Investors move away from major city deals
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Major real estate acquisition deals dipped 3.6 percent to 76.8 billion yuan (US$11.2 billion) in China last year from 2008 with the country's vast hinterland gaining increasing interest from investors, property services provider Savills China said Tuesday.
Close to three quarters of the deals, involving a total of US$8.3 billion, were concluded in the second half of last year when investment activity started to pick up as the economy recovered and there was rising interest from domestic buyers.
About 70 percent of en-bloc deals settled last year involved properties in Shanghai, Beijing, Guangzhou and Shenzhen, compared with 79 percent registered in 2008, as investors penetrated further into the nation's huge but less developed hinterland.
"For this year, we expect domestic companies to play a more important role in the country's en-bloc property investment market, particularly insurance companies as well as private and institutional investors," said Albert Lau, managing director of Savills Shanghai.
In Shanghai, for example, en-bloc real estate acquisition deals rose 42 percent to 25.6 billion yuan last year with office buildings taking nearly four-fifths of total transactions and domestic buyers representing 88 percent of the transacted value, property services provider Jones Lang LaSalle said earlier this year.
China is now the largest real estate investment market in the world, with the United Kingdom the next most dynamic recovery market and the United States in third place, Cushman & Wakefield, which monitored investment flows in commercial property in 56 countries in 2009, said in a press release last week.
In 2009, global investment volume fell 23 percent to US$365 billion, the lowest since 2003. It is forecast to rise 30 percent this year.
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