Thu, Oct 30, 2003 - Page 11 News List

Chinese real-estate firm arrives to assess prospects

BRICKS AND MORTAR While regulations on both sides of the Strait prevent investments in property, some see China as a possible saviour of Taiwan's real-estate market

By Joyce Huang  /  STAFF REPORTER

Eight leading members of Beijing-based China National Real Estate Development Group (中房集團), led by its chairman Meng Xiaosu (孟曉蘇), yesterday arrived in Taiwan to explore possible business opportunities in the nation's property market.

"China National Real Estate and Far Glory Group (遠雄集團) are expected to discuss cross-strait real-estate cooperation on Thursday [today]," said Tsai Chung-i (蔡宗易), assistant vice president of Far Glory's business management department.

The two real-estate conglomerates, which respectively own 60 billion yuan (US$7.25 billion) and NT$100 billion (US$2.95 billion) in assets, may sign a memorandum of understanding to foster cross-strait exchange, stimulating Taiwan's stagnant property market, Tsai added.

During the first day of their eight-day trip, the Chinese delegation toured the yet-to-be-completed Taipei 101 office building, Neihu Technology Park (內湖科技園區) and Metropolitan Construction Co (大都市建設), a Far Glory subsidiary.

The delegation will visit other residential and industrial properties in central Taichung and southern Kaohsiung later this week, Tsai said.

Metropolitan general manager Hung Chia-sheng (洪嘉昇) said that it is still too early to tell whether China National Real Estate will actually invest here. But if it did, capital inflows from China will help boost the domestic property market, Hung said.

Far Glory chairman Chao Teng-hsiung (趙藤雄), who is also chairman of the Taipei-based Federation of the Real Estate Development Association (建築公會), said he believed Taiwan properties were sure to attract Chinese for both residential and investment purposes.

"Many mainland Chinese, if allowed to emigrate, may also be interested in buying houses here since prices are low," Chao told the Taipei Times recently.

But market watchers are not so optimistic.

"The likelihood of Chinese capital being injected into the local property market is slim," Billy Yen (顏炳立), general manager of DTZ Debenham Tie Leung International Property Advisers (戴德梁行), said yesterday.

China won't allow capital investments to Taiwan, and Taiwan will set up a regulatory hurdles to make it more difficult for Chinese capital to enter the local market, Yen said.

The economic incentive for Chinese investors to bank on Taiwan's real-estate market is also small since the return on investments in Shanghai residential property markets is double that of Taipei's, Yen said, citing DTZ data.

Sharing a similar view, Chang Chin-oh (張金顎), a land economics professor at National Chengchi University, said the local property market, which is highly mature and overdeveloped, may not be too attractive to Chinese investors.

But Chang was optimistic about China National Real Estate's visit here.

"China National Real Estate may only come here to test the waters, but it's a sign of improving cross-strait relations," Chang said.

After Taiwan lifted restrictions to allow Chinese capital to invest in properties here last year, only one deal has been closed by Chinese investors, while many Taiwanese are interested in shopping for houses in Shanghai.

Fu Don-cheng (傅棟成), director of the Mainland Affairs Council's economic affairs department, yesterday attributed the real-estate business imbalance across the Strait to China's tight foreign exchange controls.

"A free outflow of capital from China has not been facilitated yet," he said.

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