Foreign Property News | Posted by Si Thu Aung
The US-China trade war may be harmful to both economies if it is prolonged, but it has created opportunities in the Chinese property market, City Developments (CDL) group chief executive Sherman Kwek said yesterday.
"After the US-China trade war implications started to become real... the Chinese government has started slowly but certainly relaxing property restrictions," he said at a question-and-answer session during a press conference announcing CDL's 5.5 billion yuan (S$1.1 billion) investment in Chinese real estate developer Sincere Property Group.
For example, the Chinese authorities have loosened home purchase and loan restrictions for buyers, as well as raised price ceilings for developers when selling properties, he said.
"It has created opportunities for developers like us to enter the market," said Mr Kwek.
The trade war between the United States and China escalated recently, with the US hiking tariffs on US$200 billion (S$274 billion) worth of Chinese goods.
Nonetheless, he added that a prolonged trade war will hurt all companies in China, and hopes that a trade deal between the two superpowers can be hammered out soon.
CDL's head of strategic investments Sophia Dai added that there may be less impact on the property market in China as it is powered by domestic demand.
"The trade war may have broad implications, but in this sector, we are still cautiously positive," she said, adding that CDL also has confidence in the quality of land banks that Sincere has acquired, such as those in developed regions like the Yangtze River Delta.
The investment amount comprises share subscription and a four-year loan, the allocation of which will be finalised upon completion of the deal.
CDL said the amount is its single largest investment in China to date.
The investment is expected to be completed by the fourth quarter of this year, giving CDL a 24 per cent equity stake in Sincere and making the Singapore company the second-largest shareholder after Sincere founder and chairman Wu Xu.
Ref: Property Report
