China real estate

The China Insurance Regulatory Commission has said that China’s insurance companies are soon to be allowed to invest in the domestic real estate sector.

Wu Dingfu, Chairman of the China Insurance Regulatory Commission, quoted in the state media, said the draft of the revised insurance law allows insurance companies to invest in ‘bonds, stocks, funds and real estate.’

Currently, insurers have to set up a separate investment arm to channel money to some of these markets and this new ruling may bring more investment into the top end of the property market.

Ping An Insurance put RMB4 billion in the property market last year through its investment firm Ping An Trust & Investment.

Several Chinese banks have been approved to invest in the insurance market and set up joint ventures with insurers.

The end result is that as China becomes more lenient in its policies to keep banking and insurance markets separate, the financial industries become more intertwined.
Source: China Business News

World Union Real Estate Consultancy, a Shenzhen-based real estate consultancy and brokerage service provider, is about to make a ground-breaking IPO.

The China Securities Regulatory Commission has approved World Union’s IPO application, allowing the company to list shares on the Shenzhen Stock Exchange.

Wang Jia, an Industrial Securities analyst said, ‘It is probably the country’s first property consultancy and brokerage firm to float A shares on a domestic bourse.’

Proceeds from the sale will be used to extend the company’s network, establish an integrated service management platform, train staff and increase its national brand awareness, an effort expected to cost RMB319 million ($46.5 million).

Established in 1992, World Union runs 23 branches across the country, expanding its operation primarily by forming strategic alliances with large real estate developers such as Vanke and Gemdale.
Source: Shanghai Daily

Kardan has won an auction with a local partner to acquire land with construction rights of about 109,000 square meters in the city of Hangzhou in China.

Kardan will pay $62 million for the 10,400 square meters of land together with partners.

Of the partners Geely Group will hold 40% of the project.

Kardan’s subsidiary GTC Real Estate China will hold 50% of the project and a third party will hold 10%.

Total construction costs of the residential, retail and office development will amount to $241 million, including the price paid for the land.

Construction is expected to start in 2009 and will take about three years.
Source: Interactive Investor

China´s Ministry of Commerce has authorized provincial commerce administration departments to examine and approve foreign company investment in real estate.

The commercial departments will be asked to take charge of the approval process for foreign investments in the property industry, and lower-level commerce departments are now authorized to examine material filed by foreign investors.

The adjustment aims to simplify examination procedures and improve efficiency whilst strengthening the verification process.

The Ministry of Commerce will carry out spot checks periodically on foreign-funded enterprises with investments in real estate.

Enterprises that fail to meet relevant requirements will have their forex registration and foreign capital inflow filings annulled by the Ministry of Commerce and foreign exchange administrative departments.
Source: Property Report Asia

The Economic Observer, the Chinese language newspaper in Beijing, reports the government is likely to take measures to ease property developers’ funding difficulties caused by loan curbs and falling sales. The source for this is not identified.

The Chinese-language newspaper said the People’s Bank of China, the Ministry of Housing and Urban-Rural Development and other ministries held consultations on stabilizing the property market.

The newspaper, citing a National Development and Reform Commission report, said a decline in property prices will erode demand and disrupt economic growth.

The NDRC report said, according to the newspaper, that housing sales in China dipped 0.4% from a year earlier to 136.6 million square meters in the first four months.
Source: Shanghai Daily