Deals surge in China

Acquisitions reach $83bn so far this year, with most deals concerning development rights.


China has experienced a real estate investment surge, with $83 billion of acquisitions so far this year.

According to the Global Capital Trends Quarter in Review report released by Real Capital Analytics (RCA) yesterday, some $77 billion of the total relates to the sale of development rights, with more than half of that coming in the third quarter.

In Beijing alone, some 138 plots have traded in 2009 for almost $12 billion. Shanghai has seen $13 billion of title changes in the year.

RCA said more than 100 Chinese companies have done deals for at least $100 million and that the growth is being spurred by government-encouraged relaxed lending along with a spate of IPOs of Chinese property companies.

The research house also pointed out there is already talk of a pricing “bubble” returning to China.

RCA added that new real estate investment from the China insurance sector, which was recently released from regulatory constraints, is expected to follow.  

Among the non-development deals highlighted in the RCA’s research is the sale by Morgan Stanley of Donghai Square in Shanghai to Hong-Kong-based Soho China for $359 million.