Sam Zell

Equity International, the private equity real estate firm co-founded by Sam Zell and Gary Garrabrant, has acquired its third company in China. Yupei develops, owns and manages industrial, warehousing and logistics properties. Price was $46 million.

Gary Garrabrant

The Chicago-based private equity real estate firm  said it closed the deal with the private Shanghai Yupei Company which currently has five properties in four cities across China, comprising approximately 350,000 square meters. The deal marks Equity International’s third portfolio company in China.

Gary Garrabrant said there was increasing demand for new warehouses in China, driven in part by the obsolence of old stock and a lack of suitable space. He said the growth in domestic consumption would fuel this further adding there were ‘powerful fundamentals’ for the sector.
Source: Private Equity Real Estate

China Construction Bank

China Construction Bank (CCB), the country’s third-largest lender, said its net profits increased in the third quarter.

According to a release CCB’s net profits grew 11.95% to RMB25.6 billion ($3.74 billion) from July-September.

Net interest income rose 14% to RMB57.1 billion in the third quarter. Net earnings were RMB0.11 per share, based on domestic accounting standards.

Welcome to China Construction Bank

That’s up 10% from the same period last year

At the end of September, the lender held subprime mortgage securities valued at $244 million.

Sadly, it also had $191 million in bonds issued by Lehman Brothers and $1.51 billion issued by Fannie Mae and Freddie Mac.

The government’s latest tax initiatives, which exempt first time property buyers from paying the stamp tax, helped buoy the country’s cooling real estate sector.

China also lowered the down payment from 30 to 20% for first time home buyers which strengthened the property market.

Analysts said these adjustments boosted CCB’s profitability as it is the nation’s leading mortgage lender.
Source: China View

According to China Central Television (CCTV) China’s central government will promote the healthy development of the nation’s capital market and maintain the stability of the country’s property sector to prevent possible financial risks.

At a central government meeting attended by President Hu Jintao, Premier Wen Jiabao, the central government vowed to take all possible measures to curb the country’s excessive inflation.

It allowed the country needs to improve its macro-economic controls and boost the production of necessities including grain, edible oil and meat.

Chiming in, the central bank said the country is to take effective measures to prevent prices from rising too rapidly and guard against big fluctuations in asset prices.

Now a slight internal contradiction.

The consumer price index climbed 7.7% year-on-year in May. While that was down from the 8.5% rise in April, it was still well above the government’s target.

This has affected the stock market. The Shanghai stock index fell 14% in a week as investors focused on rising global oil prices and tighter domestic monetary policy by the central bank.
Source: Forbes

Xinyuan Real Estate, a foreign-funded real estate firm based in Henan Province, central China, is now listed on the New York Stock Exchange, becoming the first Chinese real estate firm to be offered on an American exchange.

According to its prospectus Xinyuan raised US$299.5 million from its initial offering.

An analyst said the biggest attraction of Xinyuan for foreign investors is that they are optimistic on the emerging estate markets in China.

The real estate business of Xinyuan is mainly in medium-sized Chinese cities. The company has nine wholly owned subsidiaries and two related companies. It has developed a total area of 939,000 square meters over the past decade and more than one million square meters are still under construction.

It maintains a compound annual growth of 86% in sales contracts.

Xinyuan was jointly started by Equity International and Blue Ridge China in cooperation with Henan Xinyuan Real Estate in August 2006.

So far, there are 38 Chinese companies listing on NYSE.
Source: Trading Markets

The National Development and Reform Commission, the government’s main economic planning agency, reports that housing prices in 70 major Chinese cities jumped by 10.5% in November over a year earlier.

NDRC’s pricing director, Cao Changqing said the increase was the biggest monthly rise since the government began keeping track of that data in July 2005.

He said from January to November, housing price grew by 7.3% year-on-year, with price of new homes jumping 7.9%.

Meanwhile, the National Bureau of Statistics reports that despite government curbs meant to prevent runaway spending China’s investments in factories, real estate and other urban assets rose 26.8% in the first 11 months of this year.

Total investment in such fixed urban assets during the period was RMB10.1 trillion ($1.4 trillion).

The worry at government levels is that rising spending on factories, real estate and other projects could start a debt crisis if a glut of unneeded projects leads to widespread defaults on bank loans.

The January-November increase compares with a 26.9% increase in the first 10 months of the year, which is a very minor change despite the fact the government had enforced repeated interest rate hikes, reserve ratio increases and administrative decrees against increased lending for such projects.

Cao Changqing said, ‘Despite falling sales, housing prices in parts of Beijing, Shanghai, Guangzhou, and Shenzhen still remain high.’ But housing price is expected to remain stable as the macro-control policies are starting to yield results.
Source: People’s Daily Online