Skip to comments.Analysis: Bubble concerns spread to China commercial property
Posted on 10/11/2011 4:22:37 AM PDT by TigerLikesRooster
Analysis: Bubble concerns spread to China commercial property
By Langi Chiang and Charlie Zhu
BEIJING/HONG KONG | Tue Oct 11, 2011 12:49am EDT
(Reuters) - Concerns about a bubble in China's residential property market is spreading to the commercial real estate sector at a time when developers are upping their exposure, and the country's insurance industry is poised to invest huge sums into the space.
While commercial prices are steady and insurance companies are watching and waiting, residential property developers have increased investment into the office sector after Chinese government measures were instituted to cool home prices.
Shimao Property (0813.HK), Country Garden (2007.HK), China Resources Land (1109.HK) and Poly (0119.HK), have been increasing their investment into commercial property. Smaller developers such as Sino-Ocean Land (3377.HK) and Gemdale (600383.SS) are increasing commercial exposure too.
Commercial real estate investment in China will exceed one trillion yuan ($157 billion) this year, up from 740 billion yuan in 2010, as developers have shifted away from the housing market, the target of nearly two years of government measures to cool the sector down.
The investment frenzy into commercial property has also been fueled by expectations of a potentially huge demand from China's insurers, which won approval late last year to invest up to 10 percent of their assets in real estate, most of which was aimed at commercial properties.
(Excerpt) Read more at reuters.com ...
Too much capital flowing too quickly isn’t really a good thing. China popping is a good thing.