China property firms buy Hong Kong land piece for record price

HONG KONG (REUTERS) - Two mainland Chinese property companies snapped up a piece of Hong Kong residential land at a record-breaking price on Friday (Feb 24), highlighting once again the territory's skyrocketing real estate prices.

Unicorn Bay (Hong Kong) Investments, a unit of Shenzhen-based Logan Property Holdings, and Guangzhou-based KWG Property Holding, outbid 13 competitors when they jointly won the tender at a price of HK$16.9 billion (S$3.07 billion), shattering the previous HK$11.8 billion mark set two decades ago.

Mainland Chinese developers have been aggressively buying land in Hong Kong, gobbling up 29 per cent of the land sold in 2015-2016.

Hong Kong's Financial Secretary Paul Chan earlier this week warned that the city's astronomical property prices continued to be an issue.

The buying frenzy has also raised concerns that home prices, currently at a historic high in one of the least affordable cities in the world, would continue to rise.

Moreover, it has deterred some major local players, including Hang Lung Properties and Hopewell Holdings, from bidding for land.

A top government official said on Thursday that competition from Chinese developers is not an issue as Hong Kong is a free market that welcomes competition from abroad. "It does not matter where the capital is from. The most important thing is they are investing in Hong Kong, and they are here to build homes for Hong Kong people," said Secretary for Development Ma Siu Cheung.

This marked the first time Logan Property, ranked 32nd largest in China, and KWG Property successfully bought land in Hong Kong. The companies said in a joint press release that the plot of land, offering a panoramic view of the ocean in southern Hong Kong island, is a "rarity".