China's biggest developers are borrowing record amounts in Hong Kong, taking advantage of lower interest rates to circumvent a lending crackdown at home.

While banks demand at least 5.2% in annual interest for three- to five-year money on the mainland, the cost of credit in Hong Kong dollars has fallen to the lowest since November 2004.

China Overseas Land & Investment agreed to an HK$8bn loan in February that pays 1.45% at current market levels, Bloomberg data shows.

"For property developers to keep growing in what is an extremely fragmented and competitive market, they have to go offshore" for funds, said Brayan Lai, a credit analyst at Credit Agricole CIB in Hong Kong. "It's one way to circumvent tight onshore credit."

South China Morning Post