Transcript Presentation by - Professional Property Services Limited

China Property Market – an
overview of the Major Cities
Margaret Brooke, FRICS
CEO, Professional Property Services
What is China?
Population of 1.3 billion
150 or more cities of over 1 million people
Rapid GDP growth and demographic
changes over last two decades
Accounts for 4-5% of world trade
Largest recipient of FDI – US$53.5 billion
in 2003
Low cost base, growing services sector
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Major first and second tier cities
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What drives China’s development?
FDI
WTO Membership
Manufacturing and exports
Property development
Auto industry
Technology development
Power and steel
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Construction Boom!
50% of the world’s cement !
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Controlling Demand for Property
Development
Controls on lending to real estate sector
following signs of bubble developing
Incentives to developers of mass market
residential properties
Land use rights disposal by auction
Selected planning/investment controls
Massive infrastructure spending – subject
to reviews to prevent overheating
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Infrastructure developments
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Huangpu Port – Largest Container
Port in Southern China
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Infrastructure 2020 - Shanghai
Shanghai Transport Infrastructure
Pearl Line (Under
Construction)
1
3
1
Yan’ an Road
Pedestrian Tunnel
2
Yan’ an Road
Tunnel
3
Da Pu Road Tunnel
4
Dalian Road Tunnel
under planning)
5
Fuxin Road East Tunnel
(under planning)
6
Wusongkou Road Tunnel
under planning)
1
5
G
8
Metro Line 11
4
(Proposed)
9
C
F
4
Suzhou River
D
10
E
C
E
E
11
Huang Pu River
A
6
B
Metro Line (proposed)
7
Light Railway
(proposed)
6
Yangpu Bridge
4
1
Outer Ring Road
(Under Construction)

2
D
2
North South
Elevated Road
Hong Qiao Airport
5
Nanpu Bridge

Inner Ring Road
Metro Line 2
7
Bridge 5
3under planning)
10
1
6
9
A
Xupu Bridge
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F
G
1
Metro Line 1
3
8
2
B
Pu Dong
Pu Dong
International
Airport
2003 – Economic Statistics (JLL)
Beijing
Shanghai
Population
14.56 million
13.34 million
Transient population
3.08 million
3.87 million
RMB 361.2 billion
RMB 540.9 billion
10.5%
10.9 %
Contracted FDI
US$ 3.27 billion
US$ 10.57 billion
Total retail sales
RMB 191.7 billion
RMB 203.5 billion
16.6%
9.3%
GDP
Growth rate of GDP
Retail sales growth rate
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2004 – Property Market
US$ psm pm
Office Rents/Grade A
Office Vacancy Rate
Office Prices/Yield
Beijing
$20.00
14.5%
Shanghai
$19.10
17.7% / 13.3%
Residential Rents
$2,500/9%
$17.8
$2,455/8.3%
$20.50
Residential Prices
$1,650/8%
$2,350/7.5%
23.8%
18.3%/17.8%
Residential Vacancies
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Beijing - Key Drivers
Administrative capital
Science and technology centre
Centre of higher education
Culture/tourism
Olympics 2008
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Beijing Projects
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Shanghai and the Yangtze River
Delta - Key Drivers
Financial and Commercial Centre
Proactive City Governance
Pudong Development Zone
City Branding
Tourism
World Expo 2010
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Pudong 1990
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Pudong 2003
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Notable projects in Shanghai
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Pearl River Delta (PRD)
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Pearl River Delta – Key drivers
Guangzhou and Shenzhen major centres
Manufacturing and trade centre
Recipient of highest levels of
manufacturing FDI
Excellent external and export links
SEZ and SAR advantages
Tourist attractions
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Some current foreign players
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Shenyang
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Dalian
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Tianjin
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TEDA Industrial Park
Founded in 1984
33 sq.km.
By June 2003, 3651
from 69 countries
registered
15% return on
industrial capital
achieved
Fortune 500 tenants
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Wuhan
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Suzhou
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Suzhou Industrial Park
Land Purchase Price: US$ 20/sqm
Factory Purchase Price: US$365/sqm
Factory Rental Price: RMB 0.60/sqm/day
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Hangzhou
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Chengdu
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Chongqing
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Sustainability
Government is conscious of sustainability issues
and attempting to curb inter-city competition and
encourage more integrated planning and
development
China is a signatory to Agenda 21 and has
strong environmental regulations – strong
implementation is the problem
Difficult to achieve highest standards when so
much needs to be done in central and western
provinces
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Thank you
for your interest
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Professional Property Services Limited