Investors turning to big-city business properties

SHANGHAI - Restrictions on home purchases are spreading to more second- and third-tier cities, increasing the chance capital will flow back to first-tier cities' commercial properties, analysts said on Tuesday.

The central government said it will expand limitations on property purchases to more second- and third-tier cities, where real estate prices saw substantial growth through the influx of speculative money from first-tier cities.

"Due to the restrictions imposed on major cities' residential properties, many small to medium-sized investors in Shanghai municipality, Zhejiang and Jiangsu provinces chose nearby second- and third-tier cities to invest in. Consequentially, we have seen average rents and property prices in these areas surge in recent months," said Vicky Shen, director of DTZ's office department, East China.