Mingtiandi

Beijing Office Rents Jump 73% in 2011

Michael Cole — Mon, 06 Feb 2012 04:46:55 +0000

A recently published research report from real estate consultancy Cushman and Wakefield showed Beijing office rents surging 73% in 2011 with rates in Shanghai increasing by 19.7% over the year.

The Cushman report, which compared office rental rates worldwide saw rates in greater China continuing to be among the world’s most expensive, with Hong Kong now outranking New York and Tokyo as the spendiest spot to set up some desks and put down some carpet tile.

For Beijing, Cushman saw office rental rates in the fourth quarter of 2011 for grade A space standing at RMB 507/sqm/month (RMB 16.6/sqm/day for us Shanghainese) an increase of 73 percent over the same period of 2010. Vacancy rates in the nation’s capital were seen at 2.7 percent — a drop of 4.3% compared to 2010.

In Shanghai, the consultancy estimated that average rents for grade A space in the fourth quarter of 2011 were RMB 414/sqm/month (RMB 13.57/sqm/day in Shanghainese), an increase of a mere 19.7 percent over the previous year. Cushman indicated that vacancies in Shanghai accounted for only 4.8 percent of total grade A space, a decrease of 3.2 percent compared to the previous year.

All of Cushman’s rental rate numbers were based on net effective rentals.

For those of you interested in seeing the reports in detail, here are links to the the reports on RightSite:

Also, we have uploaded Cushman’s office and retail research reports for Beijing, Shanghai, Chengdu, Guangzhou and Shenzhen to RightSite, and you may view them on our research report page here.

Moody’s Predicts a Long Winter for China Real Estate Developers

Michael Cole — Mon, 06 Feb 2012 01:27:52 +0000

Flagging sales and tight credit may be causing more hurdles for China’s real estate developers than has previously been acknowledged, according to a report last week in Caixin.

The Chinese financial newspaper spoke to a number of industry observers including officials from state-run developers and representatives from credit rating agency Moody’s who foresee financial shortfalls bringing about consolidation in the industry with little meaningful policy relief.

Although there have been some indications that real estate policies may be “fine-tuned” this year, the analysts and industry players that Caixin spoke with remained skeptical about the availability of financing for real estate developers.

Speaking to Caixin, Zhong Wenquan, a vice president with Moody’s Investors Service foresaw particular hardships in 2012 for mainland developers listed in Hong Kong. According to Caixin,

Zhong said Moody’s is now “most worried about” developers who previously borrowed from overseas investors or whose stocks trade in Hong Kong, and are not allowed by regulators to issue bonds for fear they won’t repay the debt.

Some may be unable to repay foreign investors, he said, at a time when “the overseas financing market is very bleak right now, and the overall international economic situation is not optimistic.”

Just in case you are still wondering who will come out of the current developer crisis as the winners, an executive at a central government developer told Caixin that while lending will be tight across the board in 2012, he believed that,

“State-owned enterprises may have some advantages and may get a few more loans than others.”

So watch this space in the coming weeks for news of large, central government-controlled developers “assisting” smaller private or local government controlled developers by taking over sizable chunks of their shares or buying their assets.

Centralising control of real estate assets under state-owned enteprises controlled directly by the central government. Why does that sound familiar?

NDRC Squelches Mortgages for Foreigners Buying Homes in China

Michael Cole — Mon, 06 Feb 2012 00:51:31 +0000

Good news everyone! The leading minds in China’s bureaucracy have come up with an elegant solution to runaway real estate prices – stop all those foreign banks from lending money to all those foreign people buying homes in China.

The NDRC announced recently that it won’t approve medium- and long-term foreign debt quotas for overseas banks operating in China in 2012, if they intend to use such borrowings to fund mortgages taken out by foreigners.

Never mind that restrictions put in place over the last few years require any foreigner buying a home in most places in China to have worked here for at least one year and to put down at least a 50% deposit, the existential threat of foreigners buying up flats in Lanzhou demands direct and decisive intervention by China’s leading decision-making body.

Bloomberg spoke with James MacDonald, head of research at Savills in China who had this to say about the impact of this latest measure,

This is actually only going to have a perceivable impact on the mid-to-high end of the market. Foreign buyers only make up a tiny proportion of the overall China market and are not very active in the ultra high-end or mass market.

I would say that James’ assessment is generous, but perhaps he is just trying to be a nice guy.

However, if you are a foreigner in China and you were thinking of settling down here to enjoy the retirement and health benefits that the government recently required you and your employer to pay for each month, then you had better be prepared to pay 100 percent cash up front for your home.

No related posts.

Today’s China Real Estate Links | February 6, 2012

Michael Cole — Mon, 06 Feb 2012 00:00:06 +0000

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

Standard Chartered’s Green Says Economy to Expand 8.1% in 2012

China’s economic growth will decelerate to around 8.1 percent this year and edge up to 8.7 percent in 2013, Stephen Green, economist with Standard Chartered Bank (China), said Saturday.
He said in an interview with Xinhua that China’s manufacturing activity is far from optimistic despite the country’s Purchasing Managers Index (PMI) for the manufacturing sector rose slightly in January.
China Real Estate Cools While Jakarta Sizzles

According to Jones Lang LaSalle’s latest Q4 2011 Asia Pacific Residential Index, which follows eight luxury residential markets within the region, there was on average a 0.2 per cent increase in capital value in the fourth quarter of 2011.While Beijing, Bangkok, Jakarta, and Mumbai witnessed an increase, and Kuala Lumpur and Singapore remained stable, Hong Kong and Shanghai slumped.
China Limits Mortgage Loans for Foreigners, NDRC Says

China will limit mortgage loans for home purchases by foreigners to stem overseas investment in its property market as part of efforts to cool prices.
Vanke, Guangzhou R&F Jan sales see sizeable drops

China Vanke, the country’s largest developer by sales, said on Friday its sales stood at 12.2 billion yuan ($1.94 billion) in January, a fall of 39 percent from a year earlier, as Chinese developers began the year on a sour note.
Asian investors buying up London’s prime new build property

People from the world’s new economies, primarily Asia Pacific, Russia and the Commonwealth of Independent States (CIS), are a different type of buyer to those from the older economies such as the UK, North America and Middle East, whose buyers have been coming to London for decades.
Beijing Ratchets Up Office Rents by 75%

The local office market saw office rents rise astronomically to $130 per square foot in 2011, an increase of 75% from a year prior, according to a recent report from Cushman & Wakefield. However, it’s believed the city, and the rest of the global office market, will see a slow-down of activity in 2012 as owners and tenants pause to feel out fundamentals such as the European debt market and troubles in the Middle East.
China Overseas Land forecasts sales dip in challenging year

China Overseas Land & Investment Ltd, the largest mainland property developer by market value, on Thursday forecast an 8 percent decline in its sales this year, which its top executive said will be “challenging” for developers.

This list is updated daily, so tune in again tomorrow for more up to date information, or subscribe to our daily email news digest on the subscription form in the right-hand column.

Digest powered by RSS Digest

Today’s China Real Estate Links | February 3, 2012

Michael Cole — Fri, 03 Feb 2012 00:00:10 +0000

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

China Home Prices May Decline as Much as 15%, GreenOak’s Kalsi Says

Chinese home prices may fall as economic growth decelerates and income gains lag development, said panelists at the Bloomberg Link China conference.
“I don’t think China’s going to blow up, but prices are ahead of affordability,” Sonny Kalsi, a founder of GreenOak Real Estate and former global co-head of property at Morgan Stanley, said at the panel discussion in New York today.
Policies, developers’ cuts push housing prices down again

China’s home prices fell for a fifth month in January as the government maintained its curbs on the property sector and more developers cut prices to stimulate sales.
According to SouFun Holdings Ltd, the nation’s biggest real estate website portal, property prices nationwide fell 0.18 percent last month from December. Prices dropped in 60 of 100 cities tracked by the company, the same as in December, it said on Wednesday.
Jones Lang LaSalle to add 1,250 jobs in China, India

Jones Lang LaSalle Inc , the world’s second-largest property brokerage and advisory group, will add about 1,250 employees in China and India this year, according to the head of its Asia business, as it looks to those emerging nations and Indonesia for growth amid unusually choppy property markets.
Shanghai banks lower mortgage interest rates

Several Chinese banks in Shanghai are lowering their interest rates on mortgages for first-home purchases, and some foreign-funded banks are also offering discounts, according to a report in the China Business News on Tuesday.
China’s average housing prices fall in January

The average housing price for 100 major cities across China was lower for a fifth consecutive month in January, a survey showed Wednesday as the residential property sector remained cool, though the decline in property prices is losing steam.
China Home Prices Post Longest Stretch of Declines on Curbs, SouFun Says – Bloomberg

China’s home prices fell for a fifth month in January as the government continued to control the property market, the longest losing streak since SouFun Holdings Ltd. (SFUN) started tracking the data.

This list is updated daily, so tune in again tomorrow for more up to date information, or subscribe to our daily email news digest on the subscription form in the right-hand column.

Digest powered by RSS Digest

More Downward Data for China’s Residential Market

Michael Cole — Thu, 02 Feb 2012 12:00:53 +0000

The latest data on China’s residential real estate market is out, and the indicators continue to point down, with some analysts predicting a net 15% downturn this year compared to 2011 values.

In a report this week from Soufun and China Real Estate Index System (CREIS) the average price for housing in 100 of China’s major cities dropped for a fifth straight month in January, although the rate of decrease had moderated compared to what was seen in December.

Among the 100 markets surveyed, 60 cities recorded a drop, with 39 communities seeing a price increase. Prices are still higher than at this time a year ago, however, with the average price nation-wide of a new home in January 1.71% higher than in the same month in 2011.

According to an article in Dow Jones Marketwatch,

China Real Estate Index System said the survey of property developers and real-estate agencies showed the average home price in January was 0.18% lower from a month earlier at CNY8,793 a square meter. The average home price in December stood at CNY8,809, down 0.26% from November’s CNY8,832. The survey, which the company compiles together with online real-estate brokerage SouFun Holdings Ltd., has been widely followed since China scrapped a national property price index in February last year.

Meanwhile over in the US, market watchers are predicting a continuation of China’s residential real estate decline in 2012. Speaking at the Bloomberg Link China conference in New York on February 1st, Sonny Kalsi, a founder of GreenOak Real Estate and former global co-head of property at Morgan Stanley, commented,

“I don’t think China’s going to blow up, but prices are ahead of affordability, At a minimum, it will take some time for growth to catch up to valuations. On the less generous end, we could have real price declines of 10 to 15 percent.”

For investors wondering where former Morgan Stanley big-shots who drove through Shanghai and Beijing once and were warmly welcomed to China by their office staff would put their Middle Kingdom kuai, Kalsi further asserted,

Opportunities for investors are in “budget retail, budget hotels, not five-star hotels, affordable housing,” Kalsi said. “It’s not Class A office buildings.”

As I recall, Morgan Stanley didn’t do all that great with budget hotels in China, but I guess the point of speaking at conferences is more about making bold statements than making supportable assertions.

Questions for Fosun’s CEO Liang Xinjun

Michael Cole — Thu, 02 Feb 2012 06:45:39 +0000

Now that I’m a well-connected blogger in China’s real estate world, I have scored the opportunity to have lunch tomorrow with the CEO of Fosun, Liang Xinjun.

For those of you who need a refresher, Fosun is the parent company of the real estate developer Forte and recently made the news as part of an awkward partnership with the more flamboyant SOHO China for a development on Shanghai’s Bund.

It will be interesting to see what Mr Liang has to say about the outlook for China’s real estate market in 2012, and I will also try to ask him how it is that SOHO was able (if they really were) to buy 50% of that Bund site without Fosun’s permission, if Fosun actually had first refusal rights on the deal.

In the meantime, if any of you have questions for Fosun, please be sure to send them along and I will try to ask on your behalf.
A full report will be on Mingtiandi tomorrow.

Today’s China Real Estate Links | February 2, 2012

Michael Cole — Thu, 02 Feb 2012 00:00:39 +0000

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

China’s Wen Says Property Curbs to Stay, Reiterates Fine-Tuning

China’s Premier Wen Jiabao reiterated that the government will maintain curbs on the property market to bring prices down to a reasonable level and economic policies will be “fine-tuned” to support growth.Wen also repeated his call to strengthen credit support to the “real economy” and small and medium-sized companies.
China to launch database to curb property speculation

China plans to launch a housing database linking 40 major cities, which analysts said Tuesday would close a loophole in ownership restrictions and lay the groundwork for a nationwide property tax.
Office Rents, Capital Value Growth in Asia Pacific Moderate in 4Q

According to Jones Lang LaSalle’s latest Asia Pacific Office Index, office markets in Asia Pacific experienced mixed fortunes in the fourth quarter of 2011. Despite a slowdown in average office rental growth and capital values, growth in some markets continued whilst others saw a slowdown in growth rates.

This list is updated daily, so tune in again tomorrow for more up to date information, or subscribe to our daily email news digest on the subscription form in the right-hand column.

Digest powered by RSS Digest

Mike’s Weekly Tweets for 2012-02-01

Michael Cole — Wed, 01 Feb 2012 06:00:00 +0000

北京奔驰汽车零部件配套产业园在亦庄启动 – 最新新闻 http://t.co/bi1MK7Jt #
北京奔驰汽车零部件配套产业园在亦庄启动 – 最新新闻 – http://t.co/HziZc5CX #
Beijing Benz Auto Parts Park Announces RMB 4.9 Bil in New Projects – and more China real estate news http://t.co/kd6wsEoT #
Beijing Benz Auto Parts Park Announces RMB 4.9 Bil in New Projects – and more China real estate news – http://t.co/AmTXp7YE #
HK’s Wharf Ups Bond Issue to $600 Mil to Meet Demand | And more China real estate news… – http://t.co/YqUSTmQy #
Eastday-City retailers have reason to smile | and more of today's China real estate headlines – http://t.co/vGnMfnBS #
Thirty cities get half of global property dollars | and more of today's China real estate headlines – http://t.co/8zQcT8aA #
Hong Kong Stocks Climb to Four-Month High as Exports Increase | and more of today's China real estate headlines – http://t.co/Fx7H85cu #
Company gets consumers to write favorable product reviews for $2/star http://t.co/OrdqWz6O That explains a lot of my Christmas presents! #
I have about 750 contacts on #LinkedIn and 175 of them changed their jobs in 2011. 23% turnover in #China #
is using Job Change Notifier http://t.co/shHiLSGl #
When the drivers in China turn their high-beams down as they pass on the road, they will be ready for revolution http://t.co/0ZtHDNd9 Hanhan #
China's Hidden Wealth Feeds an Income Gap – http://t.co/Lgi2r4sW | and more of today's China real estate headlines – http://t.co/x5WCVxNh #
Evergrande to develop $2.4 bln project in China's Harbin | Reuters | and more of today'… – http://t.co/gs2vMEGV #

Today’s China Real Estate Links | February 1, 2012

Michael Cole — Wed, 01 Feb 2012 00:01:07 +0000

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

Policies chill property sales

China’s major cities saw a drop in property sales during the Lunar New Year holiday, indicating a further correction in the real estate market.SouFun Holdings Ltd, China’s largest property website, said on Monday that among the 29 cities it monitors, 27 experienced a drop in property transactions.

Tags: research, data, soufun
Chinese buyers pick up property in Australia

Foreign developers made up about 30 per cent of the Australian market last year, and China took up 9 per cent of that – an increase over previous years.The China Daily News reported that more than 1,200 apartmentswere either planned, being marketed or were under construction by Chinese companies in Australia in the fourth quarter of 2011, according to real estate firm CBRE. The Chinese mainland was only led by Singapore (37 per cent), Hong Kong (20 per cent) and Malaysia (12 percent ).

Tags: overseas-investment, australia
Wharf upsizes bond to $600 million amid roaring demand
Several Marimekko stores to be opened in China

Significant partnership aims to open 15 Marimekko stores in China and Hong Kong by the end of 2016.Marimekko has today signed a partnership agreement with Hong Kong-based Sidefame Ltd who specialises in retailing a range of fashion and lifestyle brands. The aim of the partnership is to open 15 Marimekko stores in China and Hong Kong by the end of 2016. The stores will be owned by Sidefame, and their location, visual aspects and local marketing will be closely in line with Marimekko’s policy.

Tags: marimekko, retail, mtdcre
Cushman’s Hong Kong and Asia Pacific Property Market Forecast

Cushman & Wakefield, the world’s largest privately owned real estate services firm, today announced its forecast for the Hong Kong and Asia Pacific property markets, which covers the commercial leasing, investment and residential markets.Decline in leasing of Grade A office space expected, rents to drop by 5% to 15%.

Tags: cushman, research, hongkong, mtdcre
Shares of E-House China Under Pressure, Down 3.9%

E-House China (NYSE:EJ) is one of today’s notable stocks in decline, down 3.9% to $5.67. The S&P is currently trading 0.9% lower to 1,305 and the Dow Jones Industrial Average is trading 0.8% lower to 12,565.Potential upside of 26.7% exists for E-House China, based on a current level of $5.67 and analysts’ average consensus price target of $7.18. The stock should find resistance at its 200-day moving average (MA) of $7.47, as well as support at its 50-day MA of $5.37.

Tags: e-house, stocks, mtdcre
Real estate down under proving to be very attractive

Chinese investors are showing an increasingly high level of interest in the Australian property market. Chinese developers were responsible for 9 percent of the 30 percent share foreign developers took in the Australia apartment market last year.
In a review by real estate company CBRE for the fourth quarter, more than 1,200 apartments were either planned, being marketed or were under construction by Chinese companies in Australia. The Chinese mainland was only led by Singapore (37 percent), Hong Kong (20 percent) and Malaysia (12 percent).

Tags: overseas-investment, australia, cbre,

This list is updated daily, so tune in again tomorrow for more up to date information, or subscribe to our daily email news digest on the subscription form in the right-hand column.