'Through train' sparks fresh interest in FTZ property
Cross-border stock-trading plan generates newfound interest in Shanghai free-trade zone as speculators see chance for higher returns
Li Liang was overjoyed last week when he began to be swamped by inquiries about office rent and commercial property available for purchase in the free-trade zone (FTZ) in the Waigaoqiao area of Shanghai.
The manager of real estate brokerage Han Ju was all but certain that the "through train" cross-border stock trading plan had sparked a new round of enthusiasm about property in the FTZ.
"The clients came to sniff, as they believed the scheme was a fresh sign that the FTZ had a bright outlook," he said. "Frankly, I am not sure whether the inquiries reflected real demand."
They believed the scheme was a fresh sign that the FTZ had a bright outlook
Frank Chen, CBRE China's head of research, said office rents surged in the FTZ after it was inaugurated in late September. They peaked at 5.90 yuan (HK$7.40) per square metre a day at the beginning of this year, 180 per cent higher than the average rent before the FTZ was announced in the middle of last year, he said.
Leasing demand softened recently, and the average rent slumped to 4.40 yuan per square metre per day at the end of the first quarter, a 25 per cent drop from the peak.
"The scheme is more than a catalyst," Li said. "Those enthusiastic investors tend to believe that something concrete will happen in the zone that will attract more companies to come."
The through train, which will allow Hong Kong and mainland investors to trade designated stocks in each other's market, was announced on April 10.
Some are convinced that dramatic financial liberalisation in the zone would result.
