NewBlackRock looking for bargains in China as economy cools
Asset manager sees opportunities for investment in China as economic slowdown takes toll but rules out HK on risks from higher interest rates
BlackRock, the world's largest asset manager, says it is time to actively look for real estate opportunities in the mainland as the economic slowdown takes its toll, but cautions against investments in Hong Kong because it is too early in the interest-rate cycle.
John Saunders, BlackRock's head of Asia-Pacific real estate, said Hong Kong prices would come under pressure as US interest rates rose.
He forecast housing values would drop 15 to 20 per cent, although he did not specify a timeline for the price decline.
In contrast, China's property market looked more attractive, as downward pressure on the economy was beginning to squeeze some of the weaker players.
"The downturn in China is nothing new. It has been going on in the last two years, at least," Saunders said.
As the economy slows and sellers are more willing to trim prices, he said "it makes sense that it becomes quite an interesting market for us".
China's factory production and fixed-asset investment in the country were both weaker than expected in August, triggering concerns full-year economic growth will be less than the targeted 7 per cent.