HONG KONG (Reuters) – Mainland Chinese investors are scouring Hong Kong’s commercial property market for bargains after prices plunged 30%, signalling a new wave of demand following anti-government protests last year that kept a lid on investment activity.
FILE PHOTO: Residential flats are seen in Tung Chung on Hong Kong’s Lantau Island, China September 6, 2019. REUTERS/Amr Abdallah Dalsh/File Photo
Property agents expect the influx of Chinese capital, which has helped Hong Kong become one of the world’s most expensive property markets, can once again prop up the sector as China recovers from the COVID-19 pandemic and stands ready to deploy liquidity.
In August alone, mainland buyers snapped up at least two office towers and one hotel building worth HK$4 billion ($516 million) in total, according to agents and filings.
“A majority of recent large-value building deals were bought by Chinese investors; their number has really grown in the third quarter,” said Reeves Yan, head of capital markets at CBRE Hong Kong.
“They’re looking for bargains … and they’re confident in Hong Kong in the long term.”
The pick-up in demand coincides with the imposition of a national security law in Hong Kong on June 30, which authorities in Beijing and the financial centre have said is necessary to ensure its stability and prosperity.
“We expect to see more mainland investors coming to buy land,” said Dennis Cheng, senior sales director at Ricacorp (C.I.R.) Properties.
“If Hong Kong gets more stable in the next few months after the national security law, we expect more mainland companies to open branches here, and that will help the office sector to recover.”
The move by Chinese investors is in stark contrast to foreign investors, who are staying away due to growing concerns over the city’s future. Critics of the legislation say it has pushed the former British colony onto a more authoritarian path following months of sometimes violent democracy protests last year.
“Foreign investors are still absent. I spoke to two foreign funds recently who said they won’t consider Hong Kong at the moment because the political risks are relatively high now,” said Daniel Wong, CEO of Midland IC&I.
EARLY SIGNS
In July, state-owned China Mobile and a consortium led by Chinese major developer Vanke bought one land parcel each for HK$5.6 billion and HK$3.7 billion, respectively. They were the first mainland Chinese companies to win public tenders since January.
Colliers says it expected mainland capital will become “the next wave of demand” in the Hong Kong leasing and investment markets, supported by cross-border financial initiatives in stock and wealth management, and the city’s large capital pool for fund-raising.
China called on its biggest state firms to take a more active role in Hong Kong, including stepping up investment and asserting more control of companies to help cool last year’s political crisis, Reuters reported (here) last year.
It is unclear, however, whether the latest spike in investment is being driven by Beijing, because while some of the buyers are government-backed, many of them are private investors.
But the city recorded a plunge in deal volume amid the unrest and the pandemic and has yet to witness a rise in mainland investments comparable to a few years ago.
“There are early signs of mainland Chinese demand returning,” Colliers said in a recent note.
Chinese investment accounted of 39% of total commercial real estate transactions in Hong Kong so far this year, up from 19% for the whole of 2019, Colliers said.
CBRE’s Yan expects the commercial property market to bottom-out soon as deal volumes accelerate in the fourth quarter. He cautioned, however, that prices of office and retail shops will remain under pressure for another 12-18 months as the economy slowly recovers.
Reporting by Clare Jim; Editing by Anne Marie Roantree and Lincoln Feast.
TORONTO – Canada Goose Holdings Inc. says it has signed a deal that will result in the creation of its first eyewear collection.
The deal announced on Thursday by the Toronto-based luxury apparel company comes in the form of an exclusive, long-term global licensing agreement with Marchon Eyewear Inc.
The terms and value of the agreement were not disclosed, but Marchon produces eyewear for brands including Lacoste, Nike, Calvin Klein, Ferragamo, Longchamp and Zeiss.
Marchon plans to roll out both sunglasses and optical wear under the Canada Goose name next spring, starting in North America.
Canada Goose says the eyewear will be sold through optical retailers, department stores, Canada Goose shops and its website.
Canada Goose CEO Dani Reiss told The Canadian Press in August that he envisioned his company eventually expanding into eyewear and luggage.
This report by The Canadian Press was first published Sept. 19, 2024.
Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.
Here’s a timeline of key events in the bread price-fixing case.
Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.
Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.
Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.
Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).
Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.
June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.
Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”
Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.
July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.
Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)
TORONTO – TD Bank Group, which is mired in a money laundering scandal in the U.S., says chief executive Bharat Masrani will retire next year.
Masrani, who will retire officially on April 10, 2025, says the bank’s, “anti-money laundering challenges,” took place on his watch and he takes full responsibility.
The bank named Raymond Chun, TD’s group head, Canadian personal banking, as his successor.
As part of a transition plan, Chun will become chief operating officer on Nov. 1 before taking over the top job when Masrani steps down at the bank’s annual meeting next year.
TD also announced that Riaz Ahmed, group head, wholesale banking and president and CEO of TD Securities, will retire at the end of January 2025.
TD has taken billions in charges related to ongoing U.S. investigations into the failure of its anti-money laundering program.
This report by The Canadian Press was first published Sept. 19, 2024.
