THIS STORY WAS LIKEWISE DIFFICULT TO EDIT. I’M SLOWLY LEARNING HOW TO MAKE THIS DRY MATERIAL A LITTLE MORE SEXY, BUT IT’S A STEEP LEARNING CURVE FOR ME. PUBLISHED MAY 2007.
A Record Year for Foreign Real Estate Investors
By Wu Xiaobo
“At that time, we thought that Shanghai alone was really big, and could completely fulfill our needs. The Chairman of the Board was also worried that it would be risky to expand from one market to multiple markets,” recalls the president of Capitaland, Lin Mingyan, talking about the company’s growth in China from 1995 to 2002. Beginning last October, despite greater risks in the Chinese real estate market and the Chinese government’s recently passed measures to limit foreign investment, the company purchased one plot of land after another for residential buildings in places like Hangzhou, Foshan, Chengdu and Shanghai. They also further advanced their involvement in the Chinese interior retail industry. Capitaland is just one example of a foreign investment company that disregards government-issued regulations and continues to add momentum to the expansion of property investment in China.
Large profits that can be made from the rising cost of housing are the contributing force. Statistics from the People’s Bank of China reveal that in 2006, the average selling price of houses in 70 second- and third-tier cities in China went up by 5.5%. Data released by the State Development and Reform Commission and the National Statistics Bureau also indicates that as of February 2007, the housing prices in these cities had risen by 5.3% compared to the same time last year, and it was closer to 10% in cities like Beijing, Guangzhou and Shenzhen.
The Managing Director of Asia Pacific RREEF, the global real estate investment management division of Deutsche Bank, Brian Chinappi, predicts that “compared to other important markets around the world, the profit margin in China’s housing market will reach 20-30%. In the future, that margin is likely to exceed the United States’.” He believes this strong opportunity has appeared because of the rapid economic structure transformation of Chinese cities in recent years.
When Chinappi arrived in China in March 2006, his bank has just collected a world-wide generated fund intended solely for Chinese real estate market use. In November, Deustche Bank teamed up with Macau New Genesis International Co., Zhuhai Zhong Zhu Stock Co. Ltd., and Zhuhai SEZ Xihai Group Co. Ltd. to develop a residential project called “Zhongzhu Uptown.” This year, they invested in another residential project in southern China. Chinappi says his department does not have a set limit on how much it can invest in China. Other than important cities, such as Beijing and Shanghai, they also intend to invest in western areas with strong economic development, such as Wuhan, Chengdu and Chongqing.
The international real estate advisory company Jones Lang Lasalle confirms real estate deals from overseas investors continue to grow. The company’s Global Real Estate Investment Report released earlier this year points out the transaction volume of China’s real estate market last year reached 68.4 billion RMB (9 billion USD), with 60% coming from overseas investors — an increase of 55% from last year.
This is the situation the Chinese government fears—that rampant speculation will push up housing prices, thereby creating a real estate bubble and resulting in the collapse of the real estate market. This year’s State Council government work report specifically cited “Resolving the Housing Situation of Citizens.” And in the Ministry of Commerce’s recent directive on attracting foreign investment for 2007, it was suggested that there be “strict limits on foreign investment in real estate.” Compared to the directive released in July 2006, it’s clear that the Chinese government’s stance is getting tougher.
Foreign investors prescient to the crackdown have already found a way to build an investment strategy especially tailored for the Chinese market. Most companies are already transferring the focus of their investments to second-tier cities and luxury developments. For example, Merrill Lynch, Temasek, and Deustche Bank spent 3.04 billion RMB (400 million USD) to jointly buy an 8% stake in Guangzhou’s Hengda Real Estate. At the beginning of this year, the company announced that it would successively expand investments in seven or eight cities including Wuhan, Chongqing, Chengdu, Shenyang and Tianjin. The Director of Investments at Jones Lang Lasalle, Zhong Deyao, points out foreign investments are now starting to spread to southern China and second- and third-tier cities in the interior.
Kurt Roeloffs from RREEF believes without a doubt that this trend is related to the Chinese government’s control. At present, the supply of land in Beijing, Shanghai and other large cities is already ruled with a tight fist, so foreign investors have no choice but to turn to second-tier cities.
Regarding the other focal point for foreign real estate investors on luxury residences, the Asia Managing Director of Invesco Liu Qingshun says, “As a foreign investor, we are more concerned about the mechanism for pulling out. Relatively, it is easier to pull out of residential properties, so mid- and high-end residences have become our first choice for investments.” Zhong points out the Carlyle Fund, which usually only buys commercial projects, bought villa properties in Shanghai for the first time at the end of last year. Additionally, at the beginning of this year, Gateway Capital bought this kind of property for the first time with a total purchase of 102 luxury Shanghai residences that averaged 40,000 RMB (5,263 USD) per square meter. Zhong thinks that these deals were adaptive strategies due to restrictions placed on the Chinese real estate market.
Actually, this pull-out, get-rich-quick investment is specifically what worries the Chinese government and curbing it is the main impetus behind the new restrictions. In his article, “China’s Real Estate Market,” written last July, Mei Xinyu, from the Foreign Trade Department of the Chinese Academy of International Trade and Economic Cooperation says overseas real estate investors are characterized by their flock mentality — especially in hot, speculative markets. Once real estate investors get wind that earnings will drop, investors’ cash flow will be interrupted or that other emerging markets will experience a positive reversal in capital flow direction, the investors will fight for early exit. Although the exit of foreign investors alone isn’t enough to cause collapse of the Chinese real estate market, their flight influences other domestic investors and speculators to follow lead and rush to sell. The consequences of such an event are difficult to predict.
However, Zhen Jinsong from World Union thinks the macroeconomic controls that the Chinese government has recently implemented have already been very successful. More than a few speculators are exiting the market and institutional investors are turning towards long-term investments. For example, at a press conference last year, the CEO and Managing Director of Morgan Stanley’s China Region, Sun Wei, said Morgan Stanley did not enter China to speculate on real estate, but to promote long-term development. This past January, Morgan Stanley bought Novel City in Shanghai’s Xuhui district for 530 million RMB (70 million USD). Richard Johnson, a managing director at Istithmar Management Fund also says even though they have not yet formally entered China, the company has already increased the investment ratio for the Asia Pacific region, which includes China, from last year’s 5% to this year’s 20-23%. The total amount in this fund for long-term investments will reach 12.16 billion RMB (1.6 billion USD) to 13.68 billion RMB (1.8 billion USD).
Aside from the being pushed into more long-term investment by the macroeconomic controls, foreigner investors are also being pulled into it by domestic real estate property developers who urgently need foreign investment to stave off high debt ratios. Mei Xinyu points out that many real estate developers in China are quickly expanding by blindly pursuing business transactions. Capital has always been tight. If they cannot find foreign investors to support them when the government orders tighter controls put into effect, they will come to a dead end. This March, the head office of Gemdale Group in Shenzhen signed an agreement for a project in Wuhan with the Netherland’s ING, which is to provide 81.6% of the investment. The Gemdale Group’s annual report from last year shows that the company’s debt ratio is higher than 65%. The chairman of the Gemdale Group Zhang Huagang says, in addition to selling shares to finance their projects, they will also raise money by giving creditor rights to foreign banks.
Clearly, since May 2006, this series of unprecedented and strong governmental policies limiting foreign investments—including the restriction of real estate credit management and the enforcement of law in regards to collecting taxes on vacant land—has helped prevent a real estate bubble, but it has also put many domestic companies, such as the Gemdale group, into a situation where foreign capital is essential to survival and thus quickened foreign capital’s China entry.
Lin Mingyan says even though government policies are not that clear and the order and transparency of the market is still inadequate, macroeconomic policies only restrict speculators, not investors. He expects that in the next five years, investments in China will double. “Opportunities are far-reaching. It’s not just about Shanghai anymore.”
A Record Year for Foreign Real Estate Investors
海外房地产商的下单年
撰文／吴哓波
“那时（总公司）认为上海很大了，已经完全可以满足需要。董事局也担心从单一个市场扩张到多个市场会有风险。”凯德置地现任总裁林明彦在回忆他们从1995年到2002年的中国发展过程时说。今天，虽然中国房地产市场的风险甚至更大，而且中国政府自去年起，更陆续出台种种限制海外资本投资的措施，但像凯德置地等海外地产资本，却反而加快了中国房地产的投资进程。凯德从去年 10 月起，便频频于杭州、佛山、成都、上海等地购入住宅地块，并且进一步向内地的零售商业领域进发。
驱使外资公司无视中国政府颂布的调控法令，继续加速扩大房地产投资的动机，当然是国内房价上涨背后的高额利润。据中国人民银行的统计资料显示，2006年，中国 70 多个大中城市的房屋售价平均涨幅高达5.5%；中国国家发展与改革委员会和国家统计局发布的数据也指出，今年 2 月，这些城市的房屋售价与去年同期相比上涨了5.3%，北京、广州、深圳等城市的增幅更接近10%。
德意志银行全球房地产投资部（RREEF）的亚太区总监Brian Chinappi预测，“与全球其它主要市场相比，中国住宅项目的毛利率平均将可达到 20%至 30%。未来的表现更或将超越美国。”他认为这都是中国城市近年经济结构急剧转变带来的强劲机遇。
去年3月，Chinappi刚刚来到中国。当时，德意志银行在世界范围内募集了一笔专门用于中国房地产市场的专项基金。到了11月，该银行与澳门新创衡集团和珠海的中珠股份和西海集团共同在珠海开发了“中珠上城”。今年，他们又在华南地区落实另一个住宅投资项目。Chinappi说，他的部门在中国并没有设定投资金额上限，除北京及上海等主要城市，他们也有意在中西部地区，如武汉、成都、重庆等经济增长良好的城市进行投资。
国际房地产服务公司仲量联行表示，来自海外资金的房地产交易不断升高。该公司今年初发布的《全球房地产投资报告》指，中国房地产市场去年的交易金额高达 684 亿人民币 (90 亿美元) ，其中高达 60 %来自海外投资，增幅比前一年增加了55%。
对此情况，中国政府却是忧心忡忡，担心投机热钱大量涌入哄抬中国房屋市价格、制造房地产泡沫，从而导致房地产市场陷入混乱。尤其是“解决居民住房问题”已列入今年国务院的《政府工作报告》里。故在近日商务部关于 2007 年吸收外商投资工作的指导中，更出现了“严格限制外商投资房地产”的意见。相比于 2006 年 7 月出台的限外令，可以看到中国政府的态度正进一步强硬。
对此，嗅觉灵敏的外资早在为自己铺后路，以期找到一套专属于中国市场的投资方略。其中大多公司都在采用的，包括了把投资重点转向二线城市和高档住宅。例如，由美林证券、淡马锡和德意志银行三家合资30.4 亿人民币（4亿美元） 投资8 %股权的广州恒大集团，即于今年年初宣布了将会先后加大在武汉、重庆、成都、沈阳以及天津等七、八个城市的投资比例。仲量联行华南投资部主管钟德尧指出，现在的海外资金已开始全面扩散到华南以至内陆其他的二三线城市。
德意志银行全球房地产投资部（RREEF）卡尔·鲁道夫（Kurt Roeloffs）明确地表示，这种趋势其实与中国政府的调控有关。目前，北京、上海等大城市的土地供应已经受到严格控制，外资也是不得已转向二线城市推进。
至于外资房地产商的另一个转移重点──高档住宅，景顺投资 (Invesco) 亚洲区董事总经理刘清顺则表示：“作为海外投资者，我们更关心退出的机制。住宅物业相对上更容易退出，所以中高档住宅市场成为了我们的投资首选。”钟德尧指出，素来只买商业项目的凯雷基金，去年年底首度在上海购入别墅物业。另外，中东基金 Gateway Capital 在今年年初也首次进入上海便收购均价每平方米 4 万人民币（5,263 美元）的高档住宅共 102 套。他认为这些交易都是针对中国政府房地产调控下的应变策略。
其实，外资这种退出机制或者说动机，正也是中国政府忧心忡忡，因而要出台一系列限令的主要原因。外经贸部国际贸易经济合作研究院的梅新育在他去年7月撰写的《中国房地产市场不能放任外资涌入》文章中指出──国外房地产资本具有突出的“羊群行为”特征，特别是投机性的热钱。一旦预期收益恶化，或是投机者资金链断裂，或是其它新兴市场发生资本流动方向的逆转，他们就会争先恐后退出。虽然，外资自身的退出并不足以导致中国国房地产市场的崩盘，但他们的退出行为，却可能引起国内投资者或投机者的跟风抛售，后果难料。
不过，世联地产的陈劲松则认为，中国政府近期的宏观调控其实已取得了非常有效的成绩，不少炒家开始退场，而机构投资者也转向了长线的投资。例如，去年摩根士丹利董事总经理兼中国区首席执行官孙玮在一个记者会上公开表示，摩根士丹利到中国来不是炒房产，而是长线发展。今年1月，摩根士丹利以5.3亿人民币 ( 7 千万美元)收购上海徐汇区的永新城；而来自阿联酋的ISTITHMAR基金管理公司的董事总经理理查德·约翰逊（Richard Johnson）也说，尽管他们目前仍未正式进入中国，但该公司已把今年对亚洲地区，包括中国的投资比例，从过去的 5 %提升到 20%到23%，这笔长线投资的资金总数便达到 121.6 亿人民币（16亿美元）至136.8亿人民币（ 18 亿美元）。
事实上，除了政府宏观调控的压力，外资转向长线投资的另一个重要原因，乃是中国本土房地产开发企业普遍负债率偏高，急需引入外资所致。梅新育指出，中国很多房地产开发商都是盲目地追求业务的高速扩张，资金一向紧张，因而一旦遇到政府颁布调控法令，若然寻求不到外资支持便只有死路一条。例如总部位于深圳的金地集团，它与荷兰 ING 今年3月底签订的武汉项目协议，ING出资的比例便达到了 81.6 %。从该公司去年的年报显示，金地集团的资产负债率高于65%。金地集团总裁张华纲更指，他们除会通过股权融资为项目寻求海外资金外，也会向境外银行进行债权融资。
可以看到，中国政府自2006 年 5 月以来发布的一系列力度空前限外投资政策，包括限制房地产信贷管道、依法从高征收土地闲置费等，虽然一方面有效地遏制了房地产市场的泡沫，但另一方面也制造了不少像金地集团这样急需外资支持的本土企业，进而反带动了外国资本更快地进入中国市场。
林明彦认为，宏观调控限制的只是投机而非投资，尽管目前中国政府的政策并不明朗，市场秩序和透明度也不足。但他预期凯德置地未来五年在中国的投资将翻倍。“机会将远远不止于上海一个地方。”
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