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MARCH 2012 |

NEWS JV fund targets China resi By Geoff Hadwick

A new joint venture residential fund set up by China Overseas Land & Investment (COLI) and the Industrial and Commercial Bank of China (ICBC) has raised $230 million for a new US $500 million fund designed to develop new residential schemes in China. The Harmony China Real Estate Fund

II, into which both companies have invested US $40 million in equity, has also been backed by the Dutch pension fund Algemene Pensioen Groep. The Dutch have put a further US $150 million in equity into the fund. ICBC, which is one of the China’s

big four banks, and state-owned COLI, the mainland’s largest developer, fi rst joined forces in March 2010 to set up the original US $286 million Harmony

Flying in | The $500m fund is designed to develop Chinese residential schemes

China Real Estate Fund, which invested in three development projects in Xian, Qingdao and Shenyang. The move is part of a wider trend

towards private-equity fi nance in China as the government ploughs ahead with a clampdown on the bank, bond, equity

and trust market funding route for the property industry. Analysts have been arguing for some

time now that many Chinese property developers will launch their own vehicles to bridge an estimated US $111 billion fi nancing gap in 2012.

German portfolios up China limit

CBRE Germany has reported that transaction volumes in “German residential property portfolios of more than 50 units increased by 44 per cent year-on-year to €6.12 billion (USD $8 billion) in 2011.” “The number of traded residential

units also increased by 27 per cent to around 92,000 units within 194 transactions, indicating that the market for large portfolios of over 1,000 units has regained momentum,” the global agency told OPP. Where were the hotspots? “The demand

for residential units in Berlin was particularly strong,” says CBRE Germany. “The federal capital traded around

€2.3 billion and more than 32,300 residential units last year, which accounts for 37 per cent of the registered investment volumes and 37 per cent of all residential units in Germany.” As a result of the large transaction volumes and high-end development projects in Berlin, the average price per sq m increased to €1,033.” CBRE is convinced that the Euro-

zone crisis is pushing large-scale investors toward “the country’s

Standing tall | Resi portfolios rose fast

stable residential market.” According to CBRE’s Head of Residential Investment in Germany, Konstantin Lüttger, the German residential sector “is regarded as a secure investment at a time when the European sovereign debt market is in crisis and international capital markets are volatile.” Overseas investors came from the

USA (5.7 per cent), Sweden (4.2 per cent) and Austria (3.4 per cent). 37 per cent of all residential units in

Germany. As a result of the large transaction volumes and high-end development projects in Berlin, the average price per sq m increased to €1,033.”

THE CHINESE government has said it will limit mortgage loans for overseas property buyers in an attempt to further thwart them from driving up prices. The nation’s planning agency has

said that it will not approve medium and long-term foreign debt quotas for overseas banks in 2012, if they intend to use such borrowings to fund mortgages taken out by foreigners, according to a statement from the National Development and Reform Commission. Last year, China increased down- payment requirements and mortgage rates on some homes and imposed housing purchase restrictions in about 40 cities.

However, these latest moves will

not have major repercussions say local property experts. “This is actually only going to have a perceivable impact on the mid-to-high end of the market,” says James MacDonald, head of China research for Savills Property Services (Shanghai). “Foreign investors only make up a tiny proportion of the overall China market and are not very active in the ultra high-end or mass market.”


NEWS IN BRIEF Fannie Mae auction set

THE United States’ Federal Housing Finance Agency has approved a giant residential real-estate auction at Fannie Mae (the Federal National Mortgage Association) to help the country’s mortgage giant unload its inventory of 122,616 foreclosed houses. No date has been set yet for the ground- breaking auction but, for the fi rst time, the U.S. regulators are also going to allow Fannie Mae to sell houses in bulk. The test sale also will include pools of non-performing loans. Corporate bidders will have to have at least $5 million in assets to take part in the pilot sell-off and private individuals will be allowed into, provided that they have an income that is greater than $200,000 pr annum.

Portugal bank side-step

DEVELOPERS in Portugal are fi nding new ways “to side-step the banks” and set up new alternative funding systems, as the country’s lending institutions continue to hold back the market says a leading international property agency. Stephen Anderson, managing director of agency Infi nito Real, told OPP that he is starting to see “a few savvy developers off ering an alternative method of funding to avoid the ‘stumbling block’ of acquiring fi nance from the banks.” Creative thinking from the developers is “helping to get the property market moving,” he says. “The idea involves buyers putting down an approximate 30% deposit and then spreading the remainder of the payment to the developer over a period of years agreed with the developer and depending on the client.”

Tamweel profi ts surge

DUBAI mortgage lender Tamweel has reported a four-times increase in profi ts in the last three months of 2011, hinting at a stabilising property market. The fourth quarter yielded AED31 million net income for Tamweel, compared to AED8 million a year previous. Chairman Abdulla Ali Al Hamli said in a statement: “Tamweel is fi rmly back in business ... Tamweel will continue to play a key role in supporting the long-term recovery of the country’s real estate sector.

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