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Foreign private equity marches into China real estate market
Real estate news By Asia Pulse
Sep 18, 2007
It is becoming a trend for foreign private equity funds to invest in Chinese real estate projects, according to a report published by Zero2IPO. Zero2IPO analyst Chu Wanglin holds that three opportunities; the 2008 Beijing Olympic Games, the 2010 Shanghai World Expo and the anticipation for appreciation of the yuan, have boosted the pace of foreign private equity funds investing in China. Due to economic globalization, China?s improved investment environment, and the situation wherby increasing numbers of Chinese real estate enterprises or projects are falling short of capital as a result of the country?s intensified macro control, it is becoming possible for more foreign private equity funds to enter China?s real estate market.
Meanwhile, the country?s huge consumption market and rapid economic growth have provided a large opportunity for foreign private equity funds to invest in China real estate market, Chu noted.
According to Zero2IPO statistics, private equity funds reported 31 investment cases in China?s real estate sector in 2006, with investment involved reaching US$3.037 billion, accounting for 42.5 per cent and 46.6 per cent of the respective total in 2006. Zero2IPO statistics also show that of all investment cases reported by private equity funds in traditional industries in the first quarter of this year, most were reported in the real estate sector in both the number of cases and investment volume, totaling nine such cases, with investment involved reaching US$966 million, accounting for 39.1 per cent and 51.6 per cent of the respective total.
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