Vanke project

China’s biggest listed property developer, reports its real estate sales plunged 35% from a year earlier to RMB4.07 billion ($595 million) in August.

In terms of area, sales sank 33% to 474,000 square meters during the month. China’s property market has been faltering since late last year because of a slowing economy and cooling speculative purchases in high-end urban areas.

Vanke reports that in the first eight months of this year, real estate sales rose 5.0% from a year earlier in value terms to RMB31.31 billion, but shrank 4.8% to 3.49 million square meters in terms of area.

Early last month, Vanke reported a 24% rise in net profit for the first half of this year but scaled back its real estate development plans for the second half of this year.

It originally planned to start work on 8.48 million square meters of space and complete work on 6.89 million square meters this year, but revised those targets to 6.83 million and 5.86 million.
Source: Reuters

Part of Zhongguancun development

China property firm SOHO China  will pay RMB890 million ($130 million) for land-use rights at the ZhongGuanCun SOHO Project, an office and retail complex in Beijing.

The ZhongGuanCun SOHO Project has a construction site area of 5,654 square metres and a total saleable area of 54,260 square metres with 13 storeys above ground and 4 storeys underground comprising commercial, catering, offices and carparks, the company said.

The site will have a 19-story office builidng and 24-story hotel/apartment tower. The office building will have a third-floor lobby linking the tower to a park and other buildings within the development.

A five-star, 377-key hotel is included and the 129 service apartments will be integrated vertically within the tower. A landscaped courtyard, which incorporates three historic trees, will link the freestanding hotel/apartment tower with the office building and planned retail mall.
Source: Reuters

China property

Property sales and real estate investment in China continue to dwindle. Now some experts expect the situation will last longer than expected, with some smaller developers folding altogether.

Liu Wenwei, an economic planner, said sales of commercial homes totaled 277 million square meters nationwide in the first 7 months this year. The number is down nearly 11% from last year. And the growth rate is 37.2 percentage points lower than a year ago.

The amount of completed residential or existing homes is down 18% in terms of area, from a year ago. And the number of pre-sale residential homes is down nearly 8%.

Nie Meisheng, Chairwoman China Real Estate Chamber of Commerce, said, ‘China’s property sector is experiencing typical stagflation at the moment. Trading is declining, which also drags down investment. While real overall housing prices in the country are actually growing.’

Property investment has also slowed in China since the middle of the year. Figures from the National Development and Reform Commission show that during the first 7 months this year, Chinese developers bought 5% more land use right, year on year. But the growth rate declined 6.7 percentage points from a year ago. Land use right purchases in July alone dipped by 28%.

Nie Meisheng said,’Developers are very cautious now when taking land use right. One of the reasons is they have no clues as to what the market will look like in 2009. Another reason is that it will take them more time to balance their cash flows.’

Much more HERE.
Source: CCTV.com

Commercial property

The People’s Bank of China (PBOC) and the China Banking Regulatory Commission (CBRC) are urging rigorous credit management on commercial property projects to curb possible risks that could threaten the banking sector.

The policy will have significant impact on property developers as financing will be more difficult.

No loan will be given to developers to cover land transfer costs.
Loans for land reserve acquisition will be secured by property developers through the use of a mortgage and require a legal land use certificate.
The amount of the loan shall be less than 70% of the estimated value of the project.
The credit period will be confined to two years.
No credit of any kind will be offered to projects where land had been idle for two years or more.
Provision of credit will be more cautious to government-approved construction projects that have not started within a year after a land concession contract was signed.

This would also apply to projects where its developed land area was less than one-third of the total, or where the investment was less than a quarter of the total within a year after starting construction.
Source: China View

Lujiazui Skyline Pudong

Global buyout funds and property investors including Blackstone Group are vying to buy up to four commercial buildings in Shanghai for as much as $1 billion.

Super Ocean Group has put a package of four buildings on sale as it seeks cash to support its growth in other sectors.

The four buildings to be sold by Super Ocean include the Bank of Shanghai Tower in the Lujiazui area of Shanghai’s Pudong financial district, and Southern Securities Mansion, located on Nanjing Road, one of China’s busiest commercial streets.

Super Ocean aims to sell the four buildings together but potential bidders have the option to purchase three of the four. They put the price tag for the deal at RMB5 billion to 7 billion ($728.8 million-$1.02 billion).

It is suggested that talks between Blackstone and Super Ocean could collapse over valuation of the buildings.

One source said, ‘It’s not easy for Blackstone and Super Ocean to reach a deal as Super Ocean is probably asking too much for these properties. There are also concerns about the ownership structure, which is a bit complicated for some of the four buildings.’
Source: Reuters