Tang Shing-bor, considered “king” of Hong Kong retail shops as chairman at ETS Group, and his son Stan Tang have established two funds targeting retail shops and shopping malls in residential areas.

Tang senior has built up a HK$10 billion (US$1.2 billion) investment portfolio this year alone, while Tang junior is chief executive of 11 companies, including Tang’s Living Group.

Commercial properties such as retail shops and malls currently offer strong capital gains with an internal rate of return of 30 per cent, excluding leverage, says Tang junior.

He and his father have established the fund, worth $3 billion and $2 billion, from local institutional investors he says may have “other sources of capital behind them”.

“We have approached the investors and started the necessary legal processes. We have already bought most of the assets we will need,” he says.

“We are like asset managers, trying to create good returns to investors by buying and selling using their funds.

“We target value-added investments such as retail shops. We aim to offer returns of between 5 and 15 per cent in regular interest payments, or one-off capital gains,” he says.

“But the funds are likely to offer institutional investors with higher flexibility, since our company is not listed.”