The land shortage exceeded the government estimate of 1,200 hectares.

Bloomberg reports that Hong Kong developers are pushing into the Mainland as the city’s chronic land shortage is preventing further expansion of land bank inventory.

The pivot was seen when Hang Lung Properties paid $13.11b (10.7b yuan) for a prime lot in southern Hangzhou which represents more than double the asking price after a seven-hour competition.

Even across China, the unit cost of 55,285 yuan per square meter ($800 per square foot) is “unprecedented” for a commercial land parcel, said Yang Kewei, research director at China Real Estate Information Corp.

“There is not much room for further expansion in commercial real estate in Hong Kong,” said Harris Tong, Hangzhou-based general manager at Cushman & Wakefield. “So a pivot to China is a natural strategic move for some.” 

Also read: Property sales up 36.3% to $77.8b in April

Land shortage in space-starved Hong Kong has exceeded government estimate of 1,200 hectares with a government task force identifying 18 land supply options to unlock more land for housing and commerical property supply. 

Here’s more from Bloomberg: