China losing its pull factor

PROPERTY buyers are on the prowl for opportunities outside of China, swayed by factors such as a looming supply glut in the Chinese market and ease of entry and deals from distressed assets elsewhere.

Speaking at Hotel Investment Conference Asia-Pacific (HICAP) UPDATE yesterday, STR Global area director for Asia, Jonas Ogren, said: “China will see some 16 per cent increase in their supply over the next three to five years, and while this might look okay or people may say that we can handle and absorb this, what’s interesting is that this supply increase is not evenly distributed over all of China.”

Peter Meyer, managing director, Pacifica Partners said he was calling a temporary timeout on investing in China. “Land prices have moved in the wrong direction and yields have moved the opposite direction. We haven’t been able to make it work.”

He pointed out that other markets like Australia, for example, had similar opportunities, but without the difficulties of execution in China and India.

Regent Hotels & Resorts chairman Steven Pan also observed that deal flow from Japan has been strong, while markets in Europe and the US were currently “trading on the distressed situation”.

– Read more in TTG Asia, May 13

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