Presentation on theme: "Property Market MAINLAND CHINA. Beijing and Shanghai."— Presentation transcript:
Property Market MAINLAND CHINA
Beijing and Shanghai
PPSPPS No Single Market A series of markets within a market – primary, secondary and tertiary cities Limited quality product Absence of a secondary market Lack of transparency and consistency Real efforts being made to wipe out corruption and speculation at official level Still an emerging market
PPSPPS No Single Market (continued) Government tightening controls over land market – vast amounts of agricultural land already lost illegally to development Growing foreign investor influence Mainland China looks very much to Hong Kong and other international centres as examples for future policies
PPSPPS Housing Provision Over 40% of population live in urban areas – some 550 million people Average living space increased from 4 sq.m. in early 1980’s to 22 sq. m. today Housing reform in 1998 – move away from traditional allocation as part of employment to open market as main channel of provision Commercial housing growth since 1998 averaged 35% per annum Estimated 82% of allocated public housing has already been sold to workers/employees
PPSPPS Structure of the Housing Market Each city operates as a separate market Commercial commodity housing – merged foreign and local markets Issue of affordability Price to household income ratio times Subsidised affordable housing – flagrant breaches of terms of sale Public rental housing – rents controlled, 400:1 price to rent ratio
A. $4,000 F. $2,400 D. $2,800 E. $2,600 C. $2,800 B. $3,500 P. $300 J. $1,000 H. $2,000 G. $2,200 I. $2,400 M. $400 N. $400 L. $500 Q. $600 R. $700 O. $800 * Unit rate expressed in HK$ per square foot (gross floor area) K. $500
Mainland China – Private Housing
Mainland China – Government Housing
PPSPPS Office Market Major centres are Beijing and Shanghai but Guangzhou and other secondary cities (Tianjin, Suzhou, Hangzhou) also provide Grade A office accommodation Available for lease or strata title purchase Rents range from US$35 psm per month in Shanghai to US$7 psm per month in lesser cities
LG Tower, Beijing
PPSPPS Retail Market Very active market currently Several projects underway of 1m sq. metres GFA and above Frequently sold on strata title basis but market learning that this is not satisfactory in the longer term International brand tenants in major centres in Beijing, Shanghai, Guangzhou, Shenzhen, etc.
Fortune Plaza, Beijing
PPSPPS Market Prices and Yields Residential 1. Luxury US$1,500 per sq.m. 2. MassUS$750 per sq.m. Yield 8-9% Office (Grade A)US$2,500 per sq.m. Yield8-9%
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