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HONG KONG: Investment in mainland China property fell 12.5% to US$24.9 billion (RM80.7 billion) in the second quarter (2Q), dragged lower by a fall in land sales, growing difficulty in sourcing capital and a slowdown in the economy, according to property consultancy DTZ.
But the decline in land sales compared with the previous quarter was counteracted by a surge of interest in acquiring prime commercial properties, DTZ noted.
Total land transactions dropped 15.7% quarter-on-quarter (q-o-q) to US$22.83 billion, but total sales of completed properties rose by 47.9% to US$2.11 billion.
All properties sold in 2Q were in Beijing or Shanghai.
“Clearly, investors are increasingly attracted to investment opportunities provided by acquisition of core commercial assets, permitting them to reduce risk by achieving the security of immediate rental returns,” it said.
Investment in residential land slowed during the quarter, with the total value of transactions dropping 9.2% q-o-q to US$10.17 billion.
The total transaction value for development sites earmarked for mixed use purposes was US$7.72 billion, down 17.4% q-o-q, while industrial land investment declined 49.4% to US$534 million.
Another property firm, Colliers, remains upbeat about mainland property investment.
“The total investment volume is forecast to pick up in the short term. Interest in acquiring prime commercial properties will remain keen, while developers continue to actively replenish landbanks in light of the still positive conditions in the residential market,” it said. — South China Morning Post
This article first appeared in The Edge Financial Daily, on August 2, 2013.
