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

Property in China

China Information News, citing the National Bureau of Statistics, said, national property investment totaled RMB2.39 trillion ($349.75 billion) during the January-October period, up 24.6% year-on-year, while the growth rate was 1.9 percentage points lower than the first three quarters.

Investment for commercial residential housing amounted to RMB1.75 billion, up 27.4% year-on-year and accounted for 73.1% of the total property investment. Yet the growth rate was 1.3 percentage points lower than that by the end of October.

Some 2.48 billion square meters of housing was under construction
during this period, up 18.7% from the same period last
year. Property developers purchased 300 million square meters of
land nationwide, down 5.6% year-on-year and completed construction on 190 million square meters, down 2.5% year-on-year.

More HERE.
Source: China Daily

China real estate exhibition

The government has announced a reduction in required down payments and a waiver on stamp taxes for property deals. But most enabling regulations and full details have yet to be released.

For those buying their first home, the minimum down payment was cut to 20% from 30%, and banks were allowed to charge as little as 70% of the central bank base lending rates for such mortgages.

The central government gave commercial banks freedom to decide their own mortgage rates, ranging from 5.04% to 7.2%. But among the four major commercial banks, Agricultural Bank of China was the only one that had published its lending rate as of Monday.

Chinese banks are mostly state-owned commercial banks, which have been less affected by the global financial crisis. Most lent cautiously to the more credit-worthy borrowers.

Analysts said banks were struggling to keep a balance between attracting borrowers and maintaining profit margins.

Guo Tianyong, a banking expert at the China Central Finance and Economics University, said, ‘As mortgage lending is shrinking, each commercial bank is waiting for others to announce the rates first, so they can try to compete with an even lower rate. Banks and buyers may need to wait for a long time.’

Beijing authorities, and those in other cities, said they needed more time to figure out who could get tax breaks and wouldn’t have a plan ready to announce until the end of this year.
More HERE.
Source: China View

Shenzhen skyline

Although most of the news on the property front is downbeat it is possible to see both the rapid expansion of the past and the rapid expansion of the future.

Despite current problems with dynamic economies based on industry, service, shipping and logistics, Shenzhen and Guangzhou are China’s fastest-changing cities.

Ten years ago, the Minnan Hotel dominated the skyline in Xiamen, a special economic zone on the Taiwan Strait. At 550 feet tall — about the size of the skyscrapers that abut New York’s Central Park — it was a conspicuous outlier in a developing city.

Now, it’s beginning to look like a tree in a forest, as buildings just as tall have popped up across the waterfront and in the city center.

But development in Xiamen hasn’t been nearly as rapid as in Shenzhen or Guangzhou, two cities on the Pearl River Delta. With dynamic economies based on industry, service, shipping and logistics, they are China’s fastest-changing cities.

Hong Kong, Shanghai and Beijing round out the top five. They’re followed by Dalian and Nanjing, two cities that have emerged as factory-based growth centers, but are also turning into vibrant markets for consumer goods.

These rankings are based on three measures:

Economic growth using indexed data from the Chinese Academy of Social Sciences (CASS), a state research agency. (Smaller industrial boomtowns like Hefei and Suzhou scored particularly well by this measure.)
The growth of each city as a market.
The cities’ skylines. The government that didn’t officially use the word ‘urbanization’ until the late ’90s. Skyscrapers and cranes may be the best marker of globalization’s effect on China. Each city was ranked by the aggregate height of its skyline.

More HERE.
Source: Financial Post

Pan Shiyi

Property firm SOHO China has said its investment in property next year will top the RMB8.8 billion ($1.29 billion) it will spend in 2008, as slumping prices provide buying opportunities.

Beijing was worried about a real estate bubble only a year ago when it clamped down on speculative buying. It reversed direction in October with cuts in property transaction taxes, mortgage rates and down payments.

SOHO China has built a RMB10 billion cash stockpile and a low debt/equity ratio of 27%, giving Chairman Pan Shiyi and his wife Zhang Xin, who is also his business partner, the room to take on more debt to make further purchases.

Zhang Xin

Pan said, ‘When things hit bottom, and we think next year it will, we have to be busy buying property. This is a great opportunity to expand. This is a fall in prices that no one could have dreamed about.’

SOHO is looking to expand beyond its almost exclusive focus on the Beijing market, aiming to include Shanghai in its portfolio.

Pan Shiyi said, ‘The demand in Beijing and Shanghai is better than other cities. We are looking at the best areas of those two cities.’

Pan Shiyi  said SOHO would reverse the RMB145.8 million net loss in the first half of this year to post a profit for all of 2008, adding the company has already booked a substantial portion of pre-sold units. He siad, ‘China has money, people and a big market. How can you not be optimistic?’
Source: Guardian.co.uk