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Foreign investors in Shanghai shackled by restrictions (Sept 2, 2009)

SHANGHAI: Local investors are more aggressive in seizing opportunities compared with foreign investors who are shackled by various restrictions in 2Q2009, according to a report by an international real estate organisation.

In fact, some foreign investors are keen to offload their real estate portfolios during the same period, according to the Asia Pacific Real Estate Investment Market Bulletin 2009 by Colliers International. These include Carlyde, Morgan Stanley and HKR International who have put their projects – Zhongfang Forrest Villa, Chateau Pinnacle and Chelsea, respectively, up for sale.

The market was also reportedly muted then, chalking up only two transactions of note – sales of Yueda Huangpu Riverside Mansion and City Apartment.

This was against a backdrop of already-permissive real estate investment policies and a steady renminbi exchange rate.

While the central government has already lowered the equity ratio requirement for real estate investment to 30% from 35%, in effect helping to reduce capital requirements for developers acquiring land, the bulletin says it would be unlikely that property taxes will be imposed in 2009 due to technicalities.

Similarly, the central government has denied it intends to relax restrictions against foreign investment in real estate given the drop in foreign direct investment, making this proposition unlikely in the short term.

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