Foreign desire for China property to stay-analyst http://today.reuters.com/stocks/QuoteCompanyNewsArticle.aspx?view=CN&storyID=2006-07-12T110541Z_01_SHA271547_RTRIDST_0_PROPERTY-CHINA-FOREIGN.XML&rpc=66
Wed Jul 12, 2006
SHANGHAI, July 12 (Reuters) - China's efforts to cool its red-hot real estate sector and its expected steps to restrict purchases by foreigners are not dampening outside interest in the market, Jones Lang LaSalle (JLL.N: Quote, Profile, Research) said on Wednesday.
Global investors such as Morgan Stanley (MS.N: Quote, Profile, Research) and Citigroup (C.N: Quote, Profile, Research) snapped up a total of $3.56 billion worth of property in China last year, Michael Hart, Shanghai-based associate director of the real estate services firm, told Reuters.
"Interest in premium properties remains strong and they (foreign investors) could spend 1.5 to two times as much this year," Hart said. His forecast was unchanged from an initial prediction made in January, even though Beijing has since then adopted a series of tax measures and regulatory changes to try to cool the property sector. It has had only limited success.
In addition, state media reported last month that Beijing would soon restrict foreign investment in property to reduce speculation. It may tighten registration requirements, limit foreigners to buying only one or two homes for their own use, and forbid them from selling within a certain period, the media reports said.
However, Hart said it was too early to speculate on Beijing's likely policies, and that so far, foreign investors had not changed their plans. Most new foreign investment in property will go to Beijing, Shanghai and other big cities, which have an ample number of premium properties, he added.
Global property investors increasingly see China as a top pick in Asia after Japan, as the potential for profit more than compensates for regulatory uncertainties, industry executives and analysts say.
Citigroup Property Investor, which has invested about $50 million in China, Hong Kong and Taiwan since 2004, plans to spend at least 10 times as much in the area over the next three years, Stephen Coyle, its managing director, told Reuters in June.
"We continue to get investors approaching us, and we are expecting several deals," Hart said.
© Reuters 2006. All Rights Reserved.