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12-07-2014, 12:04 AM
Blackstone favors industrial realty
By Cai Xiao (China Daily)Updated: 2014-07-11
Selective options to help PE giant tap investment opportunities in sectors like mobile Internet
Global alternative asset manager Blackstone Group LP likes commercial and industrial real estate in China and regards residential property as less interesting, its chairman and CEO told China Daily on Thursday.
"Industrial warehouses in China are very interesting, and are set to benefit as Internet and retail sales increase," said Stephen Schwarzman. "So are office buildings and shopping centers."
Schwarzman, in Beijing to attend the fifth annual US-China Consultation on People-to-People Exchange, said Chinese residential real estate has the potential for volatility and regards it as "the least interesting in the nation's real estate sector".
He added that real estate markets vary across China. "The imbalance of China's real estate among different classes and regions is interesting," said Schwarzman.
A decrease in value of some real estate assets and the shortage of credit from banks have created opportunities for Blackstone to purchase good assets from developers and other sellers.
Schwarzman said his company specializes in buying very large properties, as liquidity and capital can be difficult for some competitors, but these conditions provide a terrific advantage for Blackstone to buy at favorable prices.
"The long-term prospects for the Chinese real estate market are quite good, but it's normal in a certain period of time for the value of some properties to go down and at some time later to become stable again," he said.
Schwarzman said China is still growing very quickly compared with most other countries, and mentioned that some people seem overly concerned about China's growth.
"The perception of China's slowing economy can keep other investors away, and we look at the same situation and think that's an opportunity," he said.
Schwarzman said that if a country undergoes economic reforms, many business opportunities will be generated, and so it goes in China.
He said that his company has just finished a deal in China's healthcare sector but declined to release the name.
Blackstone Group LP, with Chinese technology consulting and outsourcing firm Pactera's CEO and other managers, took that company private last October in a deal in which Blackstone paid $539 million.
"There are many good opportunities in China, and you have to be selective," Schwarzman said. "For instance, the mobile Internet brings revolutionary changes to the world, and the situation is more obvious in China".
By March 31, Blackstone had $272 billion in assets under management, and its net profit in 2013 totaled $3.5 billion.
Blackstone Group acquired Hong Kong-listed Tysan Holdings on Jan 3, paying HK$1.64 billion ($211.5 million) for 65.5 percent of the shares. It increased its shares in the property developer on Jan 7-8 to 71 percent.
In addition, Blackstone purchased 40 percent of Szitic Commercial Property Co Ltd, one of China's largest shopping mall developers and operators, SCP said in November.
To cope with China's growth surge, as much as $2.5 trillion may need to be spent on land and warehouses over the next 15 years.
According to Jeff Schwartz, co-founder of Global Logistic Properties Ltd, the biggest foreign builder of logistics facilities in China, "over the next 15 to 20 years, the real cost of building warehouses is going to be staggering."
That has drawn the attention of private equity firms like Blackstone Group and Carlyle Group LP as they seek to benefit from an anticipated investment boom.
http://www.chinadaily.com.cn/business/20...720164.htm
________________________________________________________________________________________________________________
Jinan opens doors to property buyers
By Mu Chen (chinadaily.com.cn)Updated: 2014-07-11
The eastern Chinese city of Jinan on Thursday became the latest region to lift home purchase restrictions, local media reported on Wednesday.
The change extends to both locals and outsiders, and marks the definitive end to the policy that has limited home purchases in the Jinan real estate market for over three years, according to Qilu evening newspaper
Locals and outsiders can now purchase properties in the provincial capital of Shandong regardless of how many homes they already own.
As part of the policy, locals with two homes or more, outsiders with one home or more, and those who could not provide proof of income tax or social security payment were prevented from buying homes in the city.
Earlier, Jinan City Construction Committee had announced on July 3 that it was investigating possible adjustments to the city's restrictive home purchasing policy in order to promote the healthy and steady development of Jinan's real estate market.
Over the past couple of months, more than 10 cities nationwide have lifted or eased bans on ownership of more than one home, imposed in early 2011 to cool the market. At that time, more than 40 cities made use of the limits along with other measures, including higher mortgage rates and bigger downpayments on second homes. Three years ago, high home prices were among the top complaints of urban residents.
Xu Chuanming, marketing director of Hopefluent Group Holdings Ltd (Shandong), said a cooling real estate market hurts economic growth and fiscal revenue.
"It's quite natural for local authorities to lift the limits to help the property market," said Xu.
The real estate sector has been a major driver of growth over the past decade. Revenues from land sales are a major source of income for local governments, accounting for about one third of total fiscal revenue. In some regions, the percentage can be above 50 percent.
This revenue slumped 15 percent in the second quarter of the year. In cities such as Beihai, Kunming, Hohhot and Ningbo, the decline is more than 50 percent.
Jinan exemplifies of the current housing market. Sales in terms of floor space in Jinan declined more than 30 percent in the January-May period and prices dipped 0.4 percent in May, the first month on month decline since June 2012. Nationwide, housing sales declined 9.2 percent year on year in the first five months, and half of 70 major cities reported month on month declines.
"Poor sales mean developers have taken a cautious approach to land purchases and falling revenue has driven governments to lift the restrictions," said You Fang, an analyst with WorldUnion Properties.
In the long run, China should continue to curb speculation in the housing market to let the economy avoid excessive dependence on the real estate sector, said Li Tiegang, head of the property research center at Shandong University.
Although many cities reported month on month declines in housing prices, those declines are small, said Li. "The authorities should tolerate some fluctuations in prices. They should not adjust policies for small ups and downs," he said.
Once the economy picks up, house prices could rebound, which will do no good for the long-term health of the property market, said Li.
After the scrapping of purchase limits, the government should impose a property tax in more regions to curb speculation and build more affordable housing, he said.
Xinhua contributed to this stroy.
http://www.chinadaily.com.cn/business/20...722545.htm
By Cai Xiao (China Daily)Updated: 2014-07-11
Selective options to help PE giant tap investment opportunities in sectors like mobile Internet
Global alternative asset manager Blackstone Group LP likes commercial and industrial real estate in China and regards residential property as less interesting, its chairman and CEO told China Daily on Thursday.
"Industrial warehouses in China are very interesting, and are set to benefit as Internet and retail sales increase," said Stephen Schwarzman. "So are office buildings and shopping centers."
Schwarzman, in Beijing to attend the fifth annual US-China Consultation on People-to-People Exchange, said Chinese residential real estate has the potential for volatility and regards it as "the least interesting in the nation's real estate sector".
He added that real estate markets vary across China. "The imbalance of China's real estate among different classes and regions is interesting," said Schwarzman.
A decrease in value of some real estate assets and the shortage of credit from banks have created opportunities for Blackstone to purchase good assets from developers and other sellers.
Schwarzman said his company specializes in buying very large properties, as liquidity and capital can be difficult for some competitors, but these conditions provide a terrific advantage for Blackstone to buy at favorable prices.
"The long-term prospects for the Chinese real estate market are quite good, but it's normal in a certain period of time for the value of some properties to go down and at some time later to become stable again," he said.
Schwarzman said China is still growing very quickly compared with most other countries, and mentioned that some people seem overly concerned about China's growth.
"The perception of China's slowing economy can keep other investors away, and we look at the same situation and think that's an opportunity," he said.
Schwarzman said that if a country undergoes economic reforms, many business opportunities will be generated, and so it goes in China.
He said that his company has just finished a deal in China's healthcare sector but declined to release the name.
Blackstone Group LP, with Chinese technology consulting and outsourcing firm Pactera's CEO and other managers, took that company private last October in a deal in which Blackstone paid $539 million.
"There are many good opportunities in China, and you have to be selective," Schwarzman said. "For instance, the mobile Internet brings revolutionary changes to the world, and the situation is more obvious in China".
By March 31, Blackstone had $272 billion in assets under management, and its net profit in 2013 totaled $3.5 billion.
Blackstone Group acquired Hong Kong-listed Tysan Holdings on Jan 3, paying HK$1.64 billion ($211.5 million) for 65.5 percent of the shares. It increased its shares in the property developer on Jan 7-8 to 71 percent.
In addition, Blackstone purchased 40 percent of Szitic Commercial Property Co Ltd, one of China's largest shopping mall developers and operators, SCP said in November.
To cope with China's growth surge, as much as $2.5 trillion may need to be spent on land and warehouses over the next 15 years.
According to Jeff Schwartz, co-founder of Global Logistic Properties Ltd, the biggest foreign builder of logistics facilities in China, "over the next 15 to 20 years, the real cost of building warehouses is going to be staggering."
That has drawn the attention of private equity firms like Blackstone Group and Carlyle Group LP as they seek to benefit from an anticipated investment boom.
http://www.chinadaily.com.cn/business/20...720164.htm
________________________________________________________________________________________________________________
Jinan opens doors to property buyers
By Mu Chen (chinadaily.com.cn)Updated: 2014-07-11
The eastern Chinese city of Jinan on Thursday became the latest region to lift home purchase restrictions, local media reported on Wednesday.
The change extends to both locals and outsiders, and marks the definitive end to the policy that has limited home purchases in the Jinan real estate market for over three years, according to Qilu evening newspaper
Locals and outsiders can now purchase properties in the provincial capital of Shandong regardless of how many homes they already own.
As part of the policy, locals with two homes or more, outsiders with one home or more, and those who could not provide proof of income tax or social security payment were prevented from buying homes in the city.
Earlier, Jinan City Construction Committee had announced on July 3 that it was investigating possible adjustments to the city's restrictive home purchasing policy in order to promote the healthy and steady development of Jinan's real estate market.
Over the past couple of months, more than 10 cities nationwide have lifted or eased bans on ownership of more than one home, imposed in early 2011 to cool the market. At that time, more than 40 cities made use of the limits along with other measures, including higher mortgage rates and bigger downpayments on second homes. Three years ago, high home prices were among the top complaints of urban residents.
Xu Chuanming, marketing director of Hopefluent Group Holdings Ltd (Shandong), said a cooling real estate market hurts economic growth and fiscal revenue.
"It's quite natural for local authorities to lift the limits to help the property market," said Xu.
The real estate sector has been a major driver of growth over the past decade. Revenues from land sales are a major source of income for local governments, accounting for about one third of total fiscal revenue. In some regions, the percentage can be above 50 percent.
This revenue slumped 15 percent in the second quarter of the year. In cities such as Beihai, Kunming, Hohhot and Ningbo, the decline is more than 50 percent.
Jinan exemplifies of the current housing market. Sales in terms of floor space in Jinan declined more than 30 percent in the January-May period and prices dipped 0.4 percent in May, the first month on month decline since June 2012. Nationwide, housing sales declined 9.2 percent year on year in the first five months, and half of 70 major cities reported month on month declines.
"Poor sales mean developers have taken a cautious approach to land purchases and falling revenue has driven governments to lift the restrictions," said You Fang, an analyst with WorldUnion Properties.
In the long run, China should continue to curb speculation in the housing market to let the economy avoid excessive dependence on the real estate sector, said Li Tiegang, head of the property research center at Shandong University.
Although many cities reported month on month declines in housing prices, those declines are small, said Li. "The authorities should tolerate some fluctuations in prices. They should not adjust policies for small ups and downs," he said.
Once the economy picks up, house prices could rebound, which will do no good for the long-term health of the property market, said Li.
After the scrapping of purchase limits, the government should impose a property tax in more regions to curb speculation and build more affordable housing, he said.
Xinhua contributed to this stroy.
http://www.chinadaily.com.cn/business/20...722545.htm
Research, research and research - Please do your own due diligence (DYODD) before you invest - Any reliance on my analysis is SOLELY at your own risk.
