Foreign Investments in Chinese Real Estate Industry Are Expected to Increase in 2009

    www. shcri. com – China totally finished 1. 0165-trillion-Yuan (148. 4 billion USD) investments in the real estate industry during January to May, increased by 6. 8% YOY and the growth rate up by 1. 9percentage points compared with that in January and April; the sales areas of the commercial buildings were increased by 25. 5% to 246. 44 million m2.   However, among the fund sources of Chinese real estate development enterprises, the statistics showed that the foreign funds reached 22. 5 billion Yuan, down by 8. 7% YOY.   The shrink of the scales of foreign investments has been a difficult problem which needs cautious considering. On 31st May, the statistics released by Ministry of Commerce of PRC showed that there were totally 6,241 newly-established foreign funded enterprises all over China during January to April; the actual utilized foreign funds reached 27. 67 billion USD, down by 34. 2% and 21% YOY respectively.   To stabilize the scales of the foreign funds becomes the guidance of Ministry of Commerce this year. It is reported that Ministry of Commerce of PRC has started the investigations into the situation of foreign investments in various regions of China from February 2009, engaged in the policy formulation and smoothened in certain areas so as to attract and stabilize the foreign investments and form a steady policy recommendations for stabilizing the foreign investments so as to summit to the state council of PRC.   Some insiders said that the supervision departments had revealed the idea of loosening the foreign investments owning to the weak growth of the investment growth in Chinese real estate industry from 2008. There is no exception for State Administration of Foreign Exchange. Since May 2009, State Administration of Foreign Exchange has issued a series of measures related to the examination and approval authority and simple procedures. In the beginning of June, State Administration of Foreign Exchange issued the latest measure, which required all the branches of State Administration of Foreign Exchange, management departments and the designated foreign exchange banks search the lists of the approved foreign funded real estate enterprises through the website of Ministry of Commerce and handle the foreign exchange registration and foreign exchange settlement and sales. The actual affects can not be seen now but it is the confidence inspiration for the foreign funded enterprises.   At almost the same time, ING Real Estate, the affiliated company of ING Groep N. V. which was the financial giant, announced it was engaging in raising the second funds for the real estate industry in China. Richardvanden Berg, person in charge of the business in China of ING Real Estate, expressed the target scale of the funds was 750 million USD and mainly for the dwellings and real estate.   ING Real Estate Fund Organization revealed it will invest in the items of the residential dwellings in Chinese first and secondary cities and catch up some merger opportunities in the first cities. It is predicted that the benefits from the secondary real estate funds may reach over 20%.   Affected by the international financial crisis, the foreign funds have started the role variation in Chinese real estate stage. Citi Bank, Lehman Brothers and Merilyn Securities have thrown the real estate on hand to the market in droves.   Some withdraw from the market, however, some plan and prepare to step into the market. The relevant person in charge of 3-billion-USD funds of LaSalle Investment said that the global real estate investors all aimed at the non-promising Asian real estate market from 2008 and hoped to find the hunter opportunity under the circumstances of the global economic recession. Capitaland set up 1. 3 billion USD private capital funds for investing in Chinese commercial real estate industry. The Carlyle Group announced before that it was raising 1 billion USD so as to set up the second real estate fund in Asia directed against the crucial Asian market, such as China and Japan. ARA also expressed that it will invest near 10 billion Yuan (1. 46 billion USD) in Chinese real estate market this year.   Source: China Research and Intelligence If you’d like to copy or quote this article, please keep the source information   Get more information, please visit http://shcri. com/reportdetail. asp?id=271

    Eileen GuChina Research and Intelligencewww. shcri. comEmail: eileen@shcri. comTEL: 86-21-6852-1029 86-21-5842-6733Shanghai, China

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