There is a higher chance that China will announce rules this month aimed at curbing foreign investment in real estate. This projection was according to Lin Zheying, deputy director general of the commerce ministry's Foreign Investment Administration.

Seeking to gain from China's real estate market as economic growth fuels demand for offices, shops and homes are the overseas investors including Citigroup Inc., Morgan Stanley and Goldman Sachs Group Inc.

Jun Ma, chief China economist at Deutsche Bank AG said in a June report that several policy-making bodies have expressed concern about foreign investment in the real estate sector as a source of property bubbles.

Foreign investors are entering China's property market by investing in Chinese developers or forming a locally registered entity such as a private equity fund to acquire existing properties.

However, Stanley Chan, managing director of Stanley & Partners Investment Management Ltd., said that overseas institutional investors are planning to sell real estate investment trusts on overseas markets such as Hong Kong and Singapore after acquiring the income-producing properties in China. He said that the return could be much higher than betting on a stronger yuan.

On the other hand, Stephen Coyle, chief investment strategist at Citigroup Property Investors that Citigroup's property unit plans to increase investment in China's real estate market 10-fold to $800 million in the next three years. Citigroup Property Investors will buy office, retail and industrial properties, Coyle said in an interview.

By M. Sese
http://realestatepress.org