The emergence of Hutchison Whampoa, owned by Li Ka-shing, which is regarded as a "bellwether of the investment community", has brought a topic to the first round of concentrated earth shooting in Guangzhou in 2022.

A few days ago, the first round of soil racket in Guangzhou ended. Although Hutchison Whampoa failed to win the plot, it was the first time that Hutchison participated in a public soil auction in the mainland after nearly 10 years.

Industry insiders said that Guangzhou land prices are relatively cheap and have great investment potential. Li Ka-shing's participation in this auction may lead to a re-evaluation of his investment direction in the market.

Reference to Guangzhou plot

On May 5, the first round of soil racket in Guangzhou ended. Baiyun District Airport Avenue in the east side of the AB2904003 plot registration stage has attracted Poly, Yuexiu, China Sea and other real estate enterprises, Hutchison Whampoa is also in the list.

According to the bid record, Hutchison Whampoa was the first to bid 2.36 billion yuan as soon as it was time to make an offer on April 30. Until May 5, after several rounds of fierce fighting, China Shipping won the land with a ratio of 2.72 billion yuan plus residential ownership, with a premium rate of 15%.

What is quite topical is that although Hutchison Whampoa failed, it once again appeared in the mainland public soil auction market after its public auction in Wuhan in December 2012.

"the land price in Guangzhou is relatively cheap and has great investment potential. After investing in Vietnam, Li Ka-shing sold the Guangzhou market, which shows that it is judged according to the market situation. And this time to participate in Guangzhou soil auction, or change the market's misunderstanding of Li Ka-shing's divestment. Yan Yuejin, research director of the think-tank Center of the Yiju Research Institute, said.

Lu Wenxi, chief analyst at Zhongyuan Real Estate in Shanghai, believes that Guangzhou is a first-tier city, and it is a good time to intervene at a low price in the context of a depressed market and favorable policies.

As a matter of fact, the local market has been in the doldrums recently. From the point of view of the land auction in Guangzhou, of the 18 plots, 15 were sold at the reserve price, 2 at a premium and 1 at a failed auction.

Continuous selling of assets

Unlike this "increase", Li Ka-shing has paid more attention to selling assets in recent years.

On March 11, CK Asset announced that he planned to sell his property in London for 730 million pounds. This is another huge asset sale since the sale of the aircraft leasing business for $4.281 billion in December 2021.

The property is the headquarters of UBS in London and was originally owned by the British property company British Land Co. Co-developed and held with Singapore sovereign fund GIC. CK Asset bought the property for £1 billion in June 2018.

CK Asset said that the expected return of the asset group on the sale was about £108 million, releasing the potential value of the property investment and creating value for shareholders, while reallocating capital to other investment opportunities.

Prior to this, on September 17, 2021, Hysan Societe Generale announced that the company, through the buyer (i.e. the company's indirect wholly-owned subsidiary Hysan (Shanghai)), had agreed to acquire the entire equity interest in Scorecity Investments Limited from the seller (both of which are indirect wholly-owned subsidiaries of CK Asset) for an acquisition consideration of approximately 3.5 billion yuan.

Hysan Societe Generale announcement revealed that the acquisition project is located in Shanghai Century Shenghui Square. CK Asset, owned by Li Ka-shing, is the controlling shareholder of the project and may cash out 2.1 billion yuan after the sale is completed.

A series of selling actions have also sparked market discussion about Li Ka-shing's divestment. Li Ka-shing's eldest son, CK Asset Chairman Victor Li, previously responded to the question of whether the sale of mainland real estate projects is a divestment: "property sales are not divestment, but the daily business of real estate companies." "

Li Ka-shing once said: "it is normal to buy and sell in business. These are all decisions made out of market and economic conditions." "

Be optimistic about the mainland market

"from the perspective of the industry, there has been a marked increase in the acquisition of land by Hong Kong-funded enterprises in the mainland. Yan Yuejin said.

Henderson Land Development disclosed that by the end of 2021, the company had land reserves in 20 cities, with a total floor area of about 35.7 million square feet, apart from having inventory of about 1.2 million square feet of its own floor area in the mainland. The Group will continue to identify quality investment property portfolios in the core areas of major cities.

Victor Li has said that Hong Kong and the mainland are the key markets of the Group's real estate business and will continue to identify suitable property development opportunities and have full confidence in the future.

As for the development of the real estate market, the recent meeting of the political Bureau of the CPC Central Committee said that it is necessary to adhere to the positioning that houses are used for living, not for speculation, and support various localities to improve real estate policies based on local reality. We will support rigid and improved housing demand, optimize the supervision of funds for the pre-sale of commercial housing, and promote the stable and healthy development of the real estate market.

Recently, relevant support policies have been issued in many places, involving provident fund withdrawal rules and proportion, down payment ratio, housing purchase subsidy, supervision of commercial housing pre-sale funds, and so on.

Industry insiders believe that as far as the local market is concerned, under the background of low market prices and favorable policies, the capital advantages of Hong Kong-funded enterprises have been highlighted.