Chinese Developers Turn to Commercial Properties, Cushman & Wakefield Says

Chinese developers shifted more investments to commercial properties last year with government curbs on homes, marking the start of an “era” for malls, office and industrial buildings, Cushman & Wakefield Inc. said.

Commercial real estate investment jumped 42 percent last year from 2009, while transaction volume rose 20 percent, according to the world’s largest closely held real estate services company.

“2010 saw the first year of the era of commercial property,” Cushman said in a press release today. China’s retail, office and industrial properties “delivered another year of strong rental growth with healthy demand from both international and local players,” it said.

Investment in commercial properties picked up last year as the government suspended mortgages for third-home purchases and pledged to speed up trials for residential property taxes. In October, the People’s Bank of China increased interest rates for the first time in three years and raised borrowing costs for a second time on Dec. 25.

Government regulation will remain the main challenge for China’s real estate market, Cushman said. Some investors shied away from the residential property market following the real estate curbs, it said.

Date: 13 January 2011 | For the full report, please visit http://www.bloomberg.com