Hot property

The prosperous northern city of Tianjin has joined Beijing and Shanghai as a hot spot in China's booming real estate industry.

A batch of leading property developers are targeting the city as their next business focus, despite strict industry rules and regulations issued by the government.

Tianjin Binhai New Area is the growth engine. It is China's third special economic zone after the Shenzhen Special Economic Zone and Pudong New District, enjoying national preferential policies.

Its strategic economic position has attracted a score of large-scale investors from home and abroad, setting off a property development fever.

"Tianjin is one of three locations in China that will facilitate local business expansion in the next three years," says Feng Lun, president of Beijing Vantone Real Estate Co Ltd.

Vantone is a leading Chinese property developer targeting the high-end segment. Beijing has been its major battlefield since it was established in 1993. But that changed in 2004 when Vantone began looking at Tianjin, partnering with Tianjin TEDA Group to tap the local real estate market. Now Vantone is a familiar name in the local market.

According to the company's website Vantone expects to develop an additional 15 million sq m per year of residential flooring space in Beijing and Tianjin over the next four years.

Guangzhou R&F Properties Co Ltd is another player with its sights on Tianjin. In 2004, R&F set up Tianjin R&F Properties Co Ltd, with an initial investment of 1.5 billion yuan, and began its first project in the city. Last year it allocated another 5 billion yuan for its second Tianjin project.

"The government's commitment to promoting Tianjin as an economic power in North China is exciting news for all property developers," says Li Silian, R&F's president.

The investment frenzy has pushed up property prices at a rapid pace. According to statistics from the Tianjin Economic and Technological Development Area (TEDA), price increases reached as high as 38 percent year-on-year in 2005 and 25 percent during the January to July period of 2007.

Property sales in downtown Tianjin remain brisk. In 2003, the average residential property price around the city stood at between 1,000 to 2,000 yuan per sq m, but the figure climbed to more than 9,000 yuan per sq m by last November.

"I think the price is unreasonably high, but I am still planning to buy an apartment. Everyone says it will go up," says one commentator on the online real estate portal www.soufun.com.

Industry experts hold the same opinion, saying prices will continue to rise in the near future, fuelled by the strong regional economy, convenient transportation, a land supply shortage and growing disposable incomes among Tianjin residents.

(China Daily 01/05/2008 page10)