Shanghai's overheated property market may seem risky and expensive for local developers and small-time investors but for major foreign institutions with deep pockets, the party is still going on.
A property unit of Morgan Stanley on Wednesday completed the purchase of a major office and commercial complex in downtown Shanghai, taking its spending in the city, on three projects, to US$350 million in six months.
According to city newspapers, it is close to signing a deal equal to the total for all three for Tomorrow Square, one of the city's newest skyscrapers, where a three-bedroom serviced apartment commands a steep US$5,700 a month. Company officials declined to comment on these investments.
Institutional investors continue to be bullish on Shanghai's property market, even while retail investors from Hong Kong and Taiwan have turned more cautious and speculators from Wenzhou have sold out and invested elsewhere.
Foreign financial groups, in particular, continue to be able to raise funds from interested investors worldwide to go on a shopping spree while local players have to watch from the sidelines.
Morgan Stanley is typical of the foreign institution betting that the tight supply and heavy demand in Shanghai's A-grade office market will continue and believes that commercial space is safer than residential.