Mainland property seen warm next year
Veteran dealmaker says new leadership's push to make urbanisation its top priority will bring demand for real estate back into play
The mainland's property market is expected to bounce back next year, propelled by the new leadership's push to make urbanisation its top priority.
That is the view of top China dealmaker Frank Tang, chief executive of FountainVest Partners, a China-dedicated private equity firm partly financed by Singapore's wealth fund Temasek.
Tang said the real estate business will "turn warm" next year, particularly in second- and third-tier cities on the mainland.
"We see that real demand from locals who want to buy their first home in many mid-sized cities, for example, in Henan province, is continuing to grow," said Tang, who co-founded FountainVest with three other bankers about five years ago.
Before FountainVest, Shanghai-born Tang held senior positions in Temasek and Goldman Sachs in Asia. He helped the two firms strike several landmark deals in China, including Temasek's investment in China Minsheng Banking, the mainland's sixth-largest bank by assets.
"The situation in second- and third-tier cities is very different from coastal cities where you may see more buying of properties for investment and even speculation," he added.
FountainVest is a shareholder of Hong Kong-listed Central China Real Estate (CCRE), a major private property developer in northern China. FountainVest invested in CCRE shortly after launching its first private equity fund, worth nearly US$1 billion, in late 2008 at the height of the global financial crisis when the legendary Wall Street bank Lehman Brothers declared bankruptcy.