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November 24, 2009

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Domestic firms seal most real estate deals

MAJOR real estate investment deals in Shanghai have touched 20.8 billion yuan (US$3.04 billion) so far this year, with more than 80 percent of them involving domestic investors, DTZ, a property services company, said yesterday.

The amount has already surpassed the 18 billion yuan registered for the whole of 2008. Deals of more than US$10 million each are defined as major transactions by the company.

"The local real estate investment market started to rebound in the second quarter of this year, buoyed by the country's improving economy as well as abundant liquidity," said Jim Yip, director and co-head of investment at DTZ China. "Notably, domestic companies have replaced overseas players as major investors in the local market, taking a dominant share of 83 percent in terms of capital involvement," Yip pointed out.

Banks in China issued a record 8.7 trillion yuan of new yuan-backed credit in the first nine months of this year, an increase of 5.19 trillion yuan from the same period a year ago, according to earlier government data.

Transactions involving office buildings were the most popular among investors as they accounted for about 80 percent of the deals, followed by residential properties with 14 percent and retail developments with 6 percent, according to DTZ research.

Yip also forecast the local property investment market to stay active through the first quarter of next year and for overseas investors to set up local-currency funds with domestic enterprises to either buy properties directly or purchase shares in real estate companies.


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