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Real Estate Investments in China and India: Big Returns in Big Countries?
Real Estate Investments in China and India: Big Returns in Big Countries?
ULI Germany
1 Macroeconomic environment
5 Concluding remarks
0
96 98 00 02 04 06 08 10
Asia-10 80 74
China 69
70
India 60
60 55
Korea 53
Malaysia 50 47
Indonesia
40
Singapore
30
Thailand
Philippines 20
Hong Kong 6 7 8
10 3 4
Taiwan 2
0
0 100 200 300 400 02 03 04 05 06 07
Sources: IMF, Nat. statistics, DB Research Source: DB Research
USA
China
Spain
S. Korea
France
S. Africa
Thailand
5 Concluding remarks
1500
70
1200
65
900
60
600
300 55
0 50
1970 80 90 00 10 20 30 40 2050 1970 80 90 00 10 20 30 40 2050
Source: UN Population Division
Source: UN Population Division
Smaller
1.2 2.8
households
China
Shortage of
1
supply
Replacement
2
demand
India
Population
2.7
growth
0 50 100 150 0 2 4 6 8 10
5 Concluding remarks
1400 90%
80%
1200
70%
1000
USD billion
60%
800 50%
600 40%
30%
400
20%
200 10%
0 0%
Thailand
Taiwan
Hong Kong
Singapore
India
Japan
South Korea
China
Australia
Malaysia
Source: RREEF Research
Dr. Tobias Just · June 5, 2008 Page 13
3 Commercial real estate
Tianjin Dalian
-Tianjin Bin Hai New District (similar to -Port, trade, industry and tourism city
Pudong in Shanghai) – economic centre in -IT hub and emerging BPO
North China (free trade zone) -Attractive to Japanese investors
-Ground for new financial products
Chengdu -Manufacturing and freight hub
-Target city of Go West Policy Qingdao
-Improving linkages with Beijing -Port, electrical and chemical industry,
-Commercial and economic hub of south
west China and tourism city
-IT, R&D and high-tech industry hub -Attractive to Korean investors
Dalian
Tianjin
Chongqing Qingdao Nanjing
-Capital of Jiangsu Province
-Target city of Go West Policy
Nanjing -Key R&D and industrial city in YRD
-Heavy industry base in southern China
-Large population base and freight center Wuxi -Large supply of skilled workers
Suzhou
Hangzhou Wuxi
Chengdu Wuhan -Manufacturing hub in YRD
Chongqing -Key industries: electronics & IT,
Wuhan
-Economic center of Hubei Province chemical, bioengineering and
-Transportation/distribution hub in central pharmaceuticals
China – linking the east and west China
-Biggest steel industry, expansion into Suzhou
Hangzhou -Major high-tech and manufacturing hub
high-tech
-Economic and political center of in YRD
Zhejiang Province -Proximity to Shanghai
-Improving linkages with Shanghai -Favoured FDI destination
-Tourism and IT city in YRD
700
12
600
500 10
400
300 8
200
6
100
0 4
2000 2001 2002 2003 2004 2005 2006 2007 2000 2001 2002 2003 2004 2005 2006 2007
Sources: JLL, RREEF Sources: JLL, RREEF
5 Concluding remarks
40 40
20 20
0 0
SG HK KR DE MY TH IN CN TW VT PH ID SG HK KR VT DE CN TH TW ID MY PH IN
Transparency improved
JLL real estate transparency index
Though it is much easier to get
good data on Chinese and Indian
real estate markets, the quality
and stability of the data cannot
China
be compared to US or European
standards
2006
Even for some Tier-1 cities it is
2004
difficult to find reliable
India information on vacancy rates,
rents, yields, transaction volumes
etc.
4 3.8 3.6 3.4 3.2
Lower values indicate a more transparent market.
Values between 3 and 4 show a semi to low transparency level.
x-axis is inverted.
Source: JonesLangLasalle
5 Concluding remarks
Six assertions
An international real estate investor MUST
have an opinion on China and India
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