Citigroup Inc's property unit plans to increase its investment in the "greater China" real-estate market 10-fold to US$800 million in the next three years as economic growth fuels demand for offices, shops and homes, an executive said.
"We will focus on the eastern part of China to gain from the increasing demand brought by foreign investment inflows in the area," Stephen Coyle, chief investment strategist of Citigroup Property Investors, said in Shanghai yesterday.
The increase applies to "greater China," including Taiwan, Hong Kong and Macau, he said.
Citigroup joins rivals such as Morgan Stanley and Goldman Sachs Group Inc in seeking to tap demand from an economy that grew an average 10 percent for the past three years.
China attracted more than US$60 billion of foreign direct investment last year, with 87 percent going to the coastal Bohai Bay, Pearl River Delta and Yangtze River Delta regions, according to Citigroup.
Citigroup Property Investors will buy office, retail and industrial properties, Coyle said in an interview during a property conference that was held in Shanghai yesterday.
The New York-based unit will also invest in residential projects in "secondary cities" in China where housing prices have more potential to rise, he said.
MEASURES
China's government last month announced a series of measures, including higher taxes and down payments, to cool surging home prices.
Prices in Shenzhen jumped 35 percent from a year earlier in the first quarter, while in Beijing prices climbed 15 percent, according to data from the two city governments.
Citigroup is interested in China's real estate market because the economy's "incredible" growth is raising incomes and driving demand for industrial, retail and office property, Coyle said.
China's economy expanded 10.3 percent from a year earlier in the first quarter, accelerating from 9.9 percent last year.
"Industrial markets in China will be particularly attractive," he said. "China is the manufacturing engine of the world and will continue to be for many years to come."
Class A office yields, meanwhile, are 7 percent in Shanghai, compared with 4.5 percent in the US, 4 percent in London, 3.5 percent to 4 percent in Hong Kong and 3.5 percent in Tokyo, according to Coyle.
The yield is the annual rent expressed as a percentage of the sale price, and Class A is the highest grade.
"Clearly, it is a very high yield for a rapidly growing market and which will likely be the number one or two financial center in Asia within a decade," he said.
Coyle said he expects yields in China to decline.
Citigroup Property Investors, an arm of the world's biggest financial services company, manages more than US$7 billion of real estate assets worldwide on behalf of clients and itself.
The US$800 million investment target is "conservative," said Remy Chan, Shanghai-based head of markets at Jones Lang LaSalle Inc, a US real estate consultant.
TIME NEEDED
Still, as a latecomer to the China market, Citigroup needs "time to get familiar with the domestic market and find the right targets," he said.
Citigroup spent US$50 million to buy a 75 percent stake in Shanghai-based developer Yongxin Group last year, according to a report by real-estate consultant Colliers International.
Coyle declined to comment on individual investments involving China.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the