China Property Press Digest 2 March 2009

Guangzhou builder bullish (The Standard, March 2) Guangzhou R&F Properties recorded satisfactory sales figures last month, prompting its chairman to express confidence in rising housing demand in the mainland. The Guangzhou property giant announced its turnover of contracted sales in February surged 135 percent to about 2.35 billion yuan, while its gross floor area sold soared 163 percent to 261,000 sq.m, compared to the same period in 2008.

   

CapitaLand eyes more investment opportunities in China (Channelnewsasia, February 27) Singapore's property giant CapitaLand is busy looking at investment opportunities in key markets like China, as part of a strategy to weather the current economic downturn. The developer has been successful in developing projects in Shanghai and Beijing, and is now looking into second-tier cities on the Chinese mainland.

Yanlord '08 earnings up; Q4 profit dives (The Business Times, February 27) Despite a plunge in fourth-quarter revenue and net profit, Chinese developer Yanlord Land defied the weak market sentiment to post a 2 per cent rise in net profit to $225.8 million for the full year ended Dec 31, 2008. This was thanks to higher fair-value gains on investment properties and higher selling prices for its residential projects. Revenue for the full year slipped 18 per cent to $1.01 billion as the total gross floor area delivered fell 40.6 per cent to 285,926 sq.m.

   

Chinese Estates to report first loss in 6 years (SCMP, February 26) Chinese Estates Holdings expects to report a loss for last year, its first red ink since 2002 amid a bruising downturn in the mainland and Hong Kong property markets. The mid-tier developer said the market downturn would result in unrealised valuation losses for its investment properties, which would be recognised in the income statement. Although it did not specify the size of the loss, the news sent the stock down 7.85 per cent when it resumed trading yesterday afternoon.

Land auction sales decline 53pc (SCMP, February 26) The amount of land sold at government auctions in 60 major mainland cities plunged 53 per cent last month from a year ago as cash-hungry developers became more cautious and put the brakes on acquisitions.

   

Realty firms may see revenue loss (China Daily, February 26) The latest figures from 12 listed real estate companies reveal a sharp drop in income from property presales during 2008, indicating a further earnings decline this year. The 2008 results of 12 real estate companies showed that aggregate advances from customers was 16.5 billion yuan, down 27.31 percent from 2007.

China property recovery not expected till H2 (The Business Times, February 26) China's real estate developers do not expect the property market to recover until at least the second half of this year, as prices need to fall further before attracting more buyers, according to Goldman Sachs. Home prices in China fell 0.9 per cent in January, the second consecutive monthly decline and the longest losing streak since the government started issuing the data in August 2005. Property prices more than quadrupled in the five years through 2007 as urban incomes rose.

       

Foreign investors shift focus to retail segment (SCMP, February 24) Foreign investment interest in the mainland property market is on the rise, but investors have shifted their focus from development sites to retail property because of the uncertain market outlook. Foreign investment funds are showing renewed interest in buying property on the mainland but the major hurdle remains the credit conditions imposed by lenders.

 

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	YANGTZE RIVER DELTA & E. CHINA

Shanghai property sales surge in February (China Daily, March 2) A total of 787,600 sq m of property changed hands in Shanghai in February, up 129 percent from a year earlier. The February 2009 figure was down 2.43 percent, however, compared with February 2007 when the property market was at its peak. The average sales price stood at 12,141 yuan per sq m, down 13.94 percent month-on-month.

     

Carlyle: Sold Some Of 110 Shanghai Villas But Not At A Loss (WSJ, March 2) Carlyle Group has sold some of the 110 villas it owns in a Shanghai suburb, but denied they were sold at a loss. The company is pleased with their holding in the Shanghai villas, with the majority of them for long-term investment. Chinese-language daily China Business News cited an unnamed source as saying Carlyle is selling 110 villas at a potential loss because of a lack of appreciation in the properties' value.

Makeover for major department store (Shanghai Daily, February 27) The Isetan Department Store in the Westgate Mall on Nanjing Road W is being renovated and will reopen fully by the Spring Festival next year. Isetan takes up a third of the Westgate Mall complex - the rest includes restaurants, cinemas and some major international brand stores. Isetan, which spreads over seven floors, closed its seventh floor section, which sold household items, last Friday. The other shopping floors are still open but will be closed as the renovations proceed.

   
     

R&D Hub For Homemade Jets (Shanghai Daily, February 27) The research and development centre of the Commercial Aircraft Corp of China has been founded in Zhangjiang High-tech Park in Shanghai's Pudong New Area. Construction of the centre, covering 500,000 sq.m, will start in July and it will be put into operations in 2012.

Dining choices (Shanghai Daily, February 26) Shanghai has more than 40,000 restaurants with a total market size of 50 billion yuan annually. In the fourth quarter, some restaurants' revenue dropped by half year on year amid the tough environment.

       

First Doubletree By Hilton In Eastern China Opens (CHN, February 25) Hilton Hotels Corporation has announced the opening of Doubletree by Hilton Huaqiao, Kunshan–the first Doubletree by Hilton branded hotel in East China. The newly built, 398-room hotel is located in the hotel is located between Shanghai and Suzhou–regarded as two of China's top five economies.

Another Japanese store eyes Shanghai (Shanghai Daily, February 25) Japanese department store giant Takashimaya plans to spend 4 billion yen (US$42.3 million) to launch its first store on China's mainland in Shanghai in 2012. The new store will cover a retail space of 40,000 sq.m in an eight-floor complex and will provide a wide range of products from food to luxury clothing. The outlet, being built by local property developer China Enterprise, will be located in an affluent residential area in Gubei area.

       

Spring in Shanghai's step after dark winter (SCMP, February 24) Developers are hoping the warm spring weather being enjoyed in Shanghai will revive property prices. They are also pinning hopes on more government stimulus measures coming out of next month's top policy-setting meeting. But an overhang of about 1 million sq.m of new flats in the pipeline in the city would keep prices under downward pressure, irrespective of decisions taken at the forthcoming meetings of the National People's Congress and Chinese People's Political Consultative Conference.

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PEARL RIVER DELTA & S. CHINA

Sanya sets sights on well-heeled tourists (China Daily, March 2) With long stretches of pristine sandy beaches and year-round sunshine, Sanya, the tropical beach resort in China's Hainan Island, is now striving to become a luxury travel destination of international appeal to rival Bali and Phuket. This year, China's southernmost city is set to step up building its luxury tourism sector, which includes the construction of an international cruise terminal, yachting marinas and five-star hotels. Last year, three top international resort brands, Ritz-Carlton, Singapore-listed Banyan Tree and Mandarin Oriental, all opened for business in the city.

       

New finance center growing in Futian CBD (Shenzhen Daily, March 2) Two more high-rise buildings belonging to finance firms have broken ground at the central business district in Shenzhen’s Futian District, which is to be developed into the city’s new finance centre. China Merchants Securities Building and Sinosafe General Insurance Headquarters Building are among the second wave of projects approved by the city government to bolster the finance industry.

Xiamen gives support on a plan to build Thai Business Centre (What’s on Xiamen, February 28) A ‘Thai Business Centre’ will be built at Fang Hu industrial area within Xiamen Island. The centre will be renovated from an old factory building of Xiamen Day Bright Food Co. The ‘Thai Business Centre’ will cover a total land area of 9,735 sq.m and the overall built up floor area will be about 18,000 sq.m.  The Centre will house Thailand's Bangkok Bank, Thai Airways, Thailand Travel and other agencies, coffee shops with original taste and flavour from Thailand, and a separate pavilion displaying high-end products from Thailand.

 

Construction of Chigang Consular District starts (NewsGD, February 26) Construction of Chigang Consular District in Guangzhou starts officially on Feb 26 with the groundbreaking Ceremony of Diplomatic Service and Administration Building and Handover of Land for the Construction of Royal Thai Consulate-General in Guangzhou. Currently six countries have applied for building permanent premises in Chigang. Thailand is the first country to start Consular premises construction here.

   

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	BOHAI REGION & NE CHINA

Indonesia Ciputra Group will invest US$3 billion in Shenyang (Shengyang Government, March 2) Shenyang Shenbei New District has signed an investment agreement with Indonesia Ciputra Group. Ciputra will invest US$3 billion to develop a complex of 3.13 million sq.m. The project will consist of a shopping center, hotel, sports themed park, cinema, and residential buildings. The project will begin construction in this year and is expected to be completed in 3 to 5 years.

  

Beijing’s first residential land transaction of 2009 achieves accommodation value of RMB13250 per sq.m. (Hexun, March 2) Beijing’s first residential land transaction of 2009 was purchased by Beijing Huarong Infrastructure Investment for RMB212 million on February 26. The plot is on Deshengmen, inside the North 2nd Ring Road, Xicheng District, with a total GFA of 16,000 sq.m. The accommodation value of the plot was RMB13,250 per sq.m. According to the requirement of the government, 2,300 sq.m. of low-rent housing needs to be constructed on the plot besides the commercial housing, which will be re-purchased by the government for RMB5,000 per sq.m.

 

Star River Property acquires land property in Shanxi (China Knowledge, March 2) Star River Property Holding Ltd, headquartered in Guangzhou, has purchased a piece of undeveloped land for RMB1.3 billion in Taiyuan, Shanxi Province. The mixed-use property will cover an area of 679,893 sq.m. In addition to the project in Taiyuan, Star River Property plans to develop five other real estate projects in Shanghai, Beijing and Guangzhou, Guangdong Province.

Guancheng Datong sells properties through CITIC Trust for RMB2 billion (Hexun.com, February 25) Guancheng Datong has sold 8 residential blocks and 1 office building of Zone B, Sun Palace, through its JV partner, CITIC Trust, to an appointed third party. The transaction involves 165,900 sq.m. of residential and 51,500 sq.m. of office. The buyer has not been disclosed to date.

 

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WESTERN CHINA

RHI to launch hotels in Chengdu (China Knowledge, February 16) Regal Hotels International has signed a 10-year hotel management contract with Sichuan Master Investment Group for its first hotel in Chengdu, which will open for guests in September this year. Regal Master Hotel, which will be located on South Renmin Road, is 32 stories tall and has a floor area of 45,600 sq.m. It is part of a residential-commercial-hotel complex developed by Sichuan Master Investment.