Shanghai’s real estate market is anticipated to slow down drastically in 2008, becoming more vulnerable to government policy shifts and attract less investment. This is according to several of the larger real estate analysts.

According to a Jones Lang LaSalle report released recently, after the government implemented the land appreciation tax and imposed additional restrictions on foreign investment in the sector, real estate investment saw a slowdown in the fourth quarter of 2007 and there was only one sizable sale completed in the city.

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While the continued upward path of the Shanghai stock market has featured regularly in the world’s media, the city’s real estate market has not received so much attention. Nevertheless, property in China’s largest city is undoubtedly part of the boom and the web of economic dilemmas facing the Chinese authorities.

The latest efforts to curb real estate speculation have resulted in the introduction of a 20% tax on second-hand property sales. One explanation given for the increase is the authorities’ desire to prevent a speculative bubble in real estate fuelled by profits from the stock market. Another, more plausible reason is that the lure of the stock market is so great that people are selling property in order to finance speculative investments. This tax hike should certainly be seen in the context of Prime Minister Wen Jiabao’s general efforts to decelerate the juggernaut of the Chinese economy.

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SHANGHAI and Beijing office properties are on top of the world - and that’s official.

The two cities led the way with an average eight percent return on investment ratio among the world’s top 12 real estate markets last year, according to a definitive report by a respected international property adviser.

In its inaugural edition of Global Investment View, CB Richard Ellis also said investment in office buildings continued to surge, with Asia and Europe recording the most significant increases in activity.

In particular, Beijing attracted 29.8 billion yuan (US$3.8 billion) in office investment in 2006, as compared to 16.7 billion yuan in 2005.

Shanghai secured 22.6 billion yuan (US$2.8 billion), an increase of 3.2 percent from a year earlier.

A substantial rise in cross-border investment activity was also recorded, as competition among investors, yield compression, and a limited pool of desirable assets have led investors to broaden their geographic search for opportunities.

According to the report, Shanghai led the Asian market with nearly 6.4 billion yuan last year, more than twice the three billion yuan recorded in 2005. American investors were responsible for 2.5 billion yuan, up from two billion yuan a year earlier.

“The increasing volume of global office investment activity over the past five years reflects the abundant institutional and private-investor capital that has been allocated to real estate and the migration of this capital across borders in pursuit of opportunity,” Gregory S. Vorwaller, president of CBRE’s investment properties group, said in the report.

“Diversification across both geography and property types will continue to drive investment portfolio decisions around the world.”

Generally, China’s mainland real estate market, which includes residential, office, hotel, retail and industrial properties, continued to be in the global investment spotlight last year.

Market Office investment Return on volume in 2006 investment rate

Beijing                  US$3.7b      8%

Shanghai              US$2.8b      8%

Toronto                US$1.4b      6.5%

New York              US$23.3b     6.3%

Chicago                US$8.1b       6.3%

Los Angeles          US$8.3b       6%

Sydney                 US$1.8b       5.5%

Singapore             US$2.7b        4.9%

Hong Kong*          US$1.9b        4.5%

Madrid                  US$2.7b        4.25%

Paris                    US$21.2b       4%

London                US$27.6b       3.75%

*Hong Kong investment totals are for the 12-month period December 1, 2005 through November 30, 2006.

Source: Shanghai Daily

PROPERTY transaction centres in Shanghai now require foreigners to show immigration records when buying homes to prove that they have lived on the Chinese mainland for more than a year, the Oriental Morning Post reported today.

China unveiled a string of new policies in July to restrict overseas property investment on concerns of that an influx of foreign capital would aggravate speculation in the domestic housing market.

Under the new policies, foreigners can’t buy homes or apartments on the mainland until they’ve been here at least a year. Those who meet the residency rules must purchase property only for their own use and cannot lease it to others.

Shanghai property transaction centers can make up own rules on trading on the basis of these policies, according to Shanghai Municipal Housing, Land and Resource Administration Bureau.

Four Shanghai districts, Jing’an, Xuhui, Baoshan and Pudong New Area, have banned foreigners and overseas Chinese from buying second homes within their jurisdictions since October.

Among other measures, overseas institutions and individuals that want to purchase property for purposes other than their own use must set up a company in China, according to a joint circular issued by six government agencies.

Source: Shanghai Daily

Dubai: Emaar Properties has opened a full-fledged office in Shanghai, marking its entry into China with a plan to roll out a number of real estate projects including residential, commercial, hotels and hospitals, a company statement said.

The move comes following the Dubai-based real estate developer’s major foray in key growth markets including Saudi Arabia, India, Morocco, Egypt, Syria, Turkey and Pakistan with projects value combinedly exceeding Dh230 billion, including Dh100 billion in Saudi Arabia, Dh78 billion in Pakistan, Dh25 billion in Morocco, Dh10 billion in Turkey and a further Dh20 billion in India.

Earlier, it acquired US-based John Laing Homes for Dh3.856 billion ($1.050 billion), a strategic move that has firmly perched Emaar in the international spotlight.

Emaar is the third UAE entity to have made major foray into China, the world’s second largest economy following DP World and Damac Propertieswho have already pledged sizeable investment in the People’s Republic.

“Emaar’s multi-pronged approach to tap into the Chinese economy, which gained a 9.9 per cent growth in 2005, will flag off with the development of modern, community-centric lifestyle developments in Beijing and Shanghai. These residential projects will feature the entire spectrum of amenities including fitness centres, retail malls, schools as well as hotels,” the company said in a statement.

Mohammad Ali Al Abbar, Emaar chairman, said the premises in the Jiushi office building in Shanghai will open this month. The office will steer Emaar’s ambitious investment plans for the world’s second largest economy.

“Emaar’s entry into China completes a strategic leg of our international expansion programme that focused on three booming markets the Middle East, the India Subcontinent and now China,” Al Abbar said.

“Following its entry into the WTO in 2001 and market reforms gaining pace, the Chinese economy has been growing at an impressive rate. Its contribution to the global GDP growth is more than that of America as well as that of the three next-largest emerging economies India, Brazil and Russia. Underpinning this growth momentum is the property sector.”

Beijing and Shanghai are two focal points for Emaar’s entry into this mega market. In particular, Beijing will be the venue for the 2008 Olympics and Shanghai will host the 2010 World Expo.

Source: Gulfnews
Related links:

• DP World to invest in new terminal at Tianjin, China (News Article)
• Chinese Government and DAMAC sign Landmark MOU (News Article)
• Press release from Emaar Properties on its entry into the Chinese market

Source: ShanghaiDaily.com

The real estate market (particularly luxury apartments and commercial properties) in Shanghai, China has been the fastest growing in the world with annual capital appreciation at 20% in the last 10 years. Property Frontiers’ has just launched a cutting edge website Invest In Shanghai dedicated to information relating to the buying process, economy, steps and issues involved in purchasing investment property in Shanghai, China. It is available on http://www.investinshanghai.co.uk/.

Source: ShanghaiDaily.com

• 5 Star Building with Full Amenities and Facilities
• Fully Furnished and Serviced Luxury Apartments
• 7.5% Guaranteed Rental for 5 Years
• 50% Mortgage Financing Available
• Excellent Location in Main Commercial and Executive Area of Shanghai
• 15 Minutes from Hongqiao Domestic Airport
• Developed by one of Shanghai’s Largest and Most-Renowned Developers, Yangzijiang Construction Group
• Optional 7 Days’ Free Stay per Year for Owners

Located in the Hongqiao district, the main commercial area and one of the best locations in Shanghai, Plaza Hyundai will help to solve Shanghai’s significant hotel accommodation shortage problem whilst offering investors the benefit of high expected capital appreciation, a guaranteed rental return of 7.5% a year for 5 years, and an optional mortgage of up to 50% over 10 years. The Hongqiao area of Shanghai, where more then 300,000 expatriates, overseas business people and their families are located, attracts many foreigners because of the location near to the main business area, schools, shopping centres, consulates, and the exhibition centre. The development will house three main buildings: The residential Plaza Hyundai hotel/ service apartment tower (the first high grade building for serviced apartments in the area). There are 25 floors with 22 units on each floor which are decorated and fully furnished. The lobby will provide a restaurant/coffee shop, swimming pool, 6 elevators and underground parking. 23 floors of commercial office space situated directly opposite. The conference centre and club with separate spa, gym and other facilities, serving both the hotel and office buildings. Key Facilities

• High-Speed Internet and Cable TV
• Air Conditioning in All Rooms
• Swimming Pool and Spa
• Gym
• Restaurant, Bar and Coffee Shop
• Room Service
• Housekeeping Service and Maintenance
• Laundry and Dry Cleaning Service

For further Information on this property, please contact Property Frontiers Telephone: +44 (0)870 4292884 Fax: +44 (0)870 4292885 Website: www.propertyfrontiers.com/hplaza