"The long-term value of these assets is tied to Hong Kong and the integration of Hong Kong into China," said Gilles Hilary, professor at Georgetown University's McDonough School of Business, referring to the city's developers as a group."Growth in the future will not be as high as in the past."
Sun Hung Kai's push to increase ties with the mainland is understandable given the challenges in Hong Kong, but it's far from a surefire strategy, said Jackson Wong, asset-management director at Amber Hill Capital in Hong Kong. The city's developers have long struggled to generate outsized returns in China, in part because they lack the, or personal relationships, that often underpin business success on the mainland, Mr Wong said.
With trophy assets, plenty of cash and more than 129 million square feet of land between Hong Kong and mainland China — an area about one-fifth the size of Manhattan — the Kwoks can weather a property-market slump, said Joseph Fan, a finance professor at Chinese University of Hong Kong."The family and the group are financially sound, enabling them to endure a long and cold winter," he said."Having deep pockets helps.
Even if some of those headwinds fade, the longer-term risk for the Kwoks is that China's increasingly assertive role in Hong Kong erodes the city's appeal as a financial and commercial hub. The Kwoks will have to cope with all of this while navigating some unusually complex succession issues.
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