When asked about the three top factors for property buyers, an estate agent will say “location, location, location” and for investors in Hong Kong as well as the broader Guangdong-Hong Kong-Macao Greater Bay Area “location” is a broad term.
Properties anywhere from Japan to the United Kingdom draw their interest, but investors seeking geographic diversity have to negotiate a wide range of legal, regulatory and financial systems as well as diverse cultures.
During the pandemic, these obstacles became formidable. Lenders abruptly tightened credit to overseas buyers, creating demand among Hong Kong investors for alternative mortgages.
The founders of fintech start-up PropCap Technologies decided to step into the breach in 2020.
“Seizing the opportunity presented by Hong Kong’s status as an international capital centre, we positioned ourselves to play a crucial role in connecting borrowers with the necessary funding,” said Christine Kwan, Assistant Marketing Manager at PropCap.
The pandemic accelerated digitalisation, she added, letting the firm achieve a loan drawdowns four times more quickly than the traditional banking process.
“This transformative journey has not only facilitated the efficient matching of borrowers with capital, but has also contributed to reshaping the lending industry, adapting it to the demands of the new digital landscape.”
The recent jump in credit costs across the world had led overseas buyers to seek more flexible mortgage plans and PropCap’s agile model let the firm offer a range of options, Ms Kwan said. Mortgage funders also sought higher returns, which PropCap was able to offer.
Low taxes, easy regulation and seamless fund flows made Hong Kong a natural hub for family offices, creating many opportunities to engage with investors.
“Furthermore, Hong Kong’s emergence as a centre for green financing and sustainability aligns with our commitment to sustainable development. The government's climate strategies accelerate the growth of green and sustainable finance, positioning Hong Kong as a leading player in this space.” Ms Kwan said.
The Hong Kong Trade Development Council’s (HKTDC) Transformation Sandbox (T-box) programme for SMEs and start-ups helped PropCap boost its green credentials, especially through the Dun & Bradstreet workshop and evaluation programme.
PropCap attended the workshop in June last year, and after D&B’s evaluation, the company received a special offer for the D&B ESG RegisteredTM service , successfully obtaining the badge in September.
To further enhance their knowledge, PropCap also joined an ESG capacity-building workshop organised by T-box in July, and released its first ESG report, demonstrating commitment to and implementation of ESG best practices.
Hong Kong’s status as a digital data hub enabled secure and efficient data transfers, particularly between Mainland China and Hong Kong. PropCap in partnership with Nova Credit became a member of the Greater Bay Area Cross-boundary Data Mutual Recognition Platform, significantly facilitating operations, particularly in verifying and accessing mainland customer backgrounds.
The HKTDC’s GoGBA initiative fostered connections and collaborations for PropCap, particularly in navigating the GBA landscape.
“Moreover, participation in workshops organised by GoGBA have been invaluable in keeping us updated on the evolving data protection framework and regulations. These workshops have also provided us with deeper insights into the potential monetisation of cross-boundary data within specific applications, further enhancing our strategic approach in leveraging GBA links.”
T-box was also invaluable for PropCap, introducing the firm to opportunities in two global property powerhouses, London and Singapore.
“Besides Singapore and the United Kingdom, T-box has played a crucial role in our expansion plans into the Australian market. It has facilitated connections with Bonnie Shek, Director of HKTDC’s Australia and New Zealand office. The platform has been instrumental in broadening our market reach and establishing connections for our growth strategy.”
In addition to the T-box and GoGBA services, PropCap pitched to potential investors and partners at the HKTDC’s recent Asian Financial Forum.
