China remains major real estate powerhouse

SINGAPORE: China will remain a major real estate powerhouse even after the Beijing Olympics and despite the backdrop of weaker property prices, according to Hang Lung Properties Ltd.

Chairman Ronnie Chan said the market had been growing very fast in recent years before the slowdown about eight months before the Olympics.

Hence, he said, a long-term players would have to devise ways to overcome the bear market.

“Property is a long gestation industry,’’ Chan said during a session on “Rolling the Dice on Real Estate,’’ at the Forbes Global CEO forum yesterday.

He said the biggest opportunity in China would include the large commercial and retail investments which could still bring in double-digit returns.

On the impact of the US credit crunch, he said there had yet to be a fallout on China and Hong Kong.

“Sooner or later, it (the impact) will reach here but, as long-term players, we are not perturbed.

“China is an opportunity of a lifetime and we are buying land for future projects.’’Hang Lung allocated US$5bil for projects in China and it had already nine projects under way, he said.

Apart from China, Vietnam also provided opportunities, although at a smaller scale, and that property prices had fallen 30% to 40% from their peak in 2007.

“It is like getting into China 10 years ago,’’ said VinaCapital group chief executive officer Don Lam. “For those who missed the first round, it could be time to enter (the Vietnamese market).

“True, there is a liquidity crunch, but for those who plan it right, it may take two to three years,’’ Lam said.

He added that inflation had no follow-through impact in Vietnam where 75% of the population is agriculture based.

VinaCapital is planning its second real estate investment trust of US$500mil, a follow-up from the successful US$800mil earlier.

By The Star