China - Commercial Real Estate & REITs

[winston]

This is starting to become a major risk so I'm starting a new thread to track this issue.

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Beijing Seen Vacant for 50% Commercial as Chanos Predicts Crash

Feb. 12 (Bloomberg) -- Jack Rodman, who has made a career of selling soured property loans from Los Angeles to Tokyo, sees a crash looming in China.

He keeps a slide show on his computer of empty office buildings in Beijing, his home since 2002. The tally: 55, with another dozen candidates.

Rodman figures about half of the city's commercial space is vacant, more than was leased in Germany's five biggest office markets in 2009.

Empty buildings are sprouting across China as companies with access to some of the $1.4 trillion in new loans last year build skyscrapers.

Former Morgan Stanley chief Asia economist Andy Xie and hedge fund manager James Chanos say the country's property market is in a bubble.

Source: Bloomberg

http://www.bloomberg.com/apps/news?pid= ... K__QRxjnQM

[winston]

Welcome To Beijing – A Real Estate Free-For-All Like No Other by Joshua M Brown

I'm not writing this post as a "Short China" thing, but man does this scare me away from building commodities and the related stocks names levered to them...

I've relayed a lot of these stats here already, but this morning I found a really excellent roundup of Chinese real estate bubble signs.

http://thereformedbroker.com/2010/02/21 ... -no-other/

[profittaker]

Army of Shortist Coming to China Asset Market

中国资产市场：“空军”来啦

http://economy.caing.com/2010-02-23/100119554.html

with my clumsy translation below..
---------------------------
After Chanos presented his research in early-Jan, Soros has recently changed his tone on Chinese Property market to cautious, Rogers has become downbeat on Chinese Property market, Chinese government raised bank reserved ratio.

The bubble is true, but it may take few years to burst, hence it is probably too early to go into short position. Some other catalyst are needed to trigger the burst.

[winston]

Not vested

DJ MARKET TALK: UOBKH Positive On China Commercial Property Plays

1043 [Dow Jones] UOB KayHian expects there will be growing interest in China commercial property plays because the sector is a shelter from the intensifying policy risks in the residential sector; it adds home purchase restrictions have channelled buyers from the residential to the commercial sector, supporting capital values.

It prefers stocks with high exposure to the commercial sector, exposure in the tier-1 cities, particularly Shanghai and Beijing, as the tier-2 cities suffer from ample supply but demand is untested.

It likes SOHO China (0410.HK) given its strong presence in tier-1 cities; it also likes GZI REIT (0405.HK) and Hui Xian REIT (87001.HK) with their respective 2011 yields of 6.8% and 4.5%.

SOHO is down 0.2% at HK$6.52, GZI REIT is flat at HK$4.06 and Hui Xian is down 0.8% at HK$4.87.

Source: Dow Jones Newswire

[winston]

DJ China Shopping Mall Boom Creates Glut, May Lead to Closures - Real Estate Executive By Esther Fung

SHANGHAI--A boom in shopping mall development in China has created a glut in some areas and may lead to closures, a senior executive from Singapore-based Perennial Real Estate said Thursday.

Some malls were built regardless of local market demand, and some are too big, Pua Seck Guan, executive chairman of Perennial Real Estate, said at an industry forum in Shanghai.

In recent years, local governments have been increasingly selling land parcels with requirements to include commercial space, leaving developers without a firm understanding of the market situation struggling with lower-than-expected returns, industry executives said.

Local governments competing with each other for stronger economic growth have propelled land sales and generated the boom in shopping mall development in the past five years, said Mr Pua.

Some developers have been able to sell both residential and office units, but have struggled to find the right tenants for the retail portion of their mixed-use projects, said Mr Pua.

What works for first-tier cities like Shanghai and Beijing won't have the same success in lower-tier cities, he said.

There may only be one or two centers in smaller cities and many consumers there are in the middle or low-to-middle income groups, he said.

"I've seen a lot of malls with top brands at entrances that deter mass market residents from entering. They feel that they don't belong to the place."


Source: Dow Jones & Company, Inc.

[winston]

World's biggest mall a China 'ghost town' By Johan Nylander

New South China Mall in Guangdong Province opened in 2005.

With 5 million square feet of shopping area, the mall can accommodate 2,350 stores, making it the largest shopping center in the world in terms of leasable space -- more than twice the size of Mall of America, the biggest shopping center in the United States.


http://edition.cnn.com/2013/03/03/busin ... index.html

[winston]

Tier-2 Chinese cities facing glut of office space

Source: SCMP

[behappyalways]

青岛大型广场人去楼空太恐怖 萧条如鬼城(高清)
http://www.wenxuecity.com/news/2013/12/11/2855872.html

[winston]

China a mall monster

China, especially Shanghai, has the largest amount of shopping area under construction in the world, a survey by international property consultants CBRE has found.

In fact, eight out of the top 10 most active cities are in China, it said yesterday. CBRE surveyed 180 countries. About 9.8 million square meters of new retail space were opened in 2013 globally and a further 39 million sq m was under construction.

http://www.thestandard.com.hk/news_deta ... 40425&fc=8

[winston]

China’s latest “ghost city” could blow your mind

Source: Bloomberg

http://thecrux.com/forget-what-youve-he ... cking-yet/