Ministry eyes risk of foreign property investment

A rising number of foreign investors are gaining an interest in China's commercial property projects. Some analysts believe such cooperation models will help overseas companies to understand the Chinese market better. They also believe the cooperation will provide a great opportunity for Chinese companies to attain management experience.

Savills Plc, a UK-based real estate adviser, said in a report that a total of 18 commercial property investment deals were reached in Shanghai this year, with a combined value of 26.4 billion yuan ($4.3 billion), of which foreign investment accounted for 86 percent of the total amount, soaring 72 percent compared with the figure for 2012.

This has indicated the recovered confidence of foreign investors in Chinese commercial properties, said the real estate consultancy.

In the report, Savills said the rising foreign investment in China's commercial properties showed foreign investors are bullish about the country's first-tier cities' commercial property projects over the next five years.

James Macdonald, head of Savills China research, said: "Shanghai's office market remains one of the most transparent, stable markets in China for commercial property investment.

It is expected to continue attracting attention from both domestic and international investors."

Regarding the rising investment in China's property market by foreign developers, Shen, the Ministry of Commerce spokesman said next year it will continue guiding foreign investment in the property sector in a reasonable manner, take corresponding measures to deal with new issues and beef up monitoring on cross-border investment and financing activities.

"MOFCOM will regulate investment in the property sector and lead foreign investment into elderly-care services, tourism and education properties," Shen added.

According to him, the ministry will guide and require local commercial regulators to closely watch commercial property projects involving foreign investment. Together they will study the trends and impact on logistics of the shift of foreign investment in industrial properties and ramp up protection against any possible risks.