E-House China shares rise on strong Q2 revenue outlook

BANGALORE, May 19 (Reuters) - Chinese real estate services company E-House China Holdings Ltd (EJ.N) posted a quarterly profit that handily beat market estimates, helped by a recovery in real estate transaction volumes, and forecast a strong second-quarter revenue, sending its shares up 13 percent.

For the second quarter, E-House expects revenue to be between $49 million and $51 million, above analysts' average estimate of $38.3 million.

"The outlook not only reflects the rebound in the (Chinese) market, but also the fact that E-House's partners, the developers, are specifically doing well," said Lazard Capital Market analyst Colin Sebastian, calling the outlook "strong."

test

Massive fall in property sales in Asian real estate markets

The Asian property investment market suffered a massive fall in the first quarter of 2009 with Japan, Singapore and Hong Kong suffering the most.

The region experienced an 83% quarter-on-quarter fall in sales, according to the latest research from property consultants CB Richard Ellis.

Asia's industrial property sector underwent the largest drop by market segment, plummeting 95% from the same quarter a year earlier. This was followed by office and retail property transactions which slid 89% and 40% respectively.

Singapore experienced further declines in investment sales in the first three months of the year with only a few isolated transactions. Analysts said that potential buyers and investors are adopting a wait and see attitude.

How To Invest In Chinese Real Estate

11 Reasons to Buy Chinese Real Estate

1. Because inflation is coming (see article)
2. There is ZERO property tax in China!
3. There is ZERO capital gains tax in China!
4. Foreigners are free to own Chinese real estate
5. The US Dollar is getting weaker
6. Because there are no attractive alternative investments in the US without significant risk
7. With a huge Chinese population, real estate prices are extremely stable
8. China is a cash-based economy. USA is a credit-based economy. This makes China real estate extremely stable.
9. This investment can be self-directed in an IRA or 401(k) account
10. Asia is a huge growth opportunity (see article)
11. Even buying US property at low prices does not guarantee safety.

China Real Estate Stirring?

For months and months and months and months, my law firm had not been involved in a single China commercial real estate deal. Not one. Sure, we assisted a foreigner or two in buying (or selling) a condo in which to live, but nothing at all on the investment front. Now, just in the last month, we are in the midst of a number of such deals (for a number of clients old and new) and

I read the news and the news says commercial property (retail, office, industrial, etc.) is not selling in China. And I know all real estate is local, but our new deals are in cities where the news clearly applies.

All of our new deals involve foreigners taking out very very long term leases (rather than "buying") office buildings in need of renovation in great locations. All of these deals involve fairly small buildings (certainly small by China standards) owned by Chinese developers who want out. Our clients are small to mid-sized foreign developers who have their "own people" standing by to do the work necessary to renovate and upgrade these buildings (for between $3 and $8 million) and all of them have already lined up some foreign businesses who want to move in.