City on the move

Adam Main

The central government has implemented numerous measures in an attempt to cool down the mainland's red-hot property market and yet prices continue to rise.

In the first seven months of this year, the National Bureau of Statistics of China reported investment in mainland real estate was up 28.9 per cent over the same period last year, with July prices in 70 major cities up a record 7.5 percentage points over the same month a year earlier.

And despite warnings of a bubble, prices are going to get higher, according to experts.

Sam Crispin of Crispin Property Investment Management in Shanghai, predicted that mainland property prices would double within five to seven years.

With property in the big-three cities - Beijing, Shanghai and Guangzhou - becoming more expensive, secondary cities such as Tianjin were increasingly attracting investors' attention. In the first half of this year, Tianjin properties were up 6.3 per cent compared with the same period a year earlier, according to city government statistics.

As one of four provincial-level municipalities in the country along with Beijing, Shanghai and Chongqing, the 10.4million-population Tianjin is repositioning itself as a major port centre where the local government wants the service sector to account for 45 per cent of its GDP by 2011.

'Tianjin is going through a shift in its positioning so it is moving up the rungs of Chinese cities,' says Mr Crispin. 'The new mayor [Dai Xianglong] is making a big difference in setting it up as a financial centre of China. The Tianjin Economic-Technological Development Area (Teda) has always been a very successful economic development zone and big investment from companies such as Airbus will make a huge difference to how the rest of the world looks at Tianjin.

'There will certainly be a lot of interest in looking at opportunities there. Whether it manages to deliver some investment growth property, we will have to wait and see. But it comes at a lower price than Beijing, it is within easy reach of the capital (112km) and a new railway linking Tianjin and Beijing will make a huge difference.'

With Airbus' decision to set up a manufacturing operation in Teda, the Tianjin Jones Lang LaSalle office reported that this will likely bring an influx of 150 expat families to the area for two to three-year stays. Expats working for other global companies will increasingly follow suit.

Anna Kalifa, head of research for the real estate giant's Beijing operations, reported 10,678 apartments and 715 villas were anticipated to come on the Tianjin market in the second half of this year. The sales price in the first half of the year for the city's overall market increased 16 per cent year-on-year to 5,819 yuan a square metre.

'Leasing demand is largely focused on downtown serviced apartments and peripherally located villa and townhouse communities,' said Ms Kalifa. 'The villa and town house communities are generally located to the east of central Tianjin and in relatively close proximity to international schools.'

The Tianjin branch of Savills Property Services has a pair of exciting luxury projects coming onto the market in Emperor Place and Tianjin Chateau. Emperor Place is a mixed-used property in the Nanjing Road business area. It features a six-star hotel, office and retail space, and about 300 serviced apartments of 80 to 300 square metres. The main units will be 80 to 150 square metres with an average price of 18,000 yuan a square metre.

Tianjin Chateau is an impressive project in the CBD with good views of the Hai River. The property features 16 penthouses of 400 square metres each and 360 serviced apartments.

Singapore-based Keppel is preparing to launch The Arcadia, a luxury villa development about 12km from Tianjin centre. The development features 168 units with plot ranging from 320 to 600 square metres with gross floor areas of 300 to 450 square metres. No prices have been released.

Teda Yingbin International Apartments is a project of 189 units in the city's Hexi District.

The serviced apartments, ranging from 120 to 335 square metres, on Zijinshan Road start at 15,000 yuan.

Forte has recently put onto the market Tianjin Centre, a 150,000 square metre complex.

The facility features 369 serviced apartments, a five-star Raffles Hotel, grade-A office space and a shopping mall.

Forte officials said they had sold nearly 100 units in the first phase offering of 289 units featuring studios of 40 square metres, one bedrooms of 80 square metres and two bedrooms of 120 square metres.

Interest among Hong Kong buyers was reportedly strong at 20,000 yuan a square metre.

Forte said the rental yield on the serviced flats would be 10 per cent to 13 per cent, about US$30 to US$35 a square metre per month.

Sean Wong, who runs Tianjin American Investment Management Consulting Services, recommended Fang Zheng Shan Hai Tian and Tishman Speyer's Infinity, as investment vehicles for expats.

Fang Zheng Shan Hai Tian is a mixed-used facility in the southwest of the city, across the road from the Tianjin zoo and water park. The developer is local, but the project has been designed by Hong Kong firm Ho and Partners Architect Engineers and Development Consultants. There are about 30 200 square metre units left at an asking price of 10,000 yuan a square metre.

The US$140million Infinity project features 65,000 square metres of serviced apartments and 10,000 square metre villas.

The apartment units, which should be coming onto the market in the third quarter of next year, range from 80 to 250 square metres and start at 16,000 yuan a square metre. The villas are about 35,000 yuan a square metre.

'The Infinity project is located in the heart of Tianjin along the National Historical Preservation Area. With the world-renowned branding of Tishman Speyer as the developer, the project will only add value to the investment through time,' Mr Wong says.