Hong Kong rail operator looking to export trains-and-property business overseas

Hong Kong rail operator MTR Corporation is already in talks to develop commercial and residential property above railway stations in London and Stockholm.
Hong Kong rail operator MTR Corporation is already in talks to develop commercial and residential property above railway stations in London and Stockholm. PHOTO: BLOOMBERG

HONG KONG - Hong Kong rail operator MTR Corporation is looking to export its trains-and-property business abroad in a bid to strengthen its presence in competitive markets in Europe and elsewhere.

The company is already in talks to develop commercial and residential property above railway stations in London and Stockholm, according to MTR Corporation chairman Frederick Ma Si Hang, who said managers in these countries were not maximising the commercial potential.

Later this year, MTR is likely to also submit a joint bid with UK developer Canary Wharf Group to redevelop Euston Station, one of London's busiest railway hubs and the proposed terminal of Britain's first domestic high-speed rail line, reported The South China Morning Post (SCMP).

The Euston project would cover 22 hectares, mixing property development with rail services through a mix of new buildings above and around both the current Euston station and the future high-speed rail station.

Separately, MTR Corp is also bidding for the franchise to operate the high-speed line between London and Birmingham in a consortium with China's Guangshen Railway.

"Some companies in London, Sweden and Australia are interested in our property and rail business model and approached us already," Mr Ma said during a visit to MTR Corp's rail services in London last week.

"When evaluating these projects, we stick with our principles. We need to have good partners for a long-term partnership, and a reasonable return from investments."

Amid a slowdown in the booming business of property development above railway stations in Hong Kong, MTR Corp sees the overseas businesses as a new source of growth. Currently, the company's overseas portfolio contributes HK$779 million (S$137.46 million) to MTR Corp, about 8.2 per cent of its total profit of HK$9.44 billion.

Dr Billy Mak Sui Choi of Baptist University's business school said the success of MTR Corp's overseas plans would depend on factors such as local people's appetite to live close to train stations and the cost of building a rail line.

"Not many are like Hong Kong and mainland Chinese who prefer convenience, and live above trains stations," he told SCMP.