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Big property investment deals reach 6-year high
By Cao Qian |
December 21, 2011, Wednesday
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Print Edition
Print Edition
MAJOR real estate investment deals in Shanghai this year rose to the highest in six years, with office buildings remaining the most favored property transaction, an international real estate services provider said yesterday.
Deals involving major real estate acquisitions worth more than US$10 million each jumped 50 percent from 2010 to 35 billion yuan (US$5.5 billion) this year, the most since 2006, according to DTZ.
"We've witnessed an extremely robust momentum among real estate investors in Shanghai this year with the return in interest from domestic buyers," said Jim Yip, co-head of DTZ China Investment. "Notably, investment in residential properties plunged amid government restraint policies aimed at curbing speculation while offices continued to be the most sought-after type due to their stable increase in both rentals and capital values."
Domestic buyers were involved in major real estate acquisitions totaling 19.1 billion yuan this year in Shanghai, an annual jump of 118 percent. Overseas investors took the remaining 16 billion yuan, an annual growth of 10 percent.
In 2010, 57 percent of en bloc deals were secured by overseas investors.
Across all real estate types, office buildings took the lion's share of 78 percent, up from 37 percent in 2010. Comparatively, residential properties accounted for 4 percent of the city's total property deals this year, a plunge from 31 percent in 2010.
DTZ forecast that yuan-denominated funds and insurers will likely play a more active role in the city's real estate investment market in 2012 but the overall transaction value may drop due to difficulties in getting financing from commercial banks for en bloc property deals.
Deals involving major real estate acquisitions worth more than US$10 million each jumped 50 percent from 2010 to 35 billion yuan (US$5.5 billion) this year, the most since 2006, according to DTZ.
"We've witnessed an extremely robust momentum among real estate investors in Shanghai this year with the return in interest from domestic buyers," said Jim Yip, co-head of DTZ China Investment. "Notably, investment in residential properties plunged amid government restraint policies aimed at curbing speculation while offices continued to be the most sought-after type due to their stable increase in both rentals and capital values."
Domestic buyers were involved in major real estate acquisitions totaling 19.1 billion yuan this year in Shanghai, an annual jump of 118 percent. Overseas investors took the remaining 16 billion yuan, an annual growth of 10 percent.
In 2010, 57 percent of en bloc deals were secured by overseas investors.
Across all real estate types, office buildings took the lion's share of 78 percent, up from 37 percent in 2010. Comparatively, residential properties accounted for 4 percent of the city's total property deals this year, a plunge from 31 percent in 2010.
DTZ forecast that yuan-denominated funds and insurers will likely play a more active role in the city's real estate investment market in 2012 but the overall transaction value may drop due to difficulties in getting financing from commercial banks for en bloc property deals.
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