China should “continue to be relatively unaffected by global economic uncertainty, with strong economic growth and foreign investment continuing,” according to the new Asia Pacific Investment Report by Cushman & Wakefield. The report, in association with the MIPIM Asia property conference to be held in Hong Kong in November, says the RMB is “expected to break 6.50 to the dollar in the next 12 months.”
In the property sector, while developers are currently affected by a
squeeze on financing, the report expects “the pace of development to
continue unabated this year with 2.4 billion sq. m. of residential
space currently under construction and many more projects under
planning.”
Growth in investment transactions is slower in 2008, however, with a
majority of completed transactions with foreign investors being
“offshore share-based transactions, rather than onshore asset-based
transactions.”
The report continues that the risks of investment in China’s real
estate market “are well recognized,” and include: the lack of a
freehold system; a currency that is not freely convertible; the lack of
institutional quality stock; and the lack of market transparency.
However, while foreign investors now understand some of these risks,
and the transparency of the market appears to be increasing, “a rise in
market regulation over the last 12 months has become the new risk for
foreign investors,” Cushman & Wakefield says.
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