Chinese telecommunications giant China Mobile has managed to outbid major Hong Kong property developers for a parcel of industrial land in the city. Its winning bid has been seen by some as a likely precursor to the possible return of major mainland property buyers to Hong Kong.

According to tender results published by the city's Land Department on Wednesday, China Mobile agreed to pay HK$5.6 billion, or roughly US$722.6 million, for a piece of industrial land in Sha Tin, New Territories with an area of about 98,792-square feet, or 9,178 square meters. The purchase was for a 50-year lease for the land instead of an outright purchase.

Hong Kong-based surveyor CHFT Advisory and Appraisal noted that the price was the highest offered in the city's industrial property market since 1998. The price that China Mobile was willing to pay, which equates to about HK$5,967 per square foot, was significantly higher than the HK$3,617 that was paid for an adjacent piece of land back in 2018. The HK$5.6 billion price tag was also higher than the HK$2.35 billion to HK$3.75 billion price range initially expected by brokers and property analysts.

Knight Frank property consultancy stated that the high price paid by China Mobile underscores the growing demand for industrial land in Hong Kong among both local and mainland developers and companies. The company speculated that China Mobile could be using the land to build a high-end data center or a massive logistics facility.

China Mobile, through its subsidiary CMCC Infrastructure Holdings, managed to outbid eight other major competitors for the piece of land. This included major players such as CK Asset Holdings, Chinese Estate Holdings, Sun Hung Kai Properties, and Singapore's Mapletree Investments Pte.

Prior to the escalation of tensions between China and the United States, mainland corporations and tycoons had helped to drive up prices for industrial properties in Hong Kong. Demand for these types of properties drove prices upwards to record highs. The trade war between two of the world's largest economies, the months of civil unrest, and the coronavirus pandemic, unfortunately, stifled the continued price growth.

With China Mobile's purchase, property analysts are expecting a resurgence of demand for industrial prices in the city. Knight Frank noted that the city would likely have to increase its supply of industrial land if it wants to meet the demand. Otherwise, prices will likely increase further in the coming years. Colliers International is forecasting a possible shortage of industrial land in Hong Kong as the demand for more data centers and high-tech development is expected to rapidly grow.