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| Industrial Real Estate Capital Floods to Pudong |
May 16, 2007 |
| Foreign investors rush to conduct business in Pudong It is projected that profit of industrial property in Shanghai will be slightly reduced. Although residential housing business in five foreign real estate companies differs, their business in industrial property is surprisingly the same. After the announcement by CBRE and Jones Lang LaSalle to establish a branch in Pudong of Shanghai, Colliers International also shifted their attention to Pudong, a fertile soil for industry. Andrew Hatherley, CBRE managing director of logistics service for Greater China, pointed out that Pudong has been maintaining rapid growth of economy, industry and logistics market. With more foreign and domestic companies and R&D centers coming to Pudong, industrial and logistics property markets will enjoy huge growth potential. CBRE has established a new branch in Pudong whose major business is industrial real estate. Following this move, CBRE has set up offices to conduct core business in many other cities such as Beijing, Shanghai, Guangzhou, Chengdu, Tianjin and Shenzhen. Meanwhile, Jones Lang LaSalle also made public its establishment of an office in Pudong, which is mainly charged with industrial real estate business. According to informed resources, Colliers International is also keeping a close eye on the Pudong industrial real estate market. After 16 years of development, annual growth rate of Pudong GDP has been more than 20 percent, significantly contributing to Shanghai as the seventh provincial-level region whose GDP has reached more one trillion RMB. Thanks to Pudong sustainable economic growth, its real estate market has been prosperous these years, which has triggered the foreign and domestic companies’ increasing demand for professional housing service, and all the international brokerages are struggling for a bite of the pie of the industrial real estate market. Andrew Hatherley predicted that returns on investment in industrial real estate in Shanghai would be reduced from current 9 to 10 percent to 8 to 8.5 percent in the next year. Despite the falling profit, foreign manufacturers and retailers still have high demand for large-scale industrial and logistics facilities in Shanghai, and Pudong in particular. One important driving force for the development of industrial real estate is the rapid expansion of hypermarkets, which need more logistics and warehousing facilities. Starting from January 1 this year, all the land for industrial use, including logistics facilities, has been sold through public bidding, auction and listing. The insiders said that this move would raise the price of the industrial land, thus increasing the cost of logistics facilities. In the fourth quarter of last year, average price of Shanghai industrial land was RMB 852 per square meters, a 3 percent increase over the previous quarter. http://www.qalex.com/2007/5/16/N44917.html |
China Industrial Real Estate Club Address: Room 803-811 Oriental Plaza No.1500 Century Avenue Pudong 200122 Shanghai China Tel: +86 21 68407631 Fax:+86 21 68407632 Email:info@cireclub.com Web: www.cireclub.com Summit Web: www.ciresummit.com |