Kerry Properties Pays $2.1 Billion For China Land Rights As Healthy Developers Keep Buying

The Bund Bull statue in Shanghai yesterday. A wall of maturing debt and a surge in seasonal demand … [+] for cash will test China’s financial markets this month. Photographer: Qilai Shen/Bloomberg

© 2022 Bloomberg Finance LP

Huge debts and plunging shares at big China property industry developers such as China Evergrande Group have captured headlines around the world in recent months.  Just yesterday, Evergrande suffered another setback when it said it was ordered to demolish 39 buildings in Hainan, the island known as the “Hawaii of China.” 

It’s not only in China that industry woes are being felt. Struggling Beijing-headquartered China Oceanwide Holdings last month said it reached an agreement to sell off $23 million of property in (the real) Hawaii.

Yet healthier real estate developers are continuing to make big bets on China, based on hopes for long-term growth.  A new case in point: Kerry Properties, controlled by Malaysian billionaire Robert Kuok, said on Tuesday it had won a land rights bid for a swath of property in a top Shanghai district for 13.3 billion yuan, or $2.1 billion. 

No surprise: Kuok, 98, is a long-time savvy China and Asia investor. His successes include the internationally renowned Shangri-La Hotel chain. Kuok is worth $11 billion on the Forbes Real-Time Billionaires List today and currently Malaysia’s richest man.

Kerry’s Shanghai purchase comes after Shui On Land, led by 72-year-old Hong Kong billionaire Vincent Lo, said last month it had won a 17 billion yuan ($2.6 billion), 50-50 land rights bid with state-owned Wuhan Real Estate in the central Chinese transportation and education hub of Wuhan. The city was the epicenter of the Covid-19 pandemic in early 2020.   Shui On is the developer behind Shanghai’s iconic Xintiandi district.

U.S. billionaire Stephen Schwarzman chairs Blackstone Group. The company\’s efforts to acquire China … [+] real estate developer Soho China fell through last year. Photographer: Jason Alden/Bloomberg

© 2018 Bloomberg Finance LP

Earlier last year, U.S. investment powerhouse Blackstone offered to buy Beijing-headquartered developer Soho China in a transaction worth $3 billion. A filing in September cited “a lack of progress,” ending the discussion and leading to a plunge in Soho China’s Hong Kong-traded shares. Blackstone is led by American billionaire Stephen Schwarzman; in other recent China investments, Blackstone in November 2020 bought a 70% stake in an urban logistics park in the southern Chinese city of Guangzhou for $1.1 billion from financially stretched R&F Group, expanding Blackstone’s China logistics portfolio by approximately one-third.

Kerry Properties shares were down 0.24% to HK$20.60 this morning at the Hong Kong Stock Exchange.

See related posts:

Hong Kong Billionaire Joins Winning $2.6 Billion Land Rights Bid In One-Time China Covid Epicenter

Soho China Plunges On Uncertain Future After Blackstone Acquisition Evaporates