Mingtiandi

Apple Expanding China Retail by Opening Shops in Chengdu and Shenzhen – and more of Today’s China Real Estate Links | May 18, 2012

Michael Cole — Fri, 18 May 2012 00:00:07 +0000

Here is a list of the day’s latest China real estate news collected from around the web:

Apple Expanding China Retail by Opening Shops in Chengdu and Shenzhen

Job listings for Apple Retail store leader positions in Shenzhen and Chengdu hint at the company’s plan to expand its retail operations to new cities in China. In 2010, Apple reportedly revealed to its shareholders plans open a total of 25 brick-and-mortar stores over the course of two years.
China Slowdown to End in Third Quarter, Survey Shows

China’s economic growth is likely to accelerate for the first time in seven quarters after banks’ reserve requirements were cut, buoying global expansion threatened by Greece’s possible exit from the euro. Third-quarter growth will rebound to 8.3 percent from 7.9 percent this quarter, according to the median estimate of 21 economists surveyed by Bloomberg News.
Michael Kors Plans Doubling of Greater China Stores by Year End

Michael Kors Holdings Ltd. (KORS), the luxury-goods maker and retailer, aims to more than double its Greater China stores by the end of the year as the clothing market surges. Shops in China, Hong Kong, Macau and Taiwan will jump to 15 by the end of this year from seven now and may gain to more than 100 over the next three to five years, Chief Executive Officer John Idol said yesterday.
CapitaLand Says Chongqing Government Backs Chao Tian Men Project

A consortium led by CapitaLand Ltd. (C31.SG) that is developing a S$4.3 billion mixed-use property project in the Chinese megacity of Chongqing has received backing from local government leaders, and is making planned progress on the development, the Singapore-based developer said Thursday.

This list is updated daily, so tune in again tomorrow for more up to date information.

Shanghai Says No More Houses for Single People – and more of Today’s China Real Estate Links | May 17, 2012

Michael Cole — Thu, 17 May 2012 00:00:05 +0000

Here is a list of the day’s latest China real estate news collected from around the web:

Shanghai: One house policy for singles

According to a policy released by Shanghai Real Estate Trading Center, if a single Shanghai householder has an apartment already registered under the owner’s name, they are unable to purchase another property, China Securities Journal reported May 15. As the report said, under the old policy that released in 2011, one single native person in Shanghai can buy a second house after the first one is registered under the owner’s name.
People’s Daily Says Real Estate Market Showing Signs of Recovery

After having cooled down in recent months, the real estate market in China is showing signs of recovery, due to pent-up demand, encouraging measures by local governments and easing macroeconomic policy, analysts said yesterday. ”Buyers who need apartments for their own use and who have been waiting for the right time to purchase since last year have started buying, as many real estate developers have cut house prices by 10 to 20 percent over the past few months,” said Yin Bocheng, director of the real estate research center at Shanghai-based Fudan University.
China’s Hong Kong Home-Buying Influx Wanes, Midland Says

Mainland Chinese investors accounted for a smaller percentage of Hong Kong’s new home sales for a second quarter as the nation’s banks tightened lending while local buyers returned to the market, Midland Holdings Ltd. (1200) said. Mainland purchasers made up 36.8 percent of all new home sales by value in the first quarter, from 37.9 percent in the previous three months, Hong Kong’s biggest publicly traded realtor said in an e-mail yesterday.

This list is updated daily, so tune in again tomorrow for more up to date information.

China Makes It Easier for Insurers to Invest in Real Estate – and more of Today’s China Real Estate Links | May 16, 2012

Michael Cole — Wed, 16 May 2012 00:00:08 +0000

Here is a list of the day’s latest China real estate news collected from around the web:

China eases investment restrictions for insurers

China’s insurance regulator will allow insurers to invest in a wider range of corporate bonds and relax limits on equity and real estate investment, granting them greater freedom to seek higher returns and play a stronger role in the financial system.
China Vanke acquires HK-listed property developer

China Vanke, the country’s largest property developer by market value, said late Monday that it has agreed to acquire a Hong Kong-listed real estate developer to aid in its overseas expansion efforts. Tan Huajie, Vanke’s board secretary, said the acquisition is just the first step in the company’s long-term overseas expansion plans.
Agricultural Bank Of China Buys Hong Kong Office Building For HK$4.88 Billion

Agricultural Bank of China Ltd. (1288.HK) bought an office building in Hong Kong for HK$4.88 billion (US$629 million) to serve as its regional headquarters, Colliers International, which advised on the purchase, said Tuesday. The deal, which analysts said is the largest purchase of office space this year in Hong Kong, marks the latest push by Chinese companies to invest in overseas property markets as the Chinese government is cracking down on domestic real-estate investment.

This list is updated daily, so tune in again tomorrow for more up to date information.

Fashion Label Paul Smith Plans Shanghai Megastore — and more of Today’s China Real Estate Links | May 15, 2012

Michael Cole — Tue, 15 May 2012 00:00:04 +0000

Here is a list of the day’s latest China real estate news collected from around the web:

Fashion Label Paul Smith Plans Shanghai Megastore in China Entry

Paul Smith Ltd., the British fashion label worn by celebrities David Beckham, George Clooney and Jude Law, is planning a flagship store in Shanghai to enter mainland China as the clothing market surges. The brand will set up a 5,000 square-foot (465 square- meter) location in Shanghai in December, and add 24 shops in China over the next five years.
Economists Expect China to Broaden Stimulus

A decision by China’s central bank to loosen monetary policy is not an antidote by itself for emerging weakness in the Chinese economy and is likely to be just the start of a broader program of economic stimulus by the government, economists said on Sunday.
China’s easing aimed at housing market

Concerns of a collapse in China’s housing market may have been foremost in the minds of Beijing policy makers as they sought to pump up bank lending with a cut to reserve ratios, according to analysts citing very weak data for the sector. The People’s Bank of China announced on Saturday it plans to lower then the ratio of reserves bank must set aside as deposits at the central bank by a half percentage point, effective Friday. See report on China’s bank-reserves cut.
China Growth Seen at 13-Year Low by Pimco

China’s slowdown may deepen as policy makers unwind the excesses of a record credit boom while gradually stepping up stimulus, leaving 2012 growth at the weakest in 13 years, Pacific Investment Management Co. says. “The economy is unlikely to bottom until the third quarter,” Ramin Toloui, Pimco’s global co-head of emerging markets portfolio management in Singapore, said in e-mailed comments yesterday. “Policy makers will progressively turn the dial toward more stimulus, but not in the aggressive manner of 2009,” restrained by the goal of tempering the credit-fueled property market, he said.
China Lower Bank Requirements as Real Estate Investment Plunges

In the face of increasingly gloomy economic data, China’s central bank announced on Saturday that it would be lowering bank reserve ratio requirements by 0.5 basis points effective May 18th. The move is aimed at increasing the available credit supply after April data showed a slow down in real estate investment and many other key sectors of the economy.
China April property investment growth slows

China’s annual real estate investment growth slowed to the lowest pace since the global financial crisis, official data showed on Friday, stoking expectations that curbs on the property market may be eased. Real estate investment, accounting for 13 percent of China’s gross domestic product in 2011, rose 9.2 percent in April from a year earlier, the first single-digit rise since November 2009 and a worrying sign for the 40-odd industries property affects.
China economy shows unexpected signs of weakness

China’s economy stuttered unexpectedly in April with lower than expected output data, softening retail sales and easing prices suggesting economic headwinds might be stiffer than thought, requiring more robust policy responses to counter them.

This list is updated daily, so tune in again tomorrow for more up to date information.

Shanghai’s Billionaires Owe Their Fortunes to Real Estate

Michael Cole — Sun, 13 May 2012 07:27:52 +0000

Real estate investors, manufacturers and professional investors are the wealthiest people in Shanghai, according to Shanghai Wealth Report 2012, which tracks the wealth of China’s super-rich.

The report, which was published on Friday by Hurun Report and the Australia-based independent financial adviser Gao Fu Wealth Management detailed China’s biggest billionaires and the sources of their wealth.

Not surprisingly, the largest chunk of Shanghai’s super-rich made their bucks in the real estate industry. Comparing the billionaires by sources of wealth, thirty percent of the ciy’s high net worth individuals listed real estate as the source of their wealth, either as investors or developers, twenty-seven percent attributed their fortunes to manufacturing, and only fifteen percent claimed finance as their primary business.

Commenting on the importance of real estate to the city’s wealthy, Rupert Hoogewerf, chairman and chief researcher of the Hurun Report noted, “This year’s report shows that property is the biggest source of wealth in Shanghai, while globally, most wealth comes from professional investment.”

Despite its reputation as the nation’s business capital, Shanghai’s super-rich individuals account for 12.9 percent of the national total, ranking it third in China in terms of the number of rich and super-rich individuals. Beijing and Shenzhen ranked first and second respectively, with Beijing reporting 460,000 high net-worth individuals with assets worth 100 million yuan or more. (Wait a minute… I thought most people in Beijing worked for the government and had measly salaries. Oh yeah, never mind).

In case you are curious here are a few facts about Shanghai’s wealthy from the report:

Shanghai has 370,000 people with assets of RMB 6 million or more, or one-in-65 people if you count the city’s popuulation as 23 million
There are 140,000 people in Shanghai with more than RMB 10 million, an increase of 6.1 percent over 2011
The city has 8,200 fortunate individuals with assets worth RMB 100 million
And in case you are wondering who just tried to run you down with that Ferrari on Nanjing Lu, it is most likely one of Shanghai’s has 250 people with assets of RMB 2 billion or more.

Pig-feed king Liu Yongxing, chairman of East Hope Group, and Zhou Chengjian, head of local casual fashion brand Metersbonwe, are the richest individuals living in Shanghai, with personal fortunes of RMB 41 billion and RMB 32 billion respectively.

The top Shanghai real estate billionaires were number three ranked Zhang Zhirong of Glorious Property with assets of RMB 25.5 billion and Xu Rongmao of Shimao with assets of RMB 25 billion.

China Lowers Bank Reserve Requirements as Real Estate Investment Plunges

Michael Cole — Sun, 13 May 2012 06:28:08 +0000

More cash all around please!

In the face of increasingly gloomy economic data, China’s central bank announced on Saturday that it would be lowering bank reserve ratio requirements by 0.5 basis points effective May 18th. The move is aimed at increasing the available credit supply after April data showed a slow down in real estate investment and many other key sectors of the economy.

Real Estate Investment Drops by 45 Percent in China

April’s data from the National Bureau of Statistics showed that the rate of increase in real estate investment during the first four months of 2012 had dropped nearly in half, climbing only 18.7 percent, down from 34.3 percent growth in the first four months of 2011.

Getting more precise about our timeline, real estate investment fell off a cliff in April as the rate of increase for January-March 2012 compared to 2011 had been 23.5 percent, so bringing the average increase over the first four months down to 18.7 percent means that not a lot of cash was going into the property market last month.

Besides real estate, other major indicators such as exports, imports and retail spending all showed lower than expected growth last month. Exports grew 4.9 percent in April — half as much as had been predicted. Industrial production rose 9.3 percent from a year earlier in April, slowing from a nearly 12 percent increase in March.

Imports basically came to a standstill, rising just 0.3 percent from April 2011, compared with expectations for an 11 percent increase. Retail sales increased 14.1 percent year-on-year during the month, slower than the 15.1 percent increase forecast by many economists.

China Shifts Focus Away from Inflation

The PBOC’s (People’s Bank of China) most recent cut in bank reserve ratios is the third such move in the past six months. In practical terms this means that big banks will be required to maintain reserves of no less than 20 percent of deposits, instead of the former 20.5 percent. Smaller banks will need to keep cash on hand equal to 16.5 percent of deposits once the new measure is implemented.

The loosening of credit is also a sign that the government has been successful in tackling inflation, which had been its top priority over the last several months. The same batch of data from the National Bureau of Statistics showed inflation had eased to 3.4 percent in April from 3.6 percent the month before.

With inflation under control, central government leaders now seem to have turned their attention to ensuring that they keep the economy moving fast enough to hit the growth target of 7.5 percent for the year. China’s economy grew 8.1 percent in the first quarter, which does not leave much leeway for dramatic drop-offs in expansion as were seen in April.

Why is the Chinese Govt Afraid of Implementing Property Taxes?

Michael Cole — Sat, 12 May 2012 13:46:56 +0000

Time to fast track China's property tax

According to a report this week in the official Shanghai Securities News, China will expand property taxes into more cities this year, beyond the current test programs in Shanghai and Chongqing. The Shanghai and Chongqing tax programs may also be broadened, according to an official from China’s Ministry of Housing and Urban-Rural Development who was quoted in the report.

So what took them so long?

Given that the government has being trying to restrict the residential real estate market for more than two years, it is moving surprisingly slowly to implement property taxes. Especially considering that property taxes should help to resolve the current conflict between the central government’s drive to cut property speculation in the residential market, and the dependence of local governments on hot real estate markets to support the land sales that provide much of their revenues.

Implementing property taxes would mean that investors who speculate in real estate would at least have to think about the costs of paying taxes on all those apartments before they make additional real estate purchases, and those taxes can be used to help make up for the shortfalls in land sales revenues that have been hurting local governments. Isn’t this what the locals like to call a “WIN-WIN” situation?

Property Taxes are Moving Slowly in China

The pilot property tax programmes currently underway were introduced in Shanghai and Chongqing at the end of January 2011, and while the report in the Securities News indicates that what is likely to be a nationwide program is moving forward, no dates or other details were provided, so it would seem that we are still several months away from implementing more such taxes.

In most parts of the US and other developed nations, property taxes are a major source of revenue for local governments, and help to pay for schools, roads and other projects. Just the sort of things that China has previously been supporting with land sales.

Existing Taxes on Homes are Severely Limited

According the Securities News report, it is the Shanghai model of property taxes that is likely to be propagated to other cities (after all no one seems much keen on emulating anything about Chongqing these days), but if the terms of the Shanghai tax program are copied in other cities, it is unlikely to produce much revenue. Here are some key details of Shanghai’s property tax according to a 2011 report from KPMG.

What Gets Taxed

For Shanghai resident families, the tax will be applied on newly purchased second or subsequent residential properties.
Non-Shanghai residents, all newly purchased residential properties will be taxed

Basis for the Tax

Taxed on transaction price of new purchase

The Tax Rate

Tax rate of 0.6% or 0.4% depending on size of the property

How the Tax is Applied

Tax payable = taxable area of newly purchased property (construction area) * unit price*70%*tax rate

Now if the relatively low rate and the limitation of the tax only to new purchases doesn’t convince you that this is not a meaningful revenue source for local governments, then you should also bear in mind that there is a standard exemption for local residents of 60 sqm per family member. On new purchases. On second or subsequent homes. So not a lot of people are paying tax.

Which brings us back to our original question. If the central government wishes to restrict speculation and control prices, and the local governments need new revenue sources, then what is preventing property taxes from being fast-tracked?

Some observers have suggested that the local governments needs time to build a property database before they can start implementing the tax — but surely tracking new transactions cannot be that difficult. And while it would be better to base the value of properties on some sort of assessment system rather than on purchase price, it should always be possible to modify the system as time passes and valuations drift away from the original sale price.

Perhaps we will see faster progress on property taxes once the new government steps in later this year, but for now it seems like an opportunity for more rational control of the real estate market is being missed.

China to levy property taxes in more cities during 2012 – and more of Today’s China Real Estate Links | May 11, 2012

Michael Cole — Fri, 11 May 2012 00:00:04 +0000

Here is a list of the day’s latest China real estate news collected from around the web:

China to levy property taxes in more cities during 2012

China will levy property taxes in more cities this year and expand pilot programmes in Shanghai and Chongqing, the official Shanghai Securities News reported on Thursday, citing an official at the Ministry of Housing and Urban-Rural Development. The State Council, the country’s cabinet, has already decided to expand the scheme, and will likely adopt the”Shanghai model”, according to which only certain classes of new homes are subject to property tax, the newspaper said.
China April Trade Data Cast Doubt on Rebound

China’s headline growth in imports unexpectedly stalled in April and exports were weaker-than-expected, raising doubts about the strength of the rebound in the world’s second-biggest economy.
Wanda ‘eyes bigger picture’ with reported AMC deal

Dalian Wanda Group Corp Ltd, which operates China’s highest-grossing movie theater chain – Wanda Cinema Line – is reported to be in talks with the US’ second-largest cinema chain, AMC Entertainment Inc, for a possible acquisition, according to The New York Times.
Yum to open restaurants in appliance retail stores

Suning agrees to host KFC, Pizza Hut and Little Sheep in 150 outlets
The fast-food giant Yum! Brands Inc said on Wednesday that it will open KFC and Pizza Hut restaurants inside stores operated by one of the largest electrical appliance retailers in China.

This list is updated daily, so tune in again tomorrow for more up to date information, or subscribe to our daily email news digest to get this delivered to your mailbox.

Overseas funds invest big in China property deals – and more of Today’s China Real Estate Links | May 10, 2012

Michael Cole — Thu, 10 May 2012 00:00:04 +0000

Here is a list of the day’s latest China real estate news collected from around the web:

Overseas funds invest big in China property deals

Foreign Investment has started once again to pour into the Chinese commercial real estate market as Chinese developers are selling properties to survive a lag in cash flow, Beijing Business Today reported. On Monday, US-based Pramerica Financial Group acquired a large shopping center development in Guangzhou for 2 billion yuan through a subsidiary after a year of negotiations.
AMC Entertainment in talks to sell to China’s Wanda Group

AMC Entertainment, the United States’ second-largest movie theater chain, is negotiating a deal to sell all or part of itself to Wanda Group, owner of China’s largest theater company, two people familiar with the talks said. The deal, if concluded, would make Wanda the first Chinese company to establish a major foothold in the North American theatrical business.
Australian Design Firm Wins Gigs in Beijing and Chengdu

MELBOURNE architecture and planning company CK Designworks has deepened its activities in China, winning two more large commissions. In Beijing, the company is designer architect for a $500 million hotel and retail complex, while in Chengdu it has been commissioned to design a 1 million square metre biological, medicine, science and technology park.
Yangzhou housing policy could see govt disapproval

Housing-management authorities in Yangzhou, Jiangsu province, introduced a policy on Tuesday that rewards homebuyers who purchase already finished residences, raising questions over whether that offer will come into conflict with the central government’s real estate restrictions. Yangzhou homebuyers who purchase finished homes, commonly known as refined decorated houses, will receive cash rewards that vary in accordance with the size of the residences they buy, according to a government circular posted on the housing authorities’ official website.
Foxconn Setting up China Headquarters in Shanghai

Apple supplier Foxconn plans to set up headquarters in China, as part of the company’s growing expansion in manufacturing and commercial operations. The building in Shanghai, which will be completed in early 2015, will house research and development and sales, and also act as a center for Foxconn’s e-commerce business in China.

This list is updated daily, so tune in again tomorrow for more up to date information, or subscribe to our daily email news digest to get this delivered to your mailbox.

Hong Kong Mall Builders Go West in China – and more of Today’s China Real Estate Links | May 9, 2012

Michael Cole — Wed, 09 May 2012 00:00:05 +0000

Here is a list of the day’s latest China real estate news collected from around the web:

Hong Kong Mall Builders Go West in China

Hong Kong developers are heading deeper into China to lure shoppers, investing at least $1.3 billion to build malls in Chengdu, the city vying with Chongqing as the economic hub of the country’s west. Swire Properties Ltd. (1972) will open a 6.4 billion yuan ($1 billion) retail and office project in downtown Chengdu in early 2014.
Germany’s Metro to double China stores in 3-4 yrs-paper

Germany’s Metro plans to double the number of its stores in China to more than 100 over the next three to four years to grab a bigger share of the country’s growing retail market, China Business News reported on Tuesday. Metro, which runs hypermarkets and consumer electronics stores in China, also launched a business-to-business online store on Monday.
Real estate developers struggle in sea of red ink

Listed property developers’ first-quarter reports have been coming in, and they’re full of gloom: More than 60 percent of those whose shares trade on the A-share market reported lower profits or losses. According to an index tracking 149 A-share developers, compiled by Shenyin & Wanguo Securities Co, their sales edged up just 0.18 percent to an aggregate 71.7 billion yuan ($11.4 billion), while their earnings fell 3.13 percent to 9.4 billion yuan.
Falling home prices spark protests by homeowners

More homeowners in East China’s Zhejiang province are protesting, as developers slash home prices without compensating earlier buyers. Discounts offered to attract new buyers already set off protests at three property companies in Hangzhou last week. Homeowners gathered in the sales offices, holding up signs and funeral wreaths from May 3 to 5 asking for compensation.
April CPI growth expected to hit 3.4%

The growth rate of China’s consumer price index (CPI) is expected to reach 3.4 percent in April, according to a survey by China Business News which questioned economists from 25 financial institutions. This predicted figure is lower than the 3.6 percent CPI growth rate recorded by the National Bureau of Statistics (NBS) in March.

This list is updated daily, so tune in again tomorrow for more up to date information, or subscribe to our daily email news digest to get this delivered to your mailbox.