Hong Kong Exodus to U.K. Could Be Boon for Developer Far East
(Bloomberg) -- Hong Kong property developer Far East Consortium International Ltd. is hoping to capitalize on a potential mass exodus of citizens to the U.K., where it is spearheading a huge urban renewal project.
The British government’s decision to offer residency to about 3 million people as its former colony comes under increasing Chinese control has created a large pool of potential buyers.
“We have been in the U.K. for many years and it so happens that more and more people would like to invest in the U.K. nowadays,” Far East’s Managing Director Chris Hoong said in an interview. Being a familiar name could be an advantage, he added.
“It certainly helps,” Hoong said. “Because we are listed on the Hong Kong stock exchange, people know us. Especially when a buyer who’s buying off-the-plan, you want to make sure that the project will get delivered.”
The mid-sized firm is developing more properties in the U.K. than larger rivals such as New World Development Co. and China Vanke Co., mostly in Manchester where it is building the city’s biggest residential renewal project. That has proved to be a timely deal because Manchester has become a popular option for Hong Kong people looking beyond London because of its cheaper housing and good schools.
Tapping demand from Hong Kongers moving to the U.K. could help Far East offset a downturn in its home market as people leave the city. The developer’s shares have slumped 30% this year, one of the largest declines among Hong Kong-listed developers. The Hang Seng Properties index, which tracks the city’s largest real-estate firms, has fallen 19%.
The firm also builds homes in mainland China, Singapore, New Zealand and Australia, with the latter being its largest source of revenue in the six months ended Sept. 30.
The British government estimates that 123,000 Hong Kong citizens may relocate to the U.K. in 2021, “which could weaken Hong Kong’s home demand and compress rental yields to a new low,” Bloomberg Intelligence analyst Patrick Wong wrote last month.
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