Chang Zhou Shopping Mall

U.S. private equity firm Blackstone Group has struck a deal to pay less for a bigger stake in a Shanghai commercial property, as the global financial turmoil further weighs on China’s real estate market.

Blackstone will buy 95% of the Changshou Commercial Plaza for RMB536.7 million($78.52 million) in cash from VXL Capital , dow from its original plan in June to take a 90% stake for RMB625.5 million.

The deal will be closed by the end of October, VXL said.

Blackstone last week siad it still aimed to complete property deals in Shanghai with VXL and Super Ocean Group, although a company official said valuations in China needed to come down.
Source: Reuters

An estate broker enthusiastically introduces apartments for sales to a potential home buyer at a housing exhibition in Huangshan City, central China

During the National Day holiday, property transactions hit a record low of 72% down year-on-year, in Beijing, which is usually the busiest time for housing sales. This is the worst period so far this year.

Liu Feng, a business director with Career International, one of the leading recruitment and consulting companies in China, says property agencies are the worst hit during downward housing sales as most of real estate developers give their apartments to agencies to sell.

It’s estimated that almost 800 branches of various property agencies were closed in Beijing, and half of the locations and agents were slashed in Shanghai since the fourth quarter of last year.

Manager Chen Min predicts it will need one or two years for the housing market to come stable and develop again.
Source:  China Daily

This is probably not the founder of Blackstone but the Internet was down and I had a plane to catch and he seems a pleasant cove.

Private equity firm Blackstone Group has canceled a property deal with VXL Capital, for the $160 million acquisition of a commercial building in Shanghai.

Blackstone was originally planning to buy four buildings in Shanghai, for up to $1 billion, but has ditched the acquisition of a 90% stake in Changshou Commercial Plaza.

The report said that the seller, Hong Kong-based VXL Capital, and the American equity firm could not agree on the price, reported to be around $160m. VXL apparently bought the entire property in March 2006 for $86 million.

It is also not clear whether Blackstone will agree to buy the Skymall Shopping Centre in Shanghai from Chinese developer Super Ocean Group.

The global financial crisis and national forecasts that Chinese property prices will slide may have added to Blackstone’s withdrawal.
Source: Biz Update

The problems of housing prices

For four days, the Chinese Communist Party elite has been meeting behind closed doors in Beijing to thrash out what new policies should govern the fastest-growing economy in the world, and how to prevent the global financial crisis from damaging China’s continued prosperity as much as that of the West.

The meeting is taking place just as ominous signs are emerging that the financial meltdown in the US is having an impact on China.

The property boom of the last few years has come to an abrupt halt.

High prices and a surplus of new homes meant that in September, traditionally the best month for house sales, there were the lowest number of transactions so far this year.

Developers in the worst-hit cities, Beijing, Shanghai and Shenzhen, have been slashing prices by up to 30% in an effort to attract buyers.

‘I think house prices will fall by another 10 to 15% by the end of the year,’ said Yang Shaofeng, the general manager of the Beijing Lianda Sifang Real Estate Co and the author of one of China’s most widely-read property blogs.

‘Since 2006 a lot of money has gone into the housing market and the stock market, and that’s created a bubble. Now, the bubble is bursting.’

Read the full, detailed, depressing and biased report HERE.
Source: Daily Telegraph

Yes, they are sinking: but only a little bit

Shanghai is among the world’s most vulnerable urban areas to a rise in sea levels as global warming melts polar ice.

Wang Pingxian, a member of the prestigious China Academy of Sciences and professor of ocean geology at Tongji University in Shanghai said, ‘Shanghai came from the ocean, and has been facing the threat of rising sea levels.’

The dyke along Shanghai’s riverfront Bund, which protects a mile of historic granite buildings from the waters of the Huangpu River, has been raised three times — by nearly 2 meters (about 7 feet) — over the past four decades.

The city sank 1.76 meters between 1921 and 1965, or an average of about 4 centimeters a year.

But while the city moves to stop the ground from being pulled down as ground water is sucked out, researchers now worry that the ground is being pushed down as masses of skyscrapers are plopped down across the urban landscape.

The developer of the 492-meter (1,614-ft) Shanghai World Financial Center, which at its opening in late August surpassed the neighboring Jin Mao Tower as China’s tallest building, said it was not contributing to the land subsidence problem.

‘Our building is not causing land to sink,’ said Michiho Kishi, a spokesman for Mori Building.

So that’s alright then Probably makes you feel a lot better.
Source: Reuters