3.7bln foreign capital flows into Shanghai property market
According to the “2006 Shanghai Finance Stability Report” issued by the central bank, in 2005 some 3.763 billion US dollars of foreign capital flowed into the property market in Shanghai, increasing by 40% over 2004. Among the four major types of foreign capital flows, a large proportion went to the group of people who were not Shanghai local residents and spent their money directly buying real estate.
Although Chinese government had issued a regulation on limiting foreign capital’s access to domestic property market, foreign capital still kept flowing into the Shanghai property market. Many foreign-fund management companies are enthusiastic about using their money to buy office buildings or luxury apartments in Shanghai.
On July 24, a month after the central government published related regulation on limiting foreign capital¡¯s activities in China, the Hopson Group announced that it had sold all the shares of the Hopson International Mall to the Pacific Delta Investments limited at a total price of 300 million US dollars. The Hopson International Mall is located in the finance and trade area in Lujiazui. Two months later, the Genting Berhad Group in Malaysia announced that they had controlled the Changshou Commerical Plaza in Shanghai by the acquisition of the Rich Field Group at a price of 572.7 million Hong Kong dollars.
“The short-term changes in the investment market will cause investors to make some adjustment. However, for the long-term investors are still optimistic about the property market in Shanghai,” said Zhang Zhenpin£¬ president of the Colliers International Group.
His words showed that the regulation might affect their investment activities for a short period. However, it won¡¯t change their long-term investment prospect.