After two years of not doing deals, developer Hang Lung Properties (illustrated is the Hang Lung Grand Gateway Mall in Shanghai) has bought two pieces of land in mainland China within a week, the latest sign that some leading commercial developers are starting to see value in China’s battered markets.
Hang Lung’s purchases, for a total of about RMB5 billion(US$733 million), come as other developers are slowly returning to the market.
Earlier this month, developer Shanghai Shimao Commercial Group spent RMB920 million to acquire a piece of land in the northern coastal city of Qingdao that it plans to develop into a mixed-use property. The acquisition is Shimao’s first since January 2008.
China Resources Land, the property arm of Beijing-controlled conglomerate China Resources Holdings, has raised US$555 million in a share placement to fund future land acquisitions.
Hang Lung’s latest purchases, both of which are from local governments, include a RMB4.5 billion deal in the northeastern city of Dalian and a RMB415 million purchase in the eastern city of Wuxi. The Dalian property will be developed into a 223,000-square-meter shopping mall, while the Wuxi site will be added to an adjacent shopping mall already under construction.
The Wall Street Journal states that in recent years, Hang Lung has become a favorite of property analysts because of its track record of making timely buys during market dips.
The company sat on its hands during a sharp run-up in prices in its home Hong Kong market during the 1990s, allowing it to snap up properties cheaply after a housing collapse in 1997.