- Over 89,000 Hongkongers and HKD 6.57 billion (USD 844 million) have left the city against the backdrop of political malaise in recent times.
- Hong Kong tycoon developers, while openly supporting the new National Security Law allowing Beijing to police life in Hong Kong, have also been developing residential properties in the UK to house fleeing Hongkongers.
- CK Asset Holdings and Far East Consortium International are the two standout HKEX-listed companies that will profit from the exodus.
The phone has been ringing non-stop for Eric Yip, a director at Link-UK Property Consultancy in Hong Kong, since the National Security Law (NSL) kicked in on 30 June 2020.
Droves of Hong Kong residents are eyeing UK properties to escape what critics call a draconian law that allows Beijing to police life in Hong Kong and curtail freedom of speech, or any opposition, really.
With its affinity with Hong Kong (a former British colony), the UK government introduced a new visa scheme in January 2021 for fleeing Hongkongers with British national overseas (BNO) passports to live and work there, and eventually obtain citizenship.
Prior to NSL, buyers were predominantly looking at UK properties for investment purposes. Now the majority are families, eager to reside in cities such as Manchester, which feature good schools, Yip told Bread News.
Likewise, following the BNO visa scheme, Senior Director of International Residential Sales in Knight Frank Sherry Tsang has seen slightly more owner-occupier clients – either young families with children or older retirees – looking at various locations in the UK.
“There is still a good portion of buy-to-let buyers in the market for Central London,” Tsang added.
For every unit available, 4-5 buyers are vying for it, Yip said.
And there’s no guarantee of closing a deal even if you offer to pay more than the asking price due to “hot” demand.
“A client, who purchased two houses in the UK, told me he was in disbelief that it was so hard to buy a house even with deep pockets,” he recalled.
And some Hong Kong tycoons are laughing all the way to the bank.
Even as the tycoons behind the likes of CK Asset Holdings, Far East Consortium International, New World Development and Sun Hung Kai Properties toe the (Chinese Communist Party) line and openly support the NSL in Hong Kong, they’ve been busy developing properties in the UK.
David Chiu Tat Cheong, the Chairman and Chief Executive Officer of Far East Consortium (FEC), had told Wen Wei Po following the implementation of NSL that “Hong Kong will definitely be more stable, and stability will definitely bring prosperity.”
He also told the Hong Kong Economic Journal that the UK property will be a hit with the BNO visa scheme, and FEC will be a beneficiary of the mass migration.
Granted, the property developers had entered the UK even before the recent political malaise in Hong Kong. But there’s no time like the present to capitalize on the exodus.
Latest data by Hong Kong’s Census and Statistics Department showed a total of 89,200 Hongkongers had left between mid-2020 and mid-2021, which led to 1.2% decline in the city’s population. This was 4x higher than the previous year.
Around HKD 6.57 billion was permanently withdrawn from the Mandatory Provident Fund System (MPF), a scheme to help working Hong Kong residents save up for their retirement, between April 2020 to March 2021, according to official data.
Usually, Hong Kong residents can only withdraw their MPF when they reach 65. Or other reasons for withdrawal include leaving the city for good.
In an extreme scenario, the UK government estimated that 500,000 Hongkongers will use the new visa scheme in the first year, with over 1 million moving over five years.
The Cheng Yu Teng family, one of Hong Kong’s richest family behind HKEX-listed property giant New World Development, and the Kwok family, another of the city’s richest behind HKEX-listed property titan Sun Hung Kai Properties, both own developments in the UK via privately held family vehicles.
Here are two HKEX-listed companies that will directly profit from the exodus.
CK Asset Holdings
The conglomerate founded by OG Li Ka-shing, has been snapping up investments in the UK. Via subsidiary Hutchison Property Group, it currently has three real estate projects there.
The most famous and richest tycoon from Hong Kong continues to embrace fengshui by having the properties near water, which symbolizes abundance and wealth.
Its largest project in the UK is Convoys Wharf, which sits on 1,742,400 square feet of land along the River Thames in London. The history of the site is similar to Hutchison’s Whampoa Garden, a private housing estate built in Hong Kong, with both dockyards converted into large-scale residential estates.
Still in the planning stage, with completion in stages from 2022 to 2025, Convoys Wharf will house 3,500 new homes in Lewisham and London and other facilities including retail stores, offices, restaurants, schools, clinics and hotels.
Chelsea Waterfront is another project situated on the north bank of the Thames. The construction of four residential and commercial developments on the 237,979 square feet site has started, with completion expected by 2024.
According to CK Asset’s 2020 annual report, the revenue from overseas property sales including Chelsea Waterfront was HKD 2.62 billion.
The third project is two residential properties on a 737,327 square feet site on Teversham Road, in Fulbourn, Cambridgeshire, expected to be completed by 2023.
Far East Consortium International (FEC)
The mid-sized developer, founded and owned by the Chiu family, is ahead of the game in the UK.
Li Ka-shing’s Convoys Wharf project was once nicknamed as ‘Hong Kong Town’ by Hong Kong netizens. However, the real ‘Hong Kong Town’ might be FEC’s ambitious development in Manchester.
In 2017, Manchester City Council (MCC) appointed FEC as its JV partner to develop a massive regeneration project called Northern Gateway, renamed Victoria North. The project occupies 17 million square feet and spans across several neighbourhoods including Collyhurst, the Lower Irk Valley and New Cross.
Victoria North is expected to deliver over 15,000 new homes in the next decade, according to FEC’s 2021 annual report.
FEC’s other projects in Manchester include four-tower residential development MeadowSide to be completed by FY2022 and the 80 resident unit New Cross Central to be completed in FY 2023.
It also shares a piece of pie in London with two mixed-use projects under development – Aspen at Consort Place, Canary Wharf and Hornsey Town Hall in North London.
Another two projects in London are in the planning and due diligence stages.
FEC had recorded HKD 2.65 billion in pre-sales from its UK projects for the year ending March 2021. It expects the attributable Gross Development Value (GDV) from its UK projects to be HKD 23.83 billion.