Apartments
The Chinese developer’s new site in Hong Kong is large by local standards, and with the plot ratio allowed by the authorities, will enable Vanke to build 841,745 square feet (78,000 square metres) of new housing.
Although Vanke outbid its competitors, the price paid by the developer was still in the middle of analyst estimates cited by Reuters of between HK$3.6 billion and HK$4.2 billion for the site.
Vanke is now among the most active of China’s developers in Hong Kong after buying a residential site in Wanchai district for HK$860 million ($111 million) last year. In 2013 the company bought its first Hong Kong plot for building new homes in the city at Tsuen Wan, in the New Territories, for HK$3.43 billion ($443 million).
Lower interest rates in China are said to have spurred a resurgence in Hong Kong home buying by mainlanders this year, with analysts at property consultancy Knight Frank saying that 80 percent of the top ten luxury deals in the city have involved mainland buyers. The wave of new purchases from China comes despite a 15 percent stamp duty on buyers from out of town.
Vanke Also Active in Malaysia and the US
In addition to its Hong Kong projects, Vanke has also spread its investments into Malaysia and the US.
In April of this year the Chinese developer bought a majority stake in the historic Bush Tower in Manhattan for $125 million. The acquisition was Vanke’s second investment in New York after it joined forces with US developers and RFR and Hines to start building a 61-storey luxury tower in Manhattan in 2014. Chinese bad asset bank Cinda, is also involved in funding that project.
In 2013, Vanke became one of the first Chinese companies to invest in the US when it signed a deal with American developer Tishman Speyer to develop the $620 million Lumina condo project in San Francisco.
In January of this year Vanke committed to its first project in Southeast Asia by joining a flood of Chinese developers launching housing complexes in Malaysia’s Johor Bahru state. The Shenzhen developer is said to have paid RM 4 billion ($1.12 billion) for a 60 hectare seafront site in the area bordering Singapore.
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