The consequences of Chinese outward real estate investment: Evidence from Hong Kong land market

Xin Li; Eddie C.M. Hui; Jianfu Shen

doi:10.1016/j.habitatint.2020.102151

The consequences of Chinese outward real estate investment: Evidence from Hong Kong land market

Xin Li, Eddie C.M. Hui, Jianfu Shen

Research output: Journal article publication › Journal article › Academic research › peer-review

13 Citations (Scopus)

Abstract

This paper explores the Chinese outward real estate investment in Hong Kong's land market from 2011 to 2019. The property developers from Mainland China are attracted to Hong Kong market and win a significant portion of land parcels in government land auctions since 2011. The results reveal that these developers pay much higher land premium to acquire land than local developers. The expected gain from the land development, measured by the stock market reaction to land acquisition, is significantly positive for Chinese developers and much larger than the gain for local developers. Taken together, our findings indicate that outward real estate investment helps Chinese property developers seek new markets and improves the profitability and financial performance; meanwhile, the Chinese outward investment also pushes up the real estate price in the host market.

Original language	English
Article number	102151
Journal	Habitat International
Volume	98
DOIs	https://doi.org/10.1016/j.habitatint.2020.102151
Publication status	Published - Apr 2020

Keywords

Chinese outward real estate investment
Cumulative abnormal return
Economic profit
Hong Kong
Land acquisition
Land price

ASJC Scopus subject areas

Urban Studies

More information

10.1016/j.habitatint.2020.102151

http://hdl.handle.net/10397/81981

Cite this

@article{91bb1747700840de9d8f82659f495de6,

title = "The consequences of Chinese outward real estate investment: Evidence from Hong Kong land market",

abstract = "This paper explores the Chinese outward real estate investment in Hong Kong's land market from 2011 to 2019. The property developers from Mainland China are attracted to Hong Kong market and win a significant portion of land parcels in government land auctions since 2011. The results reveal that these developers pay much higher land premium to acquire land than local developers. The expected gain from the land development, measured by the stock market reaction to land acquisition, is significantly positive for Chinese developers and much larger than the gain for local developers. Taken together, our findings indicate that outward real estate investment helps Chinese property developers seek new markets and improves the profitability and financial performance; meanwhile, the Chinese outward investment also pushes up the real estate price in the host market.",

keywords = "Chinese outward real estate investment, Cumulative abnormal return, Economic profit, Hong Kong, Land acquisition, Land price",

author = "Xin Li and Hui, {Eddie C.M.} and Jianfu Shen",

year = "2020",

month = apr,

doi = "10.1016/j.habitatint.2020.102151",

language = "English",

volume = "98",

journal = "Habitat International",

issn = "0197-3975",

publisher = "Elsevier Ltd",

}

TY - JOUR

T1 - The consequences of Chinese outward real estate investment

T2 - Evidence from Hong Kong land market

AU - Li, Xin

AU - Hui, Eddie C.M.

AU - Shen, Jianfu

PY - 2020/4

Y1 - 2020/4

N2 - This paper explores the Chinese outward real estate investment in Hong Kong's land market from 2011 to 2019. The property developers from Mainland China are attracted to Hong Kong market and win a significant portion of land parcels in government land auctions since 2011. The results reveal that these developers pay much higher land premium to acquire land than local developers. The expected gain from the land development, measured by the stock market reaction to land acquisition, is significantly positive for Chinese developers and much larger than the gain for local developers. Taken together, our findings indicate that outward real estate investment helps Chinese property developers seek new markets and improves the profitability and financial performance; meanwhile, the Chinese outward investment also pushes up the real estate price in the host market.

AB - This paper explores the Chinese outward real estate investment in Hong Kong's land market from 2011 to 2019. The property developers from Mainland China are attracted to Hong Kong market and win a significant portion of land parcels in government land auctions since 2011. The results reveal that these developers pay much higher land premium to acquire land than local developers. The expected gain from the land development, measured by the stock market reaction to land acquisition, is significantly positive for Chinese developers and much larger than the gain for local developers. Taken together, our findings indicate that outward real estate investment helps Chinese property developers seek new markets and improves the profitability and financial performance; meanwhile, the Chinese outward investment also pushes up the real estate price in the host market.

KW - Chinese outward real estate investment

KW - Cumulative abnormal return

KW - Economic profit

KW - Hong Kong

KW - Land acquisition

KW - Land price

UR - http://www.scopus.com/inward/record.url?scp=85080991951&partnerID=8YFLogxK

U2 - 10.1016/j.habitatint.2020.102151

DO - 10.1016/j.habitatint.2020.102151

M3 - Journal article

AN - SCOPUS:85080991951

SN - 0197-3975

VL - 98

JO - Habitat International

JF - Habitat International

M1 - 102151

ER -

The consequences of Chinese outward real estate investment: Evidence from Hong Kong land market

Abstract

Keywords

ASJC Scopus subject areas

More information

Other files and links

Fingerprint

Cite this