Haha, the news, always first and ahead of everyone
Shanghai housing prices to drop in ‘12: mayor
China Daily
Shanghai reported the first monthly drop in prices of new residential apartments in October. For the whole of 2011, new residential apartments were sold at an average of 22432 yuan ($3532) per square meter, according to estimates by real-estate agents.
Some interesting Reads I did this week;
Via Money Morning: China’s Real Estate Blindside could turn into a Real Buying and investment opportunity.
I usually do not follow outside opinions, because for china, looking at news, and research is basically useless.
It’s like reading the bible for a description of the universe (nothing against the bible, meaning you can’t get real facts about the other out of it), but this article seems well thought through.
Via Shanghaiist: Canadian Housing Scammer Ryan Fedoruk’s exposed, but not caught.
Via WSJ: Chinese Real Estate Tycoon Sells Gold buys property
now this kid’s got balls.
Via Wall St. Pit: Is it going to be the Year of the Bull (Rogers) or the Bear (Chanos)
rooting for neither! I’m a rabbit!
Over the years working in Shanghai Real Estate I have dealt with hundreds of leasing and sales offices, some of them run by large corporates like CBRE, J Lasalle, Colliers, DTZ and the likes, and the other half run by the developers themselves.
In terms of sales, well the market was great, all did great, now however, the market is slugging, and you’ll really start to see who provides real skill and value to the table.
Ask Wharf who is trying to sell the No 1 Xinhua Rd managed and sold (trying to sell) together with CBRE but mainly by themselves.
Sold a third in the first week and zero in all the months after that.
I have been going to view commercial and residenntial prime real estate in Shanghai with customers and it’s incredible, how often they will be alienated by the sales department who don’t realize that their name implies their purpose.
Today I called Sun Hong Kai properties to inquire about their mall space, with a customer who has worldwide destinations and defines locations.
The Sales lady picked up the phone, said: “wei, wei, wei” and hung up after muttering some swear words (maybe she thought nobody else was on the line but hey I did hear everything.
Called two more times and have been shoved off because she is “busy”.
The same developer though at another project in Pudong made another customer of mine wait nearly 3 hours a fortnight ago and re-scheduled twice before that.
Needless to say they’re furious, and actually only waited up for the sales people to show up so they can yell at them.
Developers have to realize that even though you’re in a red hot location, you need anchor points in Shanghai to make and define a location.
It makes the difference between the K11 which will never be anything else but an underground food court, and the Grand Gateway Malls in Shanghai which are a destination because of Element Fresh, Da Marco, Wagas, Colabo etc.
You see the people who sold the initial places, and their dedication to customer service and sales which are interlinked and you understand.
Please dear Sun Hung Kai, outsource it to somebody who knows how to sell.
Hmm, I would tell you I told you so (well I did) but I learned that after crying wolf long enough, sooner or later you’re going to be right, as long as you don’t change the course of your prediction. Forbes seems to think we’re heading down the rabbit hole a little sooner.http://www.forbes.com/sites/gordonchang/2011/11/06/property-prices-collapse-in-china-is-this-a-crash/http://www.bloomberg.com/news/2011-11-07/china-s-stocks-fall-amid-property-curb-concerns-greece-leadership-meeting.htmlhttp://online.wsj.com/article/BT-CO-20111107-702266.html
This time I’m not going to cry wolf, I’ll just sit by and enjoy the show, too often, I saw it unwinding, only for the big boys to jump in and contain the fire to a sizzling memory.
Preview The HQ and City Center in Shanghai
New news on the commercial Real Estate front in Shanghai.
The City Center in Hongqiao Gubei, a developement from Macao/HK Property Mogul Stanley Ho has teamed up with TCT,
the treasury china trust to extend it’s successful City Center project in Gubei’s Central Business District.
The new developement which is to be completed sometime in 2013, will feature more than 100′000 square meters of high end retail space, and a 150′000 square meters of premium office space.
One of the Tenants already confirmed is Marks & Spencer, who already signed up for 4k square meters for their new flagship store.
Richard Barrett, Chairman of the TCT, seems to follow the confidence in Shanghai’s commercial leasing market.
Midnight rambling about what’s been keeping me up.
So there is this thing going on these days, I’ve been in between a quite famous shanghai landmark sale for weeks, and could never really quite figure out why nobody else snatched it up before.
My client and I have been negotiating, and reading the financials, and in the end we figured it’s quite the deal we got on our hands.
Then, when something is to good to be true, you’ll find the catch, the Buildings lease (”ownership”) expires in 7 years.
A friend of mine pointed out that they’re selling because the government won’t renew the “ownership”.
I researched, and this rumor has been going around, and there might be something to it.
This brings me to question once again, one of Shanghai Real Estates biggest question marks.
What happens if the 70/50/30 year period on the ownerships expire?
Most people always assume there will be some kind of heavy tax you’ll have to pay, but it was always far out, and we all considered the possibility of the government taking back the property and the land it owns.
Yet, it was a long shot, considering the kind of fire that could trigger, think about it, it takes longer than 30/50/70 years for those properties to pay off (without capital appreciation).
Up until now, the city reclaimed property by negotiating a deal, and paying the “owners”.
I’m curious to see how this problem will solve, my client has already backed out, and it seems like the sale is in full process with three negotiating buyers.
In general, I would imagine the real estate bureau in shanghai blocking a deal on the property that is to be reclaimed.
Yet the seller would know this, and the banks in charge of the lending would have told us.
Funny world Shanghai, the thriller has yet to unfold it’s last act.
Soufun.com’s researched arm just published that sales in Beijing fell 19 percent in the first three quarters of the year and prices dropped an average of 10%.
In the meantime, Shanghai’s transactions (on paper) are down 5% yet prices rose 14% in the period from January 2011 to September.
Channel 1 Mall Shanghai
Blackstone the “glamorous” american buyout firm is selling it’s Channel 1 Mall on Changshou Lu (Shanghai Reailway Station) for 1.46 Billion Rmb to New World Developement (you know the ones that are responsible for that k11 damage done to Huaihai Road, at least this time they’re not hitting prime location in Shanghai).
Blackstone bought the Mall a couple of years ago for 1 Billion RMB from a Hongkong Investment firm when still vacant, it has succesfully transformed it and upgraded it to about 95 percent tenancy ship.
Funny, Blackstone is also actively seeking 5 Billion for it’s China Buyout fund, seen better deals eh?
4 large plots of land have just found owners in Shanghai’s popular High Tech industrial District of Zhujiajiao which is also a
famous travel destination for it’s historic water towns.
The biggest transaction there was a 107′000 square meter plot of land selling for around 825 Million Rmb or approximately 7650 Rmb per square meter.
Bought by Shanghai Jiu Qing Real Estate which is a developer focused in the area of Qingpu.
The three other plots were as followed
68860 square meters to the City owned conglomerate SCS Group (the guys building about everything in the city) for 520 Million Rmb or about 7550 Rmb per square meter.
83926 square meters to Haibo Xijiao Logistics at about 1803 Rmb per square meter for a total of 227 Million Rmb and
25797 square meters to Shentong Express China’s answer to FedEx for 59 Million or 1134 Rmb per square meter.
The neat developement that is Ferguson Lane on Wukang Road near Tai’an Road in the French Concession has expanded already last year by taking in the Residential Mansion in front of Franck and convert it into a modern Gallery Space.
Now it has continued on it’s way to become a major French Concession Destination by acquiring the Real Estate Hotel (actual name really was this, since the owner was the Real Estate Bureau of Shanghai) and added 5 Floors of Office Space over 3300 square meters, and a grand first floor flag ship Restaurant, 2nd Floor Cocunut Paradise and top Floor Cocktail Bar.
Ferguson Lane is a Hongkong Shanghai Creative, upper class developement, housing boutique businesses, creative and financial companies as well as some fine Dining Restaurants.
Commercial Space in Ferguson Lane is for lease here.
News and Trends about Shanghai’s Hot Real Estate Market
Stay Tuned