Sun Hung Kai wins auction for $3.6 bln Shanghai commercial site
HONG KONG, Sept 5
HONG KONG, Sept 5 (Reuters) - Hong Kong's largest developer, Sun Hung Kai Properties, on Thursday won an auction for a commercial district site in Shanghai worth 21.77 billion yuan ($3.6 billion).
Hong Kong developers are increasing investments in mainland China to offset thinning margins at home as a series of government tightening measures take a toll.
Sun Hung Kai Properties outbid Hong Kong developer The Wharf Holdings to build offices, restaurants and a hotel in Shanghai's Xujiahui district, a popular shopping and entertainment hub in China's financial centre about 30 minutes by car from downtown Shanghai.
The bid was 24 percent higher than the reserve price of 17.5 billion yuan, according to Shanghai's New Area Planning and Land Authority.
Sun Hung Kai warned earlier this year about the impact of tighter measures on Hong Kong's property market and lowered its sales target for this financial year by 9 percent.
"Major Hong Kong developers are increasing their investments in China to diversify their portfolio," said Thomas Lam, head of research for Greater China at Knight Frank. "The pressure for competition in the Hong Kong market is getting higher and higher."
Shares in Sun Hung Kai rose 1.1 percent at 0249 GMT, outperforming a 0.9 percent rise in the benchmark Hang Seng Index.
($1 = 6.1201 Chinese yuan) (Reporting by Yimou Lee. Additional reporting by David Lin in Shanghai; Editing by Edwina Gibbs)
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