BIZCHINA / Weekly Roundup |
Report says real estate market in good healthBy Cao Qian (Shanghai Daily)Updated: 2007-04-03 13:59 Direct real estate investment in China jumped 70 percent to US$9.91 billion last year from a year earlier as foreign investors, betting on a strong economic growth for China in the long-term, continued to be optimistic with the country's real estate market, Jones Lang LaSalle, a leading global property adviser, said in its newly released Global Capital Flow report.
For instance, Morgan Stanley and Citigroup have acquired more residential properties in Shanghai. And the Carlyle Group, one of the world's largest private equity firms, was also reported to have made its first investment in China's real estate market by acquiring 110 villas in Minhang District in Shanghai. Moreover, a major Korean fund purchased Hopson International Tower in Lujiazui in Pudong. In July, the central government introduced Circular No. 171 - also known as "Opinions on regulating the administration and entry of foreign investment to the real estate sector" - which has made foreign investment in the country more restrictive. Industry people agreed that those measures have had some impact on the real estate market in terms of strengthening market controls and promoting healthy and sustainable development. A number of investors, especially those expanding their investment into later
phases of projects, have had to rework investment structures in the second half
of last year. And others have had to structure multiple contracts to separate
elements of mixed-use projects to allow flexibility for changes in ownership
structure While major cities like Beijing, Shanghai and Guangzhou remained the focus for foreign investors, second-tier cities such as Chengdu, Wuhan and Tianjin have also been put on the investors' radar screen. The yield compression in major cities as well as the lack of opportunities
are diverting some institutional investors' attention to second-tier cities,
where a substantial increase in investments made by foreign investors was
recorded in the second half of last year.
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