Friday, May 15, 2009

China Development Bank Buys Office Building developed by R&F Properties at 22.7K Yuan per SQM

The long speculated moves by R&F Properties to sell its commercial properties and to raise funds through diversified channels turned out to reach a deal lately. The Hong Kong-listed developer announced yesterday that it had sold a half of the offices and the naming rights of the R&F Yingtai Place at Pearl River City, CBD of Guangzhou City, to the Guangdong Branch of China Development Bank(CDB) at a price of around 500 million yuan, marking the biggest deal in Guangzhou’s office market this year.
“We have gone through a 6-month negotiation in efforts to sell this property,” said Li Silian, Chairman of R&F Properties. With a total sales of over 8 billion yuan in the first four months of this year, the latest transaction will make a significant relief to R&F’s tightened cash flow.
According to R&F’s release, the part of property bought by CDB includes 10 floors of offices and 1 floor of retail space, in addition to dozens of parking spaces, with a GFA of over 22,000 sqm, accounting for about 25 per cent of the whole property.
The unit price of 22,700 yuan per sqm is moderately lower than the price level of premium offices in the CBD of Guangzhou. However, the purchase includes several thousands square meters of retail space at the third floor, which is expected to bring a significant fair value gain in the future, noted Wu Deli, president of the CDB’s Guangdong Branch, the prices of many non-ground floor retail properties in CBD are above 50,000 yuan per sqm.

Thursday, December 11, 2008

First REITs Likely to be Born out of State-funded Enterprises

State-funded enterprises and large-sized real estate developers are expected to be the first sponsors of real estate investment trusts in China, said Li Qingxian, director of the research and cunsulting department of Colliers International's east China branch. Market watchers believe that initiation of REITs market will be constructive to the development of China's real estate investment market and equity market. The actualization of REITs will also increase the attractiveness of China's real estate market to foreign investors.

Wednesday, December 10, 2008

Y-o-Y Growth Rate of Property Prices in China's 70 Major Cities Slowed to 0.2 per cent in November

Property prices in China’s 70 major cities edged up 0.2 per cent y/y and down 0.5 per cent m/m in November, according to statistics jointly released by National Development and Reform Commission and National Bureau of Statistics. 43 cities witnessed a month-on-month drop in property prices in November, the statistics show. The y/y growth rate of property prices in November is 1.4 percentage points lower than that in October.

Wednesday, February 28, 2007

Chinese Economy Update

China's shares market plunged dramatically yesterday, with a market value loss of 1 trillion yuan. But a powerful rebounding recovered the index by 109 points today.

Apart from the rumors that stuck down the market yesterday, underground private funds are considered a major force that have been sell off shares after profit taking.

It's noteworthy that China's economic influence over the global economy is increasing remarkabley. The ripple effect of yesterday's market setback in China has caused declines of major stock markets around the globe, including New York, London, Tokyo and Toronto. Pessimistic market watchers warn that financial risk is accumulating quicly in the world's most populous country and may cause catastrophic economic crisis in the not too remote future . And yesterday's tumble may be just a pre-play of the potential shock.

Monday, February 26, 2007

Chinese Economy Update

  • State Council: housing prices in some cities are still rising too fast, more curbs needed.
  • Beijing is to provide 10 million sq meters of affordable housing and 10 mln sq meters of price-capped homes within 3 years.
  • Carrefour's five stores in Guangzhou in the red, Beijing outlets operating well.
  • Xinjiang boasts proven natural gas deposits of 1.29 tln cu meters, tops all the hydrocarbon producing regions in China.
  • Daily west-to-east gas transmission reaches 36 mln cu meters, up nearly 40 per cent yr-on-yr.
  • Beijing's tourism sector pockets CNY 1.9 bln during the week-long Chinese New Year holiday.
  • China's trade defict in service sector is in a widening trend.
  • Steel industry witnessed record high profit in 2006.
  • Monetary tightening remain central bank's main policy as concerns about excess liquity linger.
  • The three state-run oil giants of China will send deligations to Russia next month in efforts to seek breakthrough in engergy cooperation between the two countries.

Monday, December 25, 2006

Chinese Economy Update

  • Technical Barriers Cause Huge Losses to Chinese Exporters. Technical barriers caused a total materialized damage of 69.1 billion US dollars and losses of trade opportunities worth 147 billion US dollars to Chinese exporters in 2005, according to a report released by China's Ministry of Commerce on Dec 25.
  • China is set to raise resource prices in efforts to promote conservation, efficiency, and environmental protection. The pricing scheme for oil, natural gas, electricity, coal, water and land will be reformed, taking environmental costs into account. The government is to charge higher fees on waste discharge, sewage treatment and garbage disposal.

Tuesday, December 05, 2006

Beijing's tallest serviced apartments priced at 70,000 yuan per square meter

The serviced apartments suited at 50th-58th floors of Beijing Yintai Center complex's 63-story tower are labelled with a start price of 70,000 yuan per square meter (US$ 835 per square feet), another stunning price tag in China's white-hot property markets, local media reported. The tallest hotel/apartment building in Beijing is located at the core area of the central business district.

Finance of Beijing's gigantic public transit system

Beijing has issued over 5 million public transportation payment cards (RFID technology-based) in eight months since April this year. The city's public transportation carrier charges 20 yuan for purchase of each card. This has generated a total revenue of over 100 million yuan. The card is virtually a debit card. Assuming a commuter deposits 70 yuan (I guess this is a conservative estimate) in his/her card once a month, the public transit carrier could receive a total of 350 million yuan (in advance) a month. This would greatly increase the carrier's cash liquidity and thus allows it to charge the transport fare at a discount of 20% because it can benefit from the increase in holdings of cash assets. At the same time, the change gives the carrier more financial resources to upgrade its bus/train fleet.
In addition, the speculation about cancelation of monthly pass (card-based as well) was reignited yesterday. Souces said the cancelation may result in a further discount on the bus fare paid with regular card.

How efficient is China's R&D investment?

According to a report by the OECD, China's research and development (R&D) investment in 2006 is expected to reach US$136 billion, overtaking Japan to become the World's second largest R&D spender, just far behind the US. Although many foreign companies have established substaintial R&D capacities in China, a large part of coutry's indigenous R&D expenditure is likely to remain inefficient. A significant number of the applicants and users of R&D funds took the money with little output. The country is far from being a R&D power.