Asia Property Market Update Issue 107 | March 2010 Asia Property Market Update | March 2010 A monthly e-newsletter bringing you the latest information from major markets in the region
Bangkok Incentives' end could boost big developers The government's property tax incentives are due to expire on 26 March this year and the cabinet has decided there will be no extension. The market share of the top eight developers rose to 49% last year from 34% in 2008. The current policy aims to stimulate the domestic property market by cutting the special business tax from 3.3% to 0.1% and transfer and mortgage fees to 0.01%. The scheme was extended last year after being launched in 2008. The number of residential units launched last year was 57,604, down from 67,791 units in 2008. The number of units sold dropped to 59,085 last year, down from 65,653 in 2008. Buyer sentiment in the first two months of this year has picked up.
Shaking off the blues in Phuket After a miserable economic year globally, Phuket shook off the blues with the launch of Andara Resort & Residences over the Chinese New Year weekend, drawing glitterati from all corners of the world that enjoyed a spectacular party complete with dancers, fire-eaters and fireworks. While the majority of Andara's buyers are from Hong Kong, others come from various parts of the world including the UK, Russia, Scandinavia and Taiwan. Although the price tags of a luxurious project like Andara would astound the average Thai, with an apartment starting at 27 million baht and a villa at 150 million baht, they are low by Hong Kong standards. It is likely that mainland Chinese will eventually also start coming to Phuket and turn it into a strong buyers' market.
Contact | Mr HENG Hua-thong Phone | +662 257 0499 E-mail | [email protected]
Beijing Beijing announces 11 new housing policies and takes out expired preferential ones On 21 February 2010, Beijing Municipal Commission of Housing and Urban-Rural Development released the “Opinions on the implementation of real estate market policies to ensure healthy and stable development”. With the aim of ensuring healthy real estate market development, the five core opinions mentioned include constructing more guaranteed housing, increasing land supply for ordinary commodity housing, terminating the expired preferential policies, enhancing the management of commodity house sales and monitoring real estate market and law enforcement procedures. In line with the modified control policies set by the central government, the supply of new homes in January 2010 was up compared to a month ago, while speculative purchase and housing prices started to slow down.
Beijing sells seven land sites for RMB9 billion at the first auction in the year of the Tiger On 24 February 2010, Beijing sold seven out of nine plots for RMB9.01 billion. The most attractive plot was the one located in Changying Village, Chaoyang District, with an initial bidding price of RMB1.7 billion. On the first round of the land auction, Beijing Tongrui Wanhua Property Ltd, a subsidiary of Longfor Properties, purchased the plot for RMB4.54 billion. This was the first time that did not involve the bid assessment committee but sold the land to the highest bidder.
Contact | Mr Edmund H K HO Phone | +86 10 6510 1388 E-mail | [email protected]
Chengdu Chengdu Metro to support home prices The construction of the Chengdu Metro Line 1 is in full steam according to media reports. Line 1, which will become Chengdu’s first metro line, will open to the public for a trial run on 1 October 2010. It is thought that the metro will fundamentally change the residential map of Chengdu, with projects connected to the
- 1 - This publication represents only a brief summary of information received from many outside sources and no guarantee can therefore be given by DTZ or any of its employees as to its accuracy. Please refer to original source or seek more detailed advice from the firm before relying on any statements made.
Asia Property Market Update | March 2010
metro expected to enjoy stable development in prices, despite uncertainties in the Mainland residential market.
Contact | Mr David P Y CHO Phone | +86 28 8665 3048 E-mail | [email protected]
Chongqing Chongqing listed as one of the five major cities in China for first time Chongqing’s Management for Construction Planning and Civil Defense conference was held on 4 February 2010. According to the “National Urban System Plan” published by the Ministry of Housing and Urban-Rural Development of the People’s Republic of China, it was announced at the conference that Chongqing is listed as one of the five major cities in mainland China for first time. These cities must be the development lead, create major positive impacts on the region and facilitate the full spectrum of development of its surrounding areas, from political and economic areas to cultural aspects. Chongqing will become the major support for the development of Western China and the economic zone of the Yangtze River. Being listed as one of the major cities means that Chongqing will also become a National First Class transportation hub.
Contact | Mr David P Y CHO Phone | +86 28 8665 3048 E-mail | [email protected]
Dalian Zhuanghe Dadong Lake contract worth RMB3.5 billion Liaoning Province Zhuanghe City Planning Authority signed a contract with Dalian Sanlin Group to co-develop the project of Zhuanghe Dadong Lake. The project will become the largest infrastructure construction project in North-east China, located in the Nancheng District in Zhuanghe, totalling RMB3.5 billion. It is planned to build a multi-complex leisure district with entertainment, resort and commercial residential elements at the intersection of three rivers: Reshui River, Zhuanghe River and Baome River. The project leads Zhuanghe city to develop into a modern city that can accommodate upon completion one million people.
Contact | Ms Betty X ZHAO Phone | +86 411 8886 5288 E-mail | [email protected]
Guangzhou Changes in tax payment for industrial land The Guangzhou tax authority has announced a new classification system for industrial land tax payment, with the effect traced back to 1 January 2009. Previously, industrial land plots were classified into six categories according to their use, as stated on the land rights certificate. Each category comes with an annual tax payment ranging from RMB3 to RMB27 per sq m of the plot. The new system would have only five categories and the tax would range from RMB3 to RMB15 per sq m. Those who paid more tax in 2009 before the measure came into effect will be allowed to apply for a refund or use the refund as part of the new tax payment in the future.
Tentative guidelines on resident consultation in renewal areas The Guangzhou government recently revealed a set of tentative guidelines on how to carry out consultation work with residents before developers can begin the revamping and renewal process in that area. According to the guidelines, developers must carry out two rounds of consultation among residents, explaining to them every detail of the relocation and compensation in a timely, comprehensive and active - 2 - This publication represents only a brief summary of information received from many outside sources and no guarantee can therefore be given by DTZ or any of its employees as to its accuracy. Please refer to original source or seek more detailed advice from the firm before relying on any statements made.
Asia Property Market Update | March 2010
manner, and respect the residents' rights to know and participate in full in the consultation and relocation. The guidelines state that developers must obtain approval to revamp from at least 90% of the residents of one area in order to start the process and must complete registration accordingly.
Contact | Mr Spencer Y S PANG Phone | +86 20 3877 0878 E-mail | [email protected]
Hangzhou China Railway Construction purchase two residential plots in Gongshu District The state-owned enterprise, China Railway Construction Corporation Ltd (CRCC), purchased two residential plots in Hangzhou for RMB2.806 billion on the first land auction of 2010. Located in Hangzhou Qiche Fadongji Zhucao Chejian, Gongshu District, the two plots occupy a total site area of 148.4 mu and are adjacent to Binjiang Wanjaxing Town. After 13 rounds of bidding, CRCC purchased the first plot for RMB1.65 billion with a floor price of RMB11,685 per sq m. At the same time, the company also purchased the No. 2 plot for RMB1.156 billion with a floor price of RMB8,854 per sq m.
Contact | Mr George T YEUNG Phone | +86 571 8577 9946 E-mail | [email protected]
Hong Kong Government site sold for HKD3.37 billion On 22 February 2010, the Lands Department held the last land auction of the 2009-2010 financial year. A Government lot in Tseung Kwan O Area 66B was sold for HKD3.37 billion, which was 68.5% higher than the opening bid and matched the upper expectation of the market. The auction lasted for 22 minutes amid keen responses from developers who were confident with the market outlook. The lot measures 12,300 sq m and is designated for non-industrial purposes, with a GFA between 40,590 sq m and 67,650 sq m when completed. The sale means the government pocketed land revenue of about HKD32 billion this financial year, almost double the HKD16.5 billion that it projected in its budget forecast.
RMLs in negative equity records quarterly drop of 44.5% at Q4 2009 The Hong Kong Monetary Authority announced on 1 Feb 2010 the results of its latest survey on residential mortgage loans (RMLs) in negative equity. The estimated number of RMLs in negative equity decreased from 835 cases at end-September 2009 to 466 cases at end-December 2009, which was the lowest level record started in 2001. The aggregate value of RMLs in negative equity declined to HKD0.7 billion at end-December 2009 from HKD1.5 billion at end-September 2009. The three-month delinquency ratio of the RMLs in negative equity fell to 0.57% from 0.82% at end-September 2009. DTZ statistics showed that the price of mass residential, taking Taikoo Shing as an example, rose 45.5% as of Q1 2010 from the trough level in November 2008, during the heat of the financial crisis. Rising home prices relate positively to the drop in negative equity records.
Contact | Ms Stephanie O Y LIU Phone | +852 2507 0637 E-mail | [email protected]
India India budget 2010-11: a mixed bag for the real estate sector The Budget 2010-11 announced in late February 2010 included the extension of interest subvention on housing loans by a year and increased budgetary allocations for urban development and housing schemes. However, at the same time construction costs are expected to rise with a partial rollback of excise duty on
- 3 - This publication represents only a brief summary of information received from many outside sources and no guarantee can therefore be given by DTZ or any of its employees as to its accuracy. Please refer to original source or seek more detailed advice from the firm before relying on any statements made.
Asia Property Market Update | March 2010
cement. Due to the service tax levy on the “activity of construction”, the cost of under construction units is expected to rise with a resultant rise in demand for completed units. The fate of STPI (Software Technology Parks of India) units has been left jeopardised by its conspicuous absence in the budget speech, which implies the end to fiscal benefits under the scheme, leaving SEZs (Special Economic Zone) as the only tax haven for IT/ITES companies in India.
HUDA to develop infrastructure in new sectors of Gurgaon The Haryana Urban Development Authority (HUDA) is planning to give a further thrust to infrastructure in the new sectors of Gurgaon. Through its Land Acquisition Department, it is in the process of acquiring land in sectors 99-115 and 58-67 to develop infrastructure in 26 new residential sectors and in 16 other commercial sectors. The development in these prominent sectors adjoining the Dwarka-Gurgaon link road would be undertaken in two phases.
Contact | Ms Divya PALL Phone | +91 124 459 7500 E-mail | [email protected]
Jakarta BI keeps rate low at 6.5% to back growth The central bank of Indonesia kept its benchmark rate low, at 6.5%, for the sixth straight month despite the surge in the inflation rate in January 2010 in order to support the country’s economic growth. The year-on-year inflation rate rose to 3.72% in January, a jump from 2.78% in December 2009, due to the rising prices of staple and processed foods, the Central Statistics Agency (BPS) reported. The monthly inflation rose to 0.84% in January from 0.33% in the previous month. BI's move to hold its rate was expected by analysts. They said BI might start increasing its rate at the earliest in the second half of this year due to possible stronger pressures from higher energy prices.
BKPM regains past status as a “one stop shop” The Investment Coordinating Board (BKPM) has regained some of its past role in the areas of investment licensing, amendments to the negative list and preparation of the country’s investment road map. With this new licensing power, BKPM could serve as a “one stop shop” for both foreign and domestic investors who want to invest in the real estate sector, including manufacturing and SMEs. Under the one stop shop service, BKPM could process investment licensing as fast as five hours and seven days at the slowest. In addition, BKPM is tasked to draft the investment road map that would chart the ways and means to transform Indonesia’s natural resource-based economy towards the ultimate aim of achieving a knowledge-based economy.
Contact | Ms Vera SUMARSONO Phone | +6221 576 3838 E-mail | [email protected]
Kuala Lumpur Sunway Pyramid building into the future The Sunway Pyramid Shopping Mall plans to be Malaysia's biggest mall by size and is likely to overtake the Mid Valley Megamall in Kuala Lumpur as the country's biggest mall by size within the next five years. The two new phases form part of Sunway City Bhd's (SunCity) planned development on a 2.35 ha plot of open car park land adjacent to the existing Sunway Pyramid and the Sunway Lagoon Theme Park. Currently, Sunway Pyramid has a total GFA of 4.5 million sq ft and 500,000 sq ft will be added to the GFA of the mall. The new project will also increase the number of parking bays in the mall, hotel and theme park area by 2,000 to 9,500.
- 4 - This publication represents only a brief summary of information received from many outside sources and no guarantee can therefore be given by DTZ or any of its employees as to its accuracy. Please refer to original source or seek more detailed advice from the firm before relying on any statements made.
Asia Property Market Update | March 2010
Magna Prima plans RM1.3 billion twin towers on KL prime site Property developer Magna Prima Bhd will build twin tower blocks, valued at more than RM1.3 billion, on 1.05 ha of prime land near the Petronas Twin Towers in Jalan Ampang, Kuala Lumpur. They bought the land, currently occupied by the 44-year-old Lai Meng Girls School Association, for RM148.2 million in March last year. The first tower will feature luxury serviced apartments and the second tower, a Grade A green office building with up to 900,000 sq ft of net lettable area. The office tower may be leased or sold. Magna Prima is targeting to start construction in 2013. The twin towers project will be Magna Prima's single largest development to date, and its second project in the Kuala Lumpur City Centre area.
Contact | Ms Suseelawati UNGKU OMAR Phone | +603 2161 7228 E-mail | [email protected]
Nanjing New prime land located in Jiangning On 9 February 2010, the last residential plot sold before Lunar New Year was purchased by Agile Group for RMB1.01 billion. Located at the airport highway of Jiangning District, No. 2010G01 plot occupies a site area of 114,019.8 sq m, with a plot ratio of 2 and an initial bidding price of RMB573 billion, i.e. RMB2,513 per sq m. This prime land attracted eight enterprises to join the bid, including Agile Group, MCC Real Estate and Treenity. After 51 rounds of bidding, Agile Group purchased the site for RMB1.01 billion, which is RM4,407 per sq m. The record price is far higher than that of the Jiulong plot that was sold to MCC Real Estate in 2009. The standing record was RMB3,909.64 per sq m.
Youth Olympic Village to be built in Hexi New Town On 11 February 2010, the International Olympic Committee announced that Nanjing will be the host city of the 2014 Summer Youth Olympic Games. Lu Zhi Peng, Secretary of Commission of Jianye District said Nanjing will start the five-year construction plan and the core section will be the Youth Olympic Village. With a planned GFA of 180,000 sq m, five-floor condominiums will be built on the site and it is expected that the village will be completed in 2013. It will first be used as a residence for athletes and sold to citizens after the Games. In association with the Youth Olympic Committee, 15 hotels of five-star rating or above will be built in four years. Golden Eagle International Plaza, Nanjing World Trade Centre, etc., plan to be involved in different hospitality projects.
Contact | Mr Vincent F S LUK Phone | +86 21 2208 0088 E-mail | [email protected]
Qingdao Qingdao’s GDP grew steadily in 2009 Qingdao Municipal Government announced the 2009 economic statistics on 2 February 2010. Qingdao’s GDP in 2009 totalled around RMB48.90 billion, up 12.2% from a year earlier. The per capital disposable income in Qingdao grew 9.3% from a year earlier, to RMB22,368 in 2008. Of this, the contribution from tertiary industries, including the real estate industry, was 45.2% up. The tertiary industries had an added value of RMB22.1028 billion, up 12.5% compared to 2008. The price indices remained stable and the Consumer Price Index rose 0.5%, while housing prices remained the same as 2008.
Seven projects to advance the business district in Licang District On 2 February 2010, the Licang District government announced at the economic conference that seven projects, including Baolong Town Plaza, Weidong Town Plaza and Wanda Business Complex, located in the business district of Licang District, will be run this year. These projects would help advance the district’s diversity and improve its business framework. It is estimated that the construction will cost RMB6 billion. Meanwhile, 31 business promotions projects with standardized purposes and field targets are
- 5 - This publication represents only a brief summary of information received from many outside sources and no guarantee can therefore be given by DTZ or any of its employees as to its accuracy. Please refer to original source or seek more detailed advice from the firm before relying on any statements made.
Asia Property Market Update | March 2010
confirmed for Licang District. One of them includes the “Monkey King” plot, located at Chongqing Middle Road, with a site area of 33.8 mu. The site is situated at the intersection of the business districts of Licun Centre and Cangkou, with a planned investment amount of RMB1 billion.
Contact | Mr Jason J GAO Phone | +86 22 2313 9751 E-mail | [email protected]
Seoul South Korea National Pension Service takes 12% stake in Gatwick Airport South Korea's National Pension Service (NPS) is set to take a 12% stake in Gatwick Airport in the suburb of London worth about £100 million (USD149.6 million). This deal comes as part of a sweeping international expansion programme by the world’s fifth biggest pension fund. An NPS official said that the fund is hoping to raise its investment in Britain, and that some infrastructure-related investment ahead of the London Olympics in 2012 could be very interesting and could generate some momentum. NPS’s investment strategy for now and for the foreseeable future is to look for possibilities to join forces with big international players.
KIC and IFC Seek Joint Investment Korea Invest Corporation (KIC) will seek joint investment with the Asset Management Company, an affiliate of International Finance Corporation (IFC), in an effort to facilitate overseas strategic investment for resources and energy. “In order to maximise investment gains, KIC will establish joint investment opportunities by utilising not only competent foreign sovereign wealth funds but also global investors and networks, from which linked investments can be stimulated,” said the CEO of KIC. The chief investment officer of KIC left for Washington on 16 February 2010 to meet with IFC officials and discuss the matter. KIC and IFC will work together for investments in projects by less-developed countries.
Contact | Dr Jong-woong SHIN Phone | +82 2 556 8002 E-mail | [email protected]
Shanghai Shanghai’s edition of the Application List System helps build future landmark in New Bund District Shanghai Zendai Property Development Co. Ltd purchased the commercial plot 8-1 Financial Block located in Shanghai Bund for RMB9.22 billion, the first land to be auctioned in the Shanghai Edition "marking-out system", hitting a record price in Shanghai. The unit price is around RMB34,148 per sq m. Though the plot is the new prime site in Shanghai, the premium rate of less than 3% marked the lowest record in pre-application land sales. The plot is the only commercial plot in New Bund to be auctioned recently. It is located in the core area of Shanghai International Financial Centre, with a planned GFA of 270,000 sq m above the ground and the height limitation is 180 metres. The project is expected to be the new landmark in New Bund.
Shanghai raises Provident Fund loans for economically affordable housing in 2010 On 26 February 2010, Shanghai Provident Fund Management Centre released the “2009 Shanghai Housing Provident Fund Operation Analysis Report”, which showed that provident fund loans were granted to 187,400 housing units last year, to a total amount of RMB56.61 billion. It hit the record high of provident fund loans for individual housing units. This year Shanghai will raise the loan amount for families who purchase economically affordable housing and increase their ability to repay the loan. Shanghai Housing Provident Fund Centre said the housing provident fund system will continue to finance the construction of low-rent housing and support economically affordable housing, public rental housing, etc.
- 6 - This publication represents only a brief summary of information received from many outside sources and no guarantee can therefore be given by DTZ or any of its employees as to its accuracy. Please refer to original source or seek more detailed advice from the firm before relying on any statements made.
Asia Property Market Update | March 2010
Contact | Mr Vincent F S LUK Phone | +86 21 2208 0088 E-mail | [email protected]
Shenyang A business park to be built in Sujiatun Shenyang Shenyang Municipal Government set the strategic development plan for Sujiatun in 2010. On the principle of “One city, Three Districts and Two Lines”, the government plans to complete the business park within three years. At the initial phrase, the construction plan of the core area of the business park would have a breakthrough, while the logistics distribution district will be opened soon.
Huafa establishes its subsidiary to develop projects in Shenyang On 5 February 2010, Zhuhai Huafa Industrial Co. Ltd (Huafa) announced that it will co-operate with Shenyang International Exhibition Centre Co. Ltd to establish two companies - Shenyang Huana Property Co. Ltd and Shenyang Huayao Property Co. Ltd - to develop the project secured in December 2009. Huafa holds 35% of the shares of each of the above companies, while International Exhibition Centre Co. Ltd holds 47% of the shares of the respective companies. The Shenyang project extends east to South Tiantan Street, west to South Yingpan Street, south to East Yinka Road and north to Jinka Road. The planned area for sale occupies 192,432.1 sq m, while the planned GFA spans 1.06 million sq m.
Contact | Ms Betty X ZHAO Phone | +86 411 8886 5288 E-mail | [email protected]
Shenzhen Shenzhen releases statutory plans for 10 districts The Shenzhen Urban Planning Bureau released statutory plans for 10 districts on 6 February 2010. These districts included Nanyou, Shiyan, Shajing, Songgang, Longhua, Dapeng, Kuichong and Baolong. Among them, the plan for Dapeng Peninsula naturally stole the limelight as this area will become a new resort and seaside tourist town in Shenzhen under government planning, with a limited development of mass residential space. Longhua will become a major town in central Shenzhen, and Nanyou will see more cultural developments and the relocation of its heavy industries out of the town. The statutory plans also revealed an increased scale in developing community facilities, such as nurseries and hospitals.
Sales of villas rise in 2009 According to the 2009 sales figures released recently by the China Index Academy, a total of 1,890 villas were sold last year in Shenzhen, covering an area of more than 450,000 sq m. This represented an increase of 116% and 110%, respectively, in terms of the number of unit sold and the area sold compared with 2008. On the other hand, the prices of villas fell by 1.12% year-on-year to RMB34,050 per sq m on average, due mainly to a larger share of cheaper villas on the market. Eleven new villa projects are expected to be launched this year, bringing the number of units in the pipeline close to 700. Six projects will be located along the eastern shore line of Shenzhen, with some of them commanding a total price of RMB100 million per unit.
Contact | Mr CHENG Jia-long Phone | +86 755 8212 5111 E-mail | [email protected]
Singapore Roaring start for sales of new private homes Singapore’s private property market is off to a strong start this year, with new-home sales coming in at a
- 7 - This publication represents only a brief summary of information received from many outside sources and no guarantee can therefore be given by DTZ or any of its employees as to its accuracy. Please refer to original source or seek more detailed advice from the firm before relying on any statements made.
Asia Property Market Update | March 2010
record-setting pace. The Urban Redevelopment Authority (URA) said that 1,476 new homes were sold, sharply higher than the 481 units sold in December and 601 sold in November. Property analysts said that this has set the tone for 2010. Demand for new homes is expected to be strong, especially in the higher-end segments. URA figures seem to confirm this trend. Almost half of the new homes sold – 699 units – were in prime areas such as Cairnhill and Holland Road, otherwise known as the core central region. The region saw the largest jump in number of units launched and sold.
“Flipping” rate at three-year low Sub-sales of non-landed homes fell to a three-year low last year, with the proportion at 14% of total non-landed sales, said property consultancy DTZ. This figure is below the 16% in 2008 and 15% in 2007, but much higher than the 2% to 11% registered between 1998 and 2006. The government would levy a stamp duty on sellers of private homes if they were to sell the homes within a year of purchase on or after 20 February this year. It also lowered the loan-to-value limit to 80% for all housing loans provided by financial institutions, from 90%. The government introduced these measures to “temper sentiments and pre-empt a property bubble from forming”.
Contact | Ms Angelina LIM Phone | +65 6293 3228 E-mail | [email protected]
Taipei Auction of state-owned land sets second-highest price record On 25 February 2010, the National Property Administration (NPA) auctioned a 121.3 ping (401 sq m) plot of land on Jianguo South Road in Taipei for NT$6.02 million per ping, or a total of NT$731.11 million. The winning bid, from a bidder surnamed Chiu representing the Hwatai Bank and PXmart Co Ltd, was the second-highest price per ping for land in the history of residential land sales in Taipei. The auction, which was the first after the Lunar New Year, attracted a keen response from developers and saw another plot go under the hammer. The plot on Shinshen North Road was sold for nearly NT$3 million per ping to Hongtu Cai, a subsidiary property company of Cathay Financial Holdings.
Contact | Mr Billy P L YEN Phone | +886 2 8788 3288 E-mail | [email protected]
Tianjin “Golden triangle” is future service hub in Tianjin Construction machines worked non-stop over the past Lunar New Year holiday as the Heping District in Tianjin rushed to fulfil the goal to become a new service hub of the municipality. The budding district, which is bounded by Jin Street, Financial City and Wuda Road, already has 25 shopping malls that span a GFA of 10,000 sq m each, and 54 commercial and office buildings. The Financial City, which is still under construction, has started leasing and around 200 various financial companies have signed contracts.
Contact | Mr Jason J GAO Phone | +86 22 2313 9751 E-mail | [email protected]
Tokyo Nomura Real Estate is to establish private REIT Nomura Real Estate has decided to establish a private real estate investment fund (REIT). Nomura already owns two listed REITs: Nomura Real Estate Office Fund and Residential Fund; however, it will be a non-listed open-end fund this time around. It plans to capitalise from pension funds, targeting AUM at JPY150 billion. - 8 - This publication represents only a brief summary of information received from many outside sources and no guarantee can therefore be given by DTZ or any of its employees as to its accuracy. Please refer to original source or seek more detailed advice from the firm before relying on any statements made.
Asia Property Market Update | March 2010
Sekisui House acquires Joint REIT with Spring Investment Sekisui House, a major housing developer, announced that it has decided to purchase the asset management company of Joint REIT together with Spring Investment in March. Joint REIT was established by Joint Corporation; however, it has been looking for a new sponsor after Joint Corporation filed for bankruptcy in May 2009. The share for Sekisui House and Spring Investment will be 75% and 25%. Sekisui also announced on the same day that it agreed a business alliance for real estate business with Kowa Real Estate, one of the major developers in Japan.
Contact | Ms Kayoko HIRAO Phone | +813 5512 8213 E-mail | [email protected]
Wuhan Taiwan business to increase investment in Wuhan Clevo, a computer and notebook specialist, and one of the top 50 enterprises in Taiwan, visited Wuhan in February 2010 to inspect the operation of Chicony Plaza, which was built in 2004 with a RMB700-million investment from Clevo. The group was satisfied with the RMB1.3 billion in revenue the plaza earned in 2009 and was said to be interested in diverting more investment to develop a new IT mall in Hankou area.
Construction on Phase 2 of the Wuhan International Exposition Centre to start in March Construction work on Phase 2 of the Wuhan International Exposition Centre, which is located at the intersection of Sixin Avenue and Binjiang Road, will start in March 2010. The new project is an overhaul of the original design, which includes the replacement of some of the riverfront residential space with a marine-themed exhibition hall, and a smarter outline of the entire project, supported by more hotels and leisure facilities. Phase 2 will cover an area of 23.4 hectares and create a total GFA of 740,000 sq m. It will include an exposition centre, an exhibition hall, hotels and high-rise offices. The RMB6.9-billion project is scheduled to be completed by October next year.
Contact | Mr Stephen YEN Phone | +86 27 6885 0868 E-mail | [email protected]
Xiamen China’s first eco-friendly artificial island to be built in Xiamen Bay Construction of China’s first eco-friendly artificial island, “Shuangyu Island”, starts on 5 February 2010. It is located at the development zone of China Merchants in Zhangzhou, Fujian, with an investment of RMB3 billion. This is the first offshore eco-friendly artificial island in China, with a planned GFA spanning 2.2 sq km. The island comprises resort area, cultural and residential elements and is planned to be completed in three years. The project is the first operational sea project and also the first offshore artificial island project approved by the State Council, which marks a milestone in China’s sea project development.
Xiang’an Tunnel set to open to traffic in April 2010 The first undersea tunnel, “Xiang’an Tunnel”, in mainland China is expected to open to traffic in April 2010. Xiang’an Tunnel is the largest traffic infrastructure project in Xiamen in terms of investment, costing RMB3.197 billion. As the third external channel connecting Xiamen Island and Xiang’an District, the undersea tunnel consists of two main functions, including highway and city roadway that connects Xiamen Bridge in the north and Haicang Bridge in the west. The three channels form a traffic network connecting the outer areas of Xiamen.
Contact | Mr CHENG Jia-long Phone | +86 755 8212 5111 E-mail | [email protected]
- 9 - This publication represents only a brief summary of information received from many outside sources and no guarantee can therefore be given by DTZ or any of its employees as to its accuracy. Please refer to original source or seek more detailed advice from the firm before relying on any statements made.
Asia Property Market Update | March 2010
Xian Bunker-cum-shopping centre on Tangyan Road In February 2010, the Air Defense Office of Xian noted that construction on the first phase of the Tangyang Road Air Defense project is ready to start in March. This RMB500-million project is located between Tangyan Road and Fenghui South Road, close to a Tang Dynasty town wall ruins memorial park. When completed, it will be the biggest single air defense construction in northwest China, serving as a bunker and a shopping centre that includes underground shopping streets, supermarkets, outlets and parking spaces. The deepest level will be used as a bunker and parking spaces.
Contact | Mr Michael B M WU Phone | +86 10 6510 1388 E-mail | [email protected]
Did you know? Shenzhen and Chongqing Investment teams conclude an onshore JV deal in Chengdu DTZ's investment teams in Shenzhen and Chongqing successfully completed the first deal in 2010 – the transaction of an onshore joint venture deal between Zhongrong Trust (ZRT) and Chongqing Loncin Group, one of the top developers in the local market. The subject is a residential plot at Jiancai Road, Chenghua District owned by Chongqing Loncin Group. It spans 62,058 sq m with a planned GFA of 358,987 sq m. ZRT has raised RMB283 million and has injected this into the project company as registration capital. With experience from previous offshore JV deals, the Shenzhen and Chongqing teams helped ZRT and Loncin and finally completed the deal, which is DTZ's first with domestic trust companies, demonstrating our market coverage with domestic financial institutions and our deal-closing ability.
Rise in European investment volumes indicates broad based recovery, says DTZ There are clearer signs of recovery across Europe, as investment volumes increased for the third consecutive quarter in Q4 2009 to €20.6 billion (about USD22.35 billion), which was a 26% increase on the Q3 figure, according to DTZ’s European Quarterly report published in early February 2010. Due to the growing number of investors targeting the market, the value of large-scale deals increased significantly in France, from €1.6 billion in Q3 to €3.9 billion in Q4, up 145%. UK and Germany, meanwhile, fell by a moderate 7% and 3% respectively in volume. DTZ expects the recovery in Europe’s commercial real estate market to continue, with an estimated €106 billion of capital available in 2010. If all capital was spent on investment opportunities, European investment volumes would increase by 80% over the coming year.
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