China’s Commercial Real Estate Dips

Tycoon Finds Opportunity In China Property Slump – Wall Street Journal via Real Estate Bloggers – Jonathan Cheng – 19 August 08

…Mr. Lo’s newest investment vehicle, China Central Properties Ltd., has spent roughly $700 million in the past year acquiring at least a dozen big real-estate projects left unfinished by cash-strapped developers. He predicts even more opportunities over the next year as China’s commercial real-estate market struggles through one of its most difficult patches in the past decade. Other big-name investors who see the same favorable situation are investing billions in distressed real estate…Since China’s real-estate market began to slow late last year, Mr. Lo and a growing number of foreign funds and cash-rich domestic developers are finding opportunities all around…some cities in China’s southern provinces see outright slumps…prime properties in key second-tier cities that were unattainable last year are now on the table, and even boasting favorable terms — from flexible deal structures to discounts of as much as 30% from peak valuations…But Mr. Lo sees the overall trends of urbanization, strong economic growth and higher disposable income overcoming market difficulties. “I’m happy about the outlook for the market,” he says…

When it comes to commercial real estate problems, the U.S. takes gold and the U.K. and China fight it out for the silver.