(Bloomberg) -- Hong Kong’s property developers and banks pledged to support a billion-dollar mega project in the city after a senior Chinese official urged the community to contribute and demonstrate patriotism.
Hong Kong’s biggest property companies including Li Ka-shing’s CK Asset Holdings Ltd. and Sun Hung Kai Properties Ltd. joined HSBC Holdings Plc and dozens of Chinese companies to sign a memorandum demonstrating their interest on Friday.
The Northern Metropolis, initiated by former Chief Executive Carrie Lam in 2021, seeks to transform the sprawling, relatively under-developed New Territories into a technology hub. The government is trying to leverage the project to provide new housing and job opportunities.
With an estimated cost of HK$220 billion ($28.3 billion), it requires significant investment from the government and the private sector. Zheng Yanxiong, the director of the Hong Kong Liaison Office, delivered a speech in Mandarin at the ceremony on Friday to jumpstart the project.
This week, Hong Kong’s business leaders traveled to Guangdong province to learn about industrial planning, according to the Hong Kong government. Some of the city’s most influential tycoons joined the trip, including casino magnate Pansy Ho, Peter Lee of Henderson Land Development Co., Adam Kwok from Sun Hung Kai Properties. and Chow Tai Fook Jewellery Group Ltd.’s Sonia Cheng.
Property developers in Hong Kong have been cautious about bidding for land due to the real estate sector’s downturn. The city has seen eight failed tenders since 2023, with last year recording the most aborted sales, a setback for government income.
Hong Kong’s property market continues to struggle as a result of oversupply and high interest rates. After declining more than 6% this year, home prices are now close to the lowest level in eight years. While Bloomberg Intelligence analysts expect values to recover by as much as 10% in 2025, they will still be far below the peak of a few years ago, weakening the allure for companies to kick off new projects while holding a significant amount of inventory.
It’s under this environment that Xia Baolong, the director of the Hong Kong and Macau Affairs Office, urged the commercial sector to support the Northern Metropolis when he met with Hong Kong’s business leaders in November. The project is important for the long-term development of Hong Kong, Xia said, pro-Beijing newspaper Ta Kung Pao reported.
“The development of the Northern Metropolis will be government-led, but market participation is just as vital,” John Lee, the city’s chief executive, said at the ceremony.
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