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BIZCHINA / Center

Property zeal tipped to stay

By Wang Lan (China Daily)
Updated: 2007-08-22 14:32

Models of apartment block developments at an exhibition in
Shanghai.[newsphoto]?

The impact of the US credit crisis on foreign investment in China's
property market has yet to play out. But international investors say they
aren't considering any change to their long-term investment strategies.

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Property analysts said they are watching the unfolding US liquidity drama
closely, but they don't expect it will have any significant effect on the
flow of foreign funds into China's property market.

"International property funds won't leave China's property market because
of the potential return, which continues to exceed that of most other
world markets," said Zhang Luan, a property analyst at Haitong
Securities. "China's housing needs, driven by its increasing population
and urbanization, will further push up property prices, especially in the
major cities," said Zhang.

A senior executive at CapitaLand, one of Asia's largest listed property
companies based in Singapore, yesterday told China Daily her company does
not see any need to adjust investment strategy in China. "We take a
long-term view on investment in China and we're looking to steady
development by investing over the longer term," she said.

Jones Lang LaSalle, one of the world's leading real estate services and
money management firms, said that none of its clients - mainly
international investment funds and high net-worth investors - have
indicated an intention to withdraw from the Chinese market as a result of
tighter liquidity in the global financial markets.

"So far, we haven't seen withdrawal of any foreign property funds from
China's market," said Kenny Ho, head of research at Jones Lang LaSalle in
Shanghai.

Property analysts said that the relatively less open property market in
China has shielded it from full exposure to the credit risks caused by
the US subprime issue. Shuai Hu, a property analyst at Haitong
Securities, said: "The limitation on foreign capital's entry to China's
market has made the country the least affected market compared with
others in Europe and Asia."

"The subprime issue by itself is not drastic enough to force foreign
property funds to leave China's market," said Zhou Liang, head of
research at Lipper China. "These funds usually invest in large projects
that cannot be unloaded in the market easily, even if the investors want
to get out," he said.

Randall Hall, CEO of Savills Greater China, a major global property
service provider, told China Daily that the subprime issue would not
become the major concern for foreign investors. "Foreign investors will
not leave China's market - they are becoming even more active than
before. They are accelerating investment in China's property market."

In the near future, foreign investors will shift focus from Beijing,
Shanghai and Guangzhou "to the emerging markets in the second-tier cities
of China, including Shenyang, Dalian, Qingdao and Chengdu", said Hall.

(For more biz stories, please visit Industry Updates)

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