Developers opt to lease offices
THE reduction of land supply in Beijing next year is encouraging office developers to lease instead of sell their already approved projects in anticipation of rising property values - especially in the face of the already acute shortage of supply.
New Rank International, joint developer of the first project in Financial Street, intends to hold and lease its other projects on the same street.
''Seven out of the eight biggest banks of China have set up their headquarters in Beijing, 110 foreign financial institutions have opened their representative offices, and eight major commercial centres of the capital are under construction,'' said New Rank president Liang Ge.
''Naturally, property prices in Beijing will remain at a high level,'' he said, predicting a real-term rental return of 20 per cent for first class offices.
In July, the company and two mainland partners plan to start building Investment Plaza, the first building to be erected on Financial Street.
The target is to make the street into an international financial market mirroring Wall Street.
It is slated mainly for the offices of financial institutions to facilitate the establishment of securities, capital, bullion, foreign exchange, mortgage and commodity markets.
The district is expected to become a multi-functional, well-equipped, national centre for financial administration, clearing and information.
About 20 per cent of the properties on the street - more than 20 buildings with a total floor area of over one million square metres - will be for sale to foreign companies.
It is estimated that more than 100,000 people will eventually work in the Financial Street district.