According to Yang, the China Insurance Regulatory Commission is expected to allow insurers to invest in infrastructure and real estate soon and is working out the modalities in this regard.
"We expect the guidelines to come out soon. China Life will hire talent familiar with the real estate sector and we are doing the preparatory work in this regard," said Yang.
Industry analysts said it would be good for insurers to invest in the property market, as they can improve their profitability with more investment options.
The sharp fall in the capital markets due to the financial turmoil has put substantial pressure on insurers' investments. China Life saw its total investment return in 2008 falling 61.4 percent from a year earlier, while its net profit drop was about 45.3 percent.
Sunday, March 29, 2009
Tuesday, March 24, 2009
China's property market tipped for revival
Shimao, a Hong Kong-listed property developer, said it had sold two villas in the leafy Shanghainese suburb of Sheshan, one for 250m yuan and the other for 155m yuan.
The price paid for the 40,000 sq ft house is almost double the previous record of 130m yuan. According to Shimao, the house boasts a bowling alley, a wine cellar and access to a private islet.
China's property bubble burst last year, after two years in which prices doubled in some cities. Faced with spiralling prices, the Chinese government clamped down on lending at the end of 2007, requiring borrowers to put down as much as 40pc upfront for second mortgages.
The subsequent collapse left banks holding billions of bad loans and stalled construction, with many property developers freezing their land banks.
The price paid for the 40,000 sq ft house is almost double the previous record of 130m yuan. According to Shimao, the house boasts a bowling alley, a wine cellar and access to a private islet.
China's property bubble burst last year, after two years in which prices doubled in some cities. Faced with spiralling prices, the Chinese government clamped down on lending at the end of 2007, requiring borrowers to put down as much as 40pc upfront for second mortgages.
The subsequent collapse left banks holding billions of bad loans and stalled construction, with many property developers freezing their land banks.
Monday, March 23, 2009
China Real Estate Opportunities - Optimistic on 09
China Real Estate Opportunities Plc:
* Aggregate gross value for the portfolio in excess of 1,022 mln stg at
end-Dec., 2008, up over 61 pct on year.
* Gross rental income increased by 23 pct year on year while average
occupancy in the creo portfolio was 92 pct.
* Well positioned with a low loan-to-value of 45 pct and no immediate facility
* Aggregate gross value for the portfolio in excess of 1,022 mln stg at
end-Dec., 2008, up over 61 pct on year.
* Gross rental income increased by 23 pct year on year while average
occupancy in the creo portfolio was 92 pct.
* Well positioned with a low loan-to-value of 45 pct and no immediate facility
Saturday, March 21, 2009
China Real Estate portfolio hits €1bn
China Real Estate Opportunities (CREO) listed property vehicle, controlled by developers Johnny Rohan and Richard Barrett, yesterday said the value of its property portfolio jumped by 61pc last year to stand at £1.022bn (€1.09bn) at the end of December 2008.
Presenting its preliminary results for the year to end December 2008, chairman Ray Horney said the "CREO portfolio is well rented, whilst finance costs are well controlled and cash is being tightly managed to secure future working capital needs. We face the future with cautious optimism".
Based on an independent valuation of its property portfolio, the increase in net asset value per share works out at 59pc, taking them to £13.24m a share.
Gross rental income increased by 23pc to £26m. Rental income was underpinned by average occupancy rates in the portfolio of 92pc.
Presenting its preliminary results for the year to end December 2008, chairman Ray Horney said the "CREO portfolio is well rented, whilst finance costs are well controlled and cash is being tightly managed to secure future working capital needs. We face the future with cautious optimism".
Based on an independent valuation of its property portfolio, the increase in net asset value per share works out at 59pc, taking them to £13.24m a share.
Gross rental income increased by 23pc to £26m. Rental income was underpinned by average occupancy rates in the portfolio of 92pc.
Tuesday, March 17, 2009
China's Own Version of the Real Estate Bust
If you think this is the latest, depressing tidbit from the historic real estate bust in the United States, think again. The other former global growth engine — China — which saw its own real estate bubble expand in the last five years, has now got its own property market problems — and they're intensifying. (See pictures of Beijing's changing skyline.)
The long-running boom in the construction of new apartments and houses across urban China ended abruptly last year and is now unwinding. Deflation is evident in Beijing and Shanghai in particular, where real estate developers and brokers report prices will likely be down 15% to 20% this year. Prices in the once booming city of Shenzhen are down more than 18% from year-ago levels. Nationwide, according to a recent forecast by economists at the Chinese Academy of Social Sciences, housing prices in China may decline 10% to 15% this year, as the overall economy struggles amidst the global financial crisis. "Housing prices far surpassed the actual incomes of the general public" over the last five years says CASS economist Chen Xigang. "They are now correcting."
The long-running boom in the construction of new apartments and houses across urban China ended abruptly last year and is now unwinding. Deflation is evident in Beijing and Shanghai in particular, where real estate developers and brokers report prices will likely be down 15% to 20% this year. Prices in the once booming city of Shenzhen are down more than 18% from year-ago levels. Nationwide, according to a recent forecast by economists at the Chinese Academy of Social Sciences, housing prices in China may decline 10% to 15% this year, as the overall economy struggles amidst the global financial crisis. "Housing prices far surpassed the actual incomes of the general public" over the last five years says CASS economist Chen Xigang. "They are now correcting."
Friday, March 13, 2009
A cash crunch in China's real estate sector could leave well-funded developers as consolidators
As foreign funding for Chinese real estate dries up in the global financial crisis, developers who were once the darling of overseas investors have had to turn to their home market to meet their financial obligations.
A growing number are preparing various bond and rights offerings, as they seek funds to pay for their aggressive expansion of the last two years.
But many, especially weaker players, may have trouble raising funds from investors wary about a real estate bubble. And developers whose offerings fail could be forced to put themselves up for sale or face potential insolvency.
A growing number are preparing various bond and rights offerings, as they seek funds to pay for their aggressive expansion of the last two years.
But many, especially weaker players, may have trouble raising funds from investors wary about a real estate bubble. And developers whose offerings fail could be forced to put themselves up for sale or face potential insolvency.
Tuesday, March 10, 2009
Chinese urban home prices down 1.2% in February, 3rd monthly fall
BEIJING, March 10 (Xinhua) -- Prices of new and existing homes in 70 large and medium-sized Chinese cities fell 1.2 percent year-on-year in February, the government said Tuesday, the third monthly decline in a row.
The decline was 0.3 percentage points larger than the month-earlier level, according to a joint statement by the National Development and Reform Commission and the National Bureau of Statistics.
Prices of newly built homes in 30 cities fell year-on-year last month, with the southern cities of Shenzhen and Guangzhou recording the largest declines of 16.3 percent and 8.9 percent, respectively.
On average, prices for newly built homes were down 1.8 percent from a year earlier. The decline was 0.4 percentage points larger than in the previous month.
The decline was 0.3 percentage points larger than the month-earlier level, according to a joint statement by the National Development and Reform Commission and the National Bureau of Statistics.
Prices of newly built homes in 30 cities fell year-on-year last month, with the southern cities of Shenzhen and Guangzhou recording the largest declines of 16.3 percent and 8.9 percent, respectively.
On average, prices for newly built homes were down 1.8 percent from a year earlier. The decline was 0.4 percentage points larger than in the previous month.
Wednesday, March 4, 2009
Boost for Chinese Real Estate Industry
The Chinese real estate industry is set to receive a much-needed boost which may include an easing of restrictions on the purchase of second homes, the expansion of funding channels for developers and a further cut in the taxes and fees associated with property purchase in China.
The plan is part of the government’s efforts to keep the country’s economic slowdown at bay. It is busy on a package of plans to revive ten key industries to keep China’s GDP growth above 8% and has already approved similar plans for the steel, textile and car industries. The property industry is one of the biggest drivers of China’s domestic economy. It contributes a quarter of fixed-asset investment and employs around 77 million people, so it is a prime candidate for a lifeline from the government.
The plan is part of the government’s efforts to keep the country’s economic slowdown at bay. It is busy on a package of plans to revive ten key industries to keep China’s GDP growth above 8% and has already approved similar plans for the steel, textile and car industries. The property industry is one of the biggest drivers of China’s domestic economy. It contributes a quarter of fixed-asset investment and employs around 77 million people, so it is a prime candidate for a lifeline from the government.
Tuesday, March 3, 2009
Chinese developers face default risks this year
Property developers are expected to post disappointing results for their 2008 business year and 2009 could be even worse, the rating agency said in a report.
The outlook for the China's real estate sector remains gloomy for the remainder of 2009 given the extremely challenging global economic conditions and a large buildup of inventory last year, it added.
As the real estate market remains volatile in 2009, it will likely see more defaults among developers as many players have tight liquidity, said Fu Bei, credit analyst at Standard & Poor's.
"After a cash-burning 2008, and a good amount of financing coming due in the next 12 months, many companies lack the resources to hold on and consolidation will undoubtedly accelerate," Fu said in the report.
The outlook for the China's real estate sector remains gloomy for the remainder of 2009 given the extremely challenging global economic conditions and a large buildup of inventory last year, it added.
As the real estate market remains volatile in 2009, it will likely see more defaults among developers as many players have tight liquidity, said Fu Bei, credit analyst at Standard & Poor's.
"After a cash-burning 2008, and a good amount of financing coming due in the next 12 months, many companies lack the resources to hold on and consolidation will undoubtedly accelerate," Fu said in the report.
Monday, March 2, 2009
Morgan Stanley’s Chinese Land Scandal
That executive, Garth Peterson, was a star deal maker who had become a powerful figure on the Shanghai investment scene, people knowledgeable about the investigation said. His supervisor, the head of global real estate investing, was placed on administrative leave.
In China, which is struggling to deal with corruption and bribery, the revelation is the latest bit of sobering news after a wild real estate boom suddenly went bust late last year, leaving some of the world’s biggest financial institutions with potentially huge losses.
For Morgan Stanley, which runs one of the world’s biggest real estate funds, it is a black mark on an otherwise sterling reputation. People knowledgeable about the case say that Morgan Stanley has sent both United States and Chinese officials documents indicating that Mr. Peterson, the bank’s highest-ranking real estate executive in China, may have secured some transactions by offering cash or gifts to Chinese officials. His partners in some deals were Chinese government investment funds.
In China, which is struggling to deal with corruption and bribery, the revelation is the latest bit of sobering news after a wild real estate boom suddenly went bust late last year, leaving some of the world’s biggest financial institutions with potentially huge losses.
For Morgan Stanley, which runs one of the world’s biggest real estate funds, it is a black mark on an otherwise sterling reputation. People knowledgeable about the case say that Morgan Stanley has sent both United States and Chinese officials documents indicating that Mr. Peterson, the bank’s highest-ranking real estate executive in China, may have secured some transactions by offering cash or gifts to Chinese officials. His partners in some deals were Chinese government investment funds.
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