5 June 2007

GRI Members Size Up China’s Real Estate Market


GRI Members Size Up China’s Real Estate Market

Global Real Estate Institute (GRI) members were decidedly bullish about Chinese real estate at the organization’s Beijing event on Wednesday. Members from locations as diverse as Dubai and Turkey gathered at the Westin Hotel to discuss the opportunities and obstacles that the Chinese real estate market presents. Most agreed that China’s real estate market is poised for continued growth in the short and long term, citing the hype surrounding the 2008 Beijing Olympics and the rapid development of 2nd and 3rd tier cities as causes.

While GRI members were united in their optimistic outlook for Chinese real estate, they offered differing approaches to navigating the market. Many see Chinese real estate as an opportunity for a quick investment turnover. “The overwhelming sentiment of investors is getting their money out of the country,” said Ahmet Kayhan of Reidin.com, an information services company. As a possible explanation, Kayhan pointed to a knowledge gap. “There is much interest in 2nd tier cities, but not much information,” he explained.

Other foreign investors view Chinese real estate as a long term prospect. Three years ago, Robert Welanetz of Chia Tai Commercial Real Estate relocated to Shanghai from the state of Georgia, in order to gain from China’s rapid economic growth. “We are only now in the early stages with incredible growth in all sectors,” Welanetz commented. “The second phase of development will be better positioned for China’s actual demand. Later, we will see even more investors consolidating properties into large portfolios,” he concluded.

Although most GRI members in attendance had a personal stake in Chinese real estate, first-time China visitor Cevad Toprak of Korfez Real Estate in Turkey, simply wanted to learn more about the market. “China is a very big country and foreign capital comes to China because there is such a huge population,” said Toprak. Toprak agreed that China presents a great investment opportunity, but said that he is currently focused on attracting capital to his native country.

While GRI members are attracted to the economic opportunity that Chinese real estate presents, they also see a large potential for the market to benefit from GRI’s presence. Charlie Nixon of Reidin.com says that GRI’s involvement in China is a “sensible partnership” and will create a more transparent market. “Any time you bring in an organization of GRI’s caliber, that will naturally lead to best business practices,” commented Nixon. Nixon summed up the feeling of GRI members at the event, saying, “The real estate market is still booming. Now is the time to develop.”

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