By Li Hongmei
At a time when Hong Kong billionaire Li Ka-shing is rumored to be making plans to exit Hong Kong and the mainland, several other Hong Kong tycoons have increased their investments in the mainland. However, Li, who has been rapidly acquiring European firms over the past few years, may have a better chance of success expanding overseas, reports the Shanghai-based National Business Daily.
Last week, Sun Hung Kai Properties won an auction for a commercial plot of land in Xujiahui district in Shanghai for 21.8 billion yuan (US$3.6 billion), the largest land transaction in China so far this year. Wharf (Holdings) Limited has also increases its holdings in several mainland properties, while Henderson Land Development chairman Lee Shau Kee continues to increase stock holdings in several Chinese companies.
However, Li sold a Guangzhou shopping mall for HK$3 billion (US$387 million) on Aug. 29, and the tychoon also plans to sell his ParknShop supermarket chain in Hong Kong. With the sale of the supermarket chain, the Oriental Financial Center in Shanghai, and the commercial building in Guangzhou, companies under the auspices of Li Ka-shing are estimated to generate 30 billion yuan (US$4.9 billion).
Li is currently the eighth richest person in the world, according to Forbes, with an estimated wealth of US$31 billion. His move to sell off assets in China and Hong Kong has been interpreted as a sign that China's realty market has entered a high-risk zone. But Sun Hung Kai Properties winning bid on Sept. 5 indicates that the firm is bullish of the mainland property market.
Looking back at Li Ka-shing's career, he has been able to expand during economic slowdowns by expanding his portfolio overseas. According to the Forbes rich list in 1996, Li ranked third in Hong Kong with US$10.6 billion, but after the Asian financial crisis in 1997, he became the No.1 in 1999, and has stayed at the top for 15 consecutive years.
Based on Li's choices, and the fact that the Chinese mainland and Hong Kong property prices have reached the ceiling, instead, European properties are at low levels, some analysts think that Li should profit from his move.