Real estate investments robust as overseas buyers return

By Cherry Cao | December 10, 2013, Tuesday |

Online Edition

SHANGHAI saw robust sentiment for real estate investments this year with overseas buyers returning to play an active role, a global property services provider said today.

Major real estate investments, referring to en-bloc deals valued at more than US$10 million each, jumped 50 percent from 2012 to 46.7 billion yuan (US$7.66 billion) across the city, according to DTZ, a division of UGL Ltd.

Overall, 54 percent, or 25.3 billion yuan worth of properties, were acquired by overseas investors, a year-on-year surge of 145 percent, DTZ data showed.

"Overseas investors seemed to regain their appetite for local properties this year while financial institutions were the most active among all domestic investors," said Jim Yip, managing director of investment and advisory services, DTZ China. "Office buildings still remained the most sought after property type for investors as they account for nearly two-thirds of this year's total investment."

About 64 percent of the investment deals concluded this year in Shanghai went to offices, immediately trailed by 18 percent for retail properties. Residential, hotel and industrial deals took a share of 9 percent, 6 percent and 3 percent, respectively.

For the year ahead, investment prospects for real estate projects in Shanghai will remain rosy with overseas and domestic companies continuing to be active, according to DTZ’s forecast.

"Offices will continue to be chased after with those in the Pudong New Area particularly attractive to investors mainly due to the recent opening of free trade zone," Yip said. "Meanwhile, as the capital value of industrial properties in Waigaoqiao, Pudong airport and Lingang areas is expected to climb following the establishment of FTZ, demand for those properties will also be further triggered."

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