There’s no shortage of skeptics in the world about the outlook for China’s real estate market. Yet the chairman of one of the most successful Hong Kong real developers in the mainland in the past two decades says the country is still promising for long-term real estate investors.
“If you were to ask me today, ‘Where are the best opportunities to make a lot of money? ” Hang Lung Group Chairman Ronnie Chan said, “I would say real estate in China.”
Chan made the remarks at the “Real Estate Investment World China 2014” conference held in Shanghai earlier this month during a one-on-one keynote interview that I was invited to hold with him. Beyond his leadership of Hang Lung, Chan is influential as the co-chairman of the Asia Society.
Hang Lung entered the China real estate market in 1992, which Chan said was late relative to others. “If we have any success, it’s not because we got in early. It’s in spite of the fact that we didn’t get in early.”
Hang Lung was founded in 1960 by Chan’s father, Chan Tseng-Hsi, and profited from the former British colony’s rise as a global trade and financial hub. Today, its market capitalization at the Hong Kong Stock Exchange of $7.2 billion is one of the largest among real estate developers whose shares trade there. The family ranked No. 17 on the 2014 Forbes Hong Kong Rich List with wealth of $2.95 billion.
Asked what lessons could be learned from Hang Lung’s early success in China, Chan said businesspeople should pay keen attention to the details of the particular market they involved in.
“Very few people respect the market,” he said. China’s real estate market differed greatly from Hong Kong’s at the time Hang Lung first invested in the mainland. Rather than expanding into several cities, as many Hong Kong developers did that time, Hang Lung also tried to succeed just one place, Shanghai.
Today, two of Hang Lung’s initial investments in the city -- Plaza 66 in Grand Gateway 66 -- are among Shanghai’s best-known commercial buildings.
-- Follow me on Twitter @rflannerychina
