Aug. 9 (Bloomberg) -- China Vanke Co., the biggest developer by market value traded on the nation’s exchanges, plans to expand in Hong Kong’s property market after home prices more than doubled in the city.
Vanke will also target foreign markets where Chinese buyers are active, including San Francisco, New York, Boston and Singapore, President Yu Liang told reporters in Hong Kong yesterday. Of all the target cities, the developer prefers Hong Kong and expects to increase investment there, Yu said.
“We are very optimistic on Hong Kong’s property market in the long term and are looking forward to working with different partners,” Yu said. “We will seize every opportunity to buy land there.”
Vanke expanded overseas this year as Chinese developers take advantage of demand for real estate around the world from Chinese nationals and as prices at home soar. Vanke signed a deal with Tishman Speyer Properties LP in February to develop two residential towers in San Francisco and in April it agreed to buy 30 percent of Sherwood Development Pte., a unit of Singapore’s Keppel Land Ltd.
The Shenzhen-based developer entered Hong Kong in January when its unit jointly won a HK$3.43 billion ($442 million) bid for a site with New World Development Co. Vanke last year paid HK$1.08 billion for a 74 percent stake in Winsor Properties Holdings Ltd., which was renamed Vanke Property Overseas Ltd.
Vanke will mainly focus on the residential market in the city, and it may invest without local partners, Yu said.
Home prices in Hong Kong have more than doubled since early 2009 on an influx of mainland Chinese buyers, near record-low interest rates and a lack of new supply.
“If there are good opportunities, why not?” Yu said. “We can’t always just sit on the bench.”
A unit of China Overseas Land & Investment Ltd. paid HK$4.54 billion for two sites in the city’s Kowloon East district, the government said in June.
Vanke reported on Aug. 6 that first-half profit climbed 22 percent on year to 4.56 billion yuan ($745 million), as it sold more small and medium-sized homes.
China’s home prices will stabilize in the second half of the year as the government focuses on the long-term development of the market rather than cracking down on it, Yu said.
China will seek a “stable and healthy” development of the property market, the Communist Party’s Politburo said July 30, the first time this year authorities didn’t mention further tightening of curbs, according to Credit Suisse Group AG and Orient Finance Holdings (H.K.) Ltd.
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