Hong Kong’s family dynasties might not be able to maintain their control over the city’s wealth indefinitely.
The region’s “Big Four” property empires are all handing off a total of $109 billion worth of real estate to the next generation, who do not have the same close ties to Beijing that its predecessors did with the Hong Kong government and banks, according to a Bloomberg opinion column from Nisha Gopalan. And with Beijing’s presence in the autonomous territory ever growing, that might signal the beginning of the end.
Members of Hong Kong’s business community are also nervous about a proposed extradition law that would move the city’s fugitives to China, where the Communist Party controls the courts. The head of Hong Kong’s liberal party decried the proposal, saying it could hurt foreign investment. The city’s developers, on the other hand, have remained silent.
The biggest threat to the dynasties, though, comes from mainland China developers, who have done $12 billion worth of Hong Kong land deals over the past three years.
The heirs at Hong Kong’s big property firms are still very wealthy, and the expensive prices for real estate in Hong Kong are helping them stay that way. But they may not stay so dominant forever.
“At the end of 1997, Chinese firms comprised just 16 percent of the market value of Hong Kong’s stock exchange; now they account for around 68 percent,” Gopalan wrote. “It’s just a matter of time before the city’s real estate goes the same way.” [Bloomberg] – Eddie Small