Recently, there was an article discussing why Hong Kong developers failed Shenzhen. (Getty Images)
It is normal for Hong Kong people to go north to eat. Recently, Cushman & Wakefield even reminded Hong Kong merchants to reflect on the changes in consumption patterns, pointing out that the trend of Hong Kong people Kong goes north and mainland brands go south to integrate into the Hong Kong market continues. Hong Kong people are increasingly going to Shenzhen to eat, which has affected local shopping malls. When Link announced its results a few days ago, it also admitted that residents of the northern area will go north to spend on weekends, which will have some time. impact on its shopping centres.
According to estimates quoted by Shenzhen News Network last year, Hong Kong people spent at least 3.6 billion yuan in Shenzhen in one month. The question is, can Hong Kong businesses and enterprises benefit from this? Recently, there was an article in the Mainland about the development of Hong Kong companies in Shenzhen over the years, which discussed this issue.
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Hong Kong developers have many iconic projects on the mainland, such as Taikoo Li Sanlitun in Beijing and IFC in Shanghai (photo) (SOPA Images / LightRocket via Gett)
no defectbig landlandmark project
Hong Kong developers such as Sun Hung Kai, Wharf, Swire, Shui On, New World, Henderson, Kerry, and Hong Kong Land have been developing on the mainland for many years. “Why have they together lost Shenzhen?”
Major developers in Hong Kong have many iconic projects on the mainland, such as Taikoo Li Sanlitun in Beijing, IFC Shanghai, Plaza 66 in Shanghai, Taikoo Hui in Guangzhou, etc. Plaza 66 in Shanghai opened as early as 2001, which can be said to have laid the foundation for famous domestic shopping malls. pattern, when the Apple IFC Shanghai store opened, it also caused a stir in the country; according to Hang Lung’s annual results in 2023, the revenue of the “high-end office building portfolio” increased by 5% The basis for its growth, the increase was mainly driven by Shanghai Hang Lung Plaza, Supported by office rents in rise, Hong Kong companies have contributed to mainland shopping center investments for many years.
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Calculated in terms of full year sales growth in 2023, Longhua Yifangtiandi has the strongest growth, with sales increasing by 46% year on year.
Shenzhen is rarely mentioned in the performance of Hong Kong companies
However, “Shenzhen” has rarely appeared in Hong Kong developers’ plans in the past. This article from the “Unicorn Mall” media searched for annual report performance keywords and found that “Shenzhen” appeared only 4 times. in Hang Lung’s 2023 annual report, while Kowloon Cangcang’s 2023 annual report only mentioned “Shenzhen” once, and although SHKP mentioned it as many as 9 times, it was only mentioned for residential promotion and had no plans to invest in Shenzhen.
Checking the data, based on the annual sales growth in 2023, there are many key shopping centers in Shenzhen with an increase of more than 20% in traffic, including Futian Galaxy COCOPark, Shenyip Uptown, SCPG Center, Longhua Yifang Tiandi, Zhuoyue Hui, and KK ONE Wait, many of them are shopping areas that have become very popular among Hong Kong people in recent years. Among them, Longhua One Square has the strongest growth, with sales of increased by 46% year on year. Yifangtiandi is operated by the mainland enterprise Hong Rongyuan Group. Founded in 1991, Hong Rongyuan is one of the new companies in the early years of Shenzhen’s opening and reform. This is the “younger generation” of local developers and it focuses on the investment and development of commercial real estate and management, it is now a large comprehensive enterprise group.
It seems that none of the “good business” shopping malls in Shenzhen today are operated by Hong Kong investors.
In the 1980s and 1990s, “Shenzhen was just a small fishing village under development”, just like the third-tier cities it is today (Corbis via Getty Images)
Wrong timing and geography
According to the analysis of this article, in the 1980s and 1990s, Shenzhen was “only a small fishing village under development”, just like the current third-tier cities. Compared to Shanghai and Beijing, the timing may have prevented Hong Kong businessmen from choosing to go to Shenzhen; Geography is also the reason why Hong Kong businessmen rarely invest in Shenzhen The article believes that at that time Hong Kong was a shopping paradise, and Shenzhen business had the opportunity to influence the development and use of commercial Hong Kong projects in a hidden manner. As for Shenzhen, local people have always had an advantage when investing in it. In particular, China Resources is “just one company”. This situation continues today. With the addition of powerful developers such as China Merchants Shekou, OCT, and Hong Rongyuan, the local ones are becoming more and more powerful, and it is not easy for outsiders to join.
At the end of the article, Swire’s latest statement was quoted as “actively seeking new opportunities in Shenzhen,” pointing out that Hong Kong companies seem to be paying attention to Shenzhen’s potential business prospects, and also noted that New World is about to achieve “zero breakthrough” for Hong Kong companies, and the Shenzhen Prince Bay K11ECOAST project is about to open. As a result, Shenzhen introduced its “first high-end commercial project developed by a leading Hong Kong company.”
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K11 ECOAST is located in Prince Bay, Shekou, Qianhai, Shenzhen and will open at the end of this year
Hong Kong businessmen buying shopping malls outright?
However, the article did not mention any examples of Hong Kong companies buying shopping centers directly. According to a Yahoo Finance article last year, “Hong Kong Shopping Trend A Sell-off?” 》 analysis article, Link Center City, one of the popular shopping centers in Shenzhen where Hong Kong people now love to eat, shop and play, is the renovated project after Link acquired Shenzhen Futian Commercial Center New Yijing at a cost of 6.6 billion yuan at the beginning of 2019. , but today’s shopping malls in Shenzhen are all highly valued. One China Resources Land Shenzhen MixC is valued at 16.43 billion yuan. whether it is worth buying from Hong Kong companies is another mathematical question.
Article review:
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