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Chinese ready for $12bn buy spree
FLORENCE CHONG THE AUSTRALIAN MARCH 06, 2014 12:00AM

ST Escape. Commuters beneath skyscrapers at Canary Wharf in London?s Docklands business district in the Borough of Tower Ham...
Chinese developer Greenland Group has obtained a 3700sqthm site at London’s Canary Wharf, where it will build apartments. Picture: Supplied Source: Supplied

MORE than $US11 billion ($12bn) is expected to flow out of China and into property worldwide this year with the $63 million purchase of the TAB building on Sydney’s city fringe the latest in a rash of local deals.

Auswin TWT Developments, the Sydney-based arm of a mainland Chinese family company, has purchased the property and plans to develop 250 apartments on the site. The company, which develops in China and Singapore, also has projects in St Leonards on Sydney’s north shore. The appetite of Chinese investors for offshore real estate has surged from $US8bn in 2012.

US research firm Real Capital Analytics found that in Europe Chinese investors spent a total of €3.05bn ($6.7bn) in 2013 - up from €978m in 2012 while in North America investment surged to about $US2.5bn last year from less than $US500m in 2012.

Despite the sharp increase, Chinese investment globally was still modest, compared with the total global capital flow into property of $US550bn last year, according to Alistair Meadows, Jones Lang LaSalle’s Singapore-based head of international capital group, Asia Pacific.

“Chinese capital will become a permanent feature of the global real estate markets,” Mr Meadows said.

Chinese funds were from several sources - sovereign wealth funds; state-backed Chinese institutions such as insurers; high-net-worth individuals and real estate developers.

Yolande Barnes, head of world research with London-based Savills, said the biggest international property buys of last year were dominated by Chinese names.

Among the buyers were Hong Kong-listed Chinese groups: China Overseas Holdings, Evergrande Real Estate Group and China Resource Land.

“You look at the sellers and you’ve got JPMorgan, Goldman Sachs, Prudential, GE and CBRE Investors. The old world institutions are sellers today,” Ms Barnes said.

The catalyst for the dramatic rise in Chinese outbound investment has been the introduction of the Chinese government’s “go global” policy, which has enabled and encouraged offshore investment from all sectors of the Chinese economy during the past 18 months.

The latest change came last May when Beijing relaxed rules restricting investment by insurance companies, allowing them to buy real estate overseas.

Marc Giuffrida, CBRE executive director, capital markets, based in Singapore, estimated that Chinese insurance companies alone have up to $US14bn to spend on overseas property.

The first insurer to venture offshore was Ping An, which bought the Lloyds Building in London last year for £260 million.

Chinese investment would take another step up this year with a number of deals already struck in January, Mr Meadows said.

JLL was involved in Greenland Group’s purchase of the Ram Brewery site in Wandsworth, southwest London. The Chinese developer also has plans to build apartments on a 3700sq m site in Canary Wharf, London’s financial district. The combined end value of the two projects is £1.2 billion ($2.2bn).

Greenland is planning a 70-storey apartment block in central Sydney and has a $US1bn investment in a central Los Angeles mixed-use development.

In London, China Investment Corp has agreed to buy the Chiswick Park business estate, west London, from Blackstone for £800m.

And also in January China’s richest man, Wang Jianlin, founder of Dalian Wanda, unveiled plans to invest up to £3bn in regeneration projects in Britain.

Mr Meadows said Dalian Wanda has bought commercial real estate, development land in the US and Sun Seekers luxury boat business, also in the US.

China’s largest developer, China Vanke, has formed a joint venture with Tishman Speyer Properties to undertake the construction of two condominium towers in San Francisco, on the US west coast.

Mr Giuffrida said Chinese developers and investors could no longer get the same returns in their home market.

A dollar invested on the Shanghai or Shenzhen stock exchanges three years ago was now worth 8 per cent to 25 per cent less, Mr Giuffrida said.

In contrast, the NAREIT Real Estate Index rose 8.5 per cent across the same period.

“Global property is providing the returns which they can’t get at home.”

Mykolas Rambus, Singapore-based founder and chief executive of Wealth X, a research group on the world’s ultra high net worth individuals, said China was at the beginning of a second wave of wealth creation.

Unlike the first wave, when wealth was generated from property development/investment and manufacturing, the second wave would come from entrepreneurs owning successful technology and services companies (such as online merchant Alibaba, valued at more than $US150bn).

“If you are a manufacturer in China and have made a lot of money, it may be wise to diversify to other geographies. They start with property because it is their passion and it is also a comfortable investment for individuals,” Mr Rambus said.

“It is a necessity, then, for them to look at multi homes, not just for leisure’s sake, but for risk mitigation.”

China analysts familiar with domestic politics told The Australian that life could be dangerous for the very rich in a communist country.

Policies could change quickly, and wealth and ostentatious consumption were frowned on.

“If a Chinese businessman has made $30m, he will almost immediately want to get at least $10m out of the country,” said a Hong Kong-based China analyst.

According to Wealth X, China has the second-highest number of billionaires in the world after the US. China’s 157 billionaires have a combined net worth of $US384bn. This does not include the many thousands of ultra high net worth Chinese who have more than $US30m.

“The Chinese investors are targeting core office assets in gateway cities,” said Mr Meadows, adding that capitalisation rates in London and New York were between 4 per cent and 5 per cent.

But Chinese investors were prepared to pay a price to invest in these markets.

Cap rates in Sydney and Melbourne were 1-2 per cent higher and while they might not be global gateways Chinese investors were still interested because of the relatively higher yields, Mr Meadows said.

CBRE’s Mr Giuffrida said Chinese buyers were also fanning out to secondary locations: Manchester and Birmingham in Britain; Frankfurt and Munich in Germany; Houston and Seattle in the US.

In Australia, they were looking beyond Sydney and Melbourne to other capital cities and regional cities.
I wonder how the build quality of their buildings will be like Big Grin

And if their property market crashes back home, these developers will just disappear with investors money Big Grin
Looks like Chinese company investing quite a lot in London?
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Economic fears tipped to drive new wave of Chinese investment
TURI CONDON THE AUSTRALIAN MARCH 22, 2014 12:00AM

Chinese demand.Chinese demand. Source: TheAustralian
Luxury across continents 3:09
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From the extraordinary Deepedene in Sydney, to the opulent Maxwell Court in Toorak, and a fantasy apartment for sale in Rome on Properties of the Week with Prue Miller.
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Chinese demand.Luxury across continents
TIGHTENING credit conditions and uncertainty over the economic outlook in China will drive another wave of Chinese money into Australian real estate, says former investment banker Bill Moss.

Fears of a wealth tax in China would also push investment offshore. “Money flows out every time you have a problem in a domestic economy,” he said.

Mr Moss, who spearheaded the Macquarie Group’s move into apartment development in China in the mid-1990s, predicted housing affordability would grow in political prominence in Australia.

However, foreign investment also brought benefits, he said. “On one side, more construction stimulates the economy, with construction having one of the biggest multiplier effects, particularly in creating jobs.”

State governments would reap benefits in stamp duty while investment would also flow into commercial and industrial property and the hotel and tourism sectors, which had been hard hit after the global financial crisis.

In the housing sector, heavy offshore investment created a false market, operating outside the fundamentals of local demand and supply. “It’s a house of cards,” Mr Moss said.

Chinese buyers spent $5.4 billion on Australian residential property last financial year, according to investment bank Credit Suisse. In a report earlier this month, the bank estimated 18 per cent of Sydney’s new apartments and homes were sold to Chinese buyers, while in Melbourne the figure topped 12 per cent.

Chinese buyers spent $24bn on Australian housing during the past seven years, according to Credit Suisse, which forecast they would purchase $44bn during the next seven years.

The bank expects the investment to flow deeper into the Australian economy. “As long as Australia remains open for business, we expect our companies should also benefit from the next stage (of Chinese investment).”

Developers, building material companies, banks and property websites would see Chinese investment. “We don’t discount the possibility of a Chinese entity taking over one of these companies,” the bank said.

Mr Moss, who has called on state governments to levy an extra 5 per cent stamp duty on foreign investors in a bid to ease housing affordability, expects to see more wealthy Chinese investors.

Most mainland Chinese purchases of Australian residential property have been under $1 million, Mr Moss said. However as more sophisticated investors sought to move money out of China, funds would flow into luxury residential, and commercial and industrial real estate.
Lure of the land has Asian buyers kicking Meriton’s tyres, says Triguboff

TURI CONDON THE AUSTRALIAN APRIL 19, 2014 12:00AM

Founder of Meriton Apartments Harry Triguboff. Picture: Nikki Short Source: News Limited
LARGE Chinese building companies wanted to buy prolific apartment developer Meriton for its extensive land bank, according to its billionaire founder Harry Triguboff.

Last month, ahead of Mr Triguboff’s visit to Guangzhou, The Weekend Australian revealed the veteran developer would hold talks with Chinese groups interested in buying the company he established 50 years ago.

Yesterday, he said discussions had been held with mid-tier listed Chinese builders, though he declined to name them. “I am of great value to them — I have all the land,” Mr Triguboff said.

Meriton owned sites that could house 11,000 apartments, he told The Weekend Australian in March.

Mr Triguboff said he planned to buy even more land.

“I’m bullish and cautious at the same time,” he said of Sydney’s surging residential market.

The company produces about 2000 apartments a year and earns about $350 million annually in rent from apartments.

Mr Triguboff said Meriton was worth about $6.25 billion, but he was not keen to sell the company.

“We are considering it, and they are considering it — it’s a long way off.”

Mr Triguboff was born in the Chinese city of Dalian.

Sources said talks had been held over the years with listed Australian developers Stockland and Mirvac Group to purchase Meriton. Mr Triguboff said his company had become too big for Australian groups to buy.

His talks with potential Chinese buyers come as the parliamentary inquiry into foreign investment in residential real ­estate begins taking submissions.

The inquiry, headed by Liberal MP Kelly O’Dwyer, will investigate whether foreign investment is directly increasing the supply of new housing and bringing benefits to the local building industry and its suppliers; and how Australia’s foreign investment framework compares with international experience.
Triguboff mulls $3bn offer from China

John Stensholt
608 words
17 Apr 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.
Billionaire Harry Triguboff, born in a White Russian Jewish enclave in China, has spent 50 years building ­Australia's biggest unit company, ­Meriton Apartments.

But now, aged 81, Australia's fourth-richest person is considering selling half of Meriton to Chinese interests in a deal that could net him at least $3 billion. It would be the ultimate sale of Australian apartments to ­Chinese investors.

Triguboff told AFR Weekend he re­ceived an offer for his business on a trip to China two weeks ago from the owner of a property developer that builds 200,000 dwellings there annually.

"I am thinking I could sell part of [Meriton]," Triguboff said.

"It is very early stages, but I could be prepared to sell the development part of the business and then the family could continue to collect the rent on the units I already own. Maybe I could retire soon and they could run the investment business."

He says the company, which carries little debt, is now worth about $6.3 billion after his wealth was valued at $4.95 billion on the 2013 BRW Rich List.

Meriton, Triguboff says, will make about $300 million profit from unit sales of about $1.1 billion this year and the company's land bank for future developments has "easily" gone up $200 million in value in the past 12 months.

The potential sale to the Chinese developer, who Triguboff would not name, would comprise of the existing developments that are under way.

The rental business makes about $200 million profit each year, Triguboff said, from the 2000 units he owns in Sydney, Brisbane and the Gold Coast. That business would stay in family hands and is worth up to $3.5 billion.

Triguboff has mostly built in Sydney and said house prices there have "stabilised" and that better growth was being experienced in Brisbane, albeit off a relatively low base.Condition on sale

Any move to sell would be a marked shift in strategy for Triguboff, who has famously said for decades he had little interest in ever retiring. He said his daughters had never shown real interest in taking over Meriton but that he now has a grandson, Michael, working for him who could potentially head the investment business the family would continue to own.

However, Triguboff cautioned that any sale would only take place if the Meriton sales business remains intact.

"I am not selling anything if they are going to start firing people," he said.

"Other people think about shareholders, well, I think about my people. I don't look at it if it is a good or bad deal, I am looking at the evolution of the company. He [the potential buyer] wants apartments that are able to be sold. Of course there are many Chinese buying in Australia at the moment and what we have is a lot of apartments that already have a lot of approvals. That is why they are interested in me."

Triguboff said Australia would be "silly to be afraid of the Chinese" in terms of investment, but warned foreign property developers could lose interest in investing in Australia if project approvals continued to unfold at a slow place.

"They do want to be in Australia because it is safe for them, but they can go anywhere they like if they do not make the money here they want. The planning is still too slow here."

What we have is a lot of apartments that already have a lot of approvals. That is why [the Chinese buyer is] interested in me. Harry Triguboff


Fairfax Media Management Pty Limited

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Joseph Zaja at home with Chinese whispers
KYLAR LOUSSIKIAN THE AUSTRALIAN AUGUST 28, 2014 12:00AM

Joseph Zaja. ‘Buying new apartments stimulates the economy.’ Picture: Britta Campion Source: News Corp Australia

JOSEPH Zaja is preparing to move offices. It has been less than five years since he and his Chinese business partner started Ausin, a company that helps wealthy Chinese buy Australian property, and the business is recording phenomenal growth.

Ausin represents three of the most recognised residential developers in Australia — Mirvac, Lend Lease and Stockland — ­selling property through a network of offices in China, as well as offering property management and immigration services.

In the past six months, Ausin has seen a 300 per cent increase in demand for its services, Zaja says.

Zaja had his start a long way from the booming Chinese property investment market. “My parents immigrated here, they didn’t have a good social network of very successful business people, and I had to work hard to establish myself,” he says.

He completed an applied fin­ance degree at the University of Western Sydney before getting a job at MLC, where he worked on behalf of a number of wealthy businessmen.

He decided going to work for one would be advantageous, and persuaded some to take him on for free. He began to get paid after six months, and eventually went to work managing serviced apartment and industrial estates.

While in China for a conference, he met his business partner, who was already selling Australian property to Chinese investors. It was 2007.

“He was already selling property on a small scale in Shenzhen, and I saw an opportunity in an emerging market. I didn’t realise how big it would be until much later,” Zaja says. It took several years to work out the details, and Ausin was born in 2009.

“Our first client was Lend Lease, we had to walk in there and they said, ‘Who are you guys?’

“Now we have scale, we’re expanding our business into other services.

“We were selling thousands of properties to mainland Chinese buyers, we had a strong relationship with them so we decided we’d do some work on significant investor visas.

“We started a finance division two years ago. Now we have around $500 million in loans.

“Our property management arm, which we didn’t have two years ago, will grow to about 1000 properties (in Australia) by the end of the year.”

Even with the phenomenal growth, Zaja says he is careful about which projects he takes on to sell, and he doesn’t use agents. “We need to know who is buying, it’s a big risk for us, so all our sales staff are employees,” he says. “If it’s an immigration client, they’ll buy one (property), but if it’s a high-net-worth investor they buy more. It’s about the relationship. One has purchased eight to 10 apartments per year for the last 10 years, and he pays for it all in cash.”

Zaja is also cautious about which developers he works with. “A lot of local companies have ­limitations on pre-sales to overseas buyers as part of their internal risk structure, so I wouldn’t sell any more than 30, 40 or 50 per cent,” he says.

“Offshore groups don’t have the same restrictions, as they are ­financed. They come in from everywhere, but have no experience in Australia.

“They might build in Kuala Lumpur and Singapore, but what’s their experience in Australia? They don’t have any.

“You have to assess who they are, what their capabilities are, or if they are staying for the long term.

“If they’re not, I wouldn’t represent them,” Zaja adds, pointing out that in most instances he’ll have to rent the apartments he’s selling.

“I would say 70 per cent of our buyers are investors. It’s my responsibility to say why we can’t rent their apartments, so I’m extremely cautious.”

Questioned about the impact of foreign buyers, Zaja is emphatic. “There’s this misconception that you go to an auction and out of 20 people 16 are Asian, and they must all be overseas buyers. They are not.

“My parents went through the same kind of thing when Euro­peans were coming here last ­century. People thought that the ‘wogs’ were coming to buy everything.

“Buying new apartments stimulates the economy. Without it, the Melbourne apartment market would be in a lot of trouble, it would completely collapse.”

He says Chinese buyers look at Australia to avoid the economic manipulation in China.

“The Chinese government has a masterplan, so they can speed things up or slow things down. And with an oversupply in a lot of cities — not Shanghai or Beijing, but many of the others — they’ve been pushing prices down, putting restrictions on construction funding.

They have recognised over­development and are doing the right thing.

“But that means some cities have been badly hit. One of our ­clients has seen the value of his property in China fall between 15 and 20 per cent, and that’s not unusual.”

Zaja says Ausin won’t be capital raising as it expands, but it already has a specialist property fund and will be spinning off several others.

“We can sustain 1000 sales a year and we’ve just sent people to look for property in Western Australia, and we’ll sell a lot more in Brisbane because it’s a lot less expensive than Sydney and Melbourne,” he says.
Chinese snap up 50 dairy farms
THE AUSTRALIAN OCTOBER 16, 2014 12:00AM

CHINESE investment is flooding into Australia’s dairy industry, with four multi-million-dollar mega-deals in progress that are likely to see Chinese state-owned companies taking big stakes in all Australia’s largest dairy farming operations.

In western Victorian, about 50 dairy farmers between Colac and Mount Gambier have signed individual option deals to sell their farms, worth a collective $400 million, to a secretive ­Chinese-dominated dairy conglomerate being put together by Tasmanian-based property developer Troy Harper.

The 50 farms together run 90,000 cows producing 500 million litres of milk a year, about one-twelfth of Victoria’s total milk supply.

The plan is for the newly aggregated farms to boost their milk production by at least 50 per cent, to supply two new consortiums-owned processing plants to be built in western Victoria that would process and export $700m worth of prized infant milk formula into China and other global markets.

Mr Harper, who describes himself as a private equity facilitator through his company Linear Capital, would only reveal that the Chinese part-owner of the massive new dairy venture was a “major dominant state-owned Beijing-based player” in the food industry, with established brands, trading might and retail power.

He declined to name the Chinese company — there is speculation it is the dominant COFCO Group, China’s largest food processing, manufacturer and trader, or its listed subsidiary China Food — or to name the other global and Australian investors who took up the other 49 per cent of the as-yet unnamed new dairy behemoth.

But Mr Harper said the full extent and details of the deal would become clearer in the next two days. “We have partnered with a major group out of China; this is about putting together a new way of doing things, building a global business and getting a better deal for farmers,” he said yesterday.

“They were looking to try and find a piece of the industry and restructure it so it worked for them; we were asked to (assemble an entity) to supply to the scale of 500 million litres of milk a year; it has taken eight months but we have now concluding (buying) our farms.”

The new business will be Australia’s largest dairy farming company, five times bigger than the large Van Diemen’s Land Company (VDL) in northwest Tasmania, which the state-owned Chinese Investment Corporation came close to buying last year for more than $200m.

It was also confirmed this week that VDL is once again in play. The Australian understands Mike Guerin, a former Elders boss and the former chief executive of VDL until he suddenly resigned early this year, is putting together a group of investors with a Chinese company contributing 51 per cent, to buy VDL’s 19,000ha, 25 farms and 18,000 milking dairy cows owned by NZ’s Plymouth District Council.

Mr Guerin would not comment yesterday. Also in Tasmania, Landmark Harcourts has assembled 12 dairy farms around the Smithton area collectively for sale for $120m.

Landmark property director John Hewitt, who returned last week from China where he was marketing the “North West Dairy Aggregation” cluster to ­potential Chinese bidders, said he had realised last year that no Chinese corporate bidders wanted to talk about property purchases of a scale smaller than $100m.

His cluster of farms, all located close together, runs 12,000 cows producing 60 million litres of milk annually. “The main barrier is not that they are tyre kickers or not interested, but that they only want to spend more than $100m and typically prefer a 51 per cent joint venture deal,” Mr Hewitt said.

Linear Capitals’ Mr Harper said yesterday all his western Victorian farm purchases were locked in, the investment money committed and processing plants already on the drawing board.

He also confirmed the company is also in discussions with the state government to lease the 120-bed former Glenormiston agricultural college at Mortlake as part of the deal, to use as a dairy training and educational facility.

But Farmer Power, the western Victorian rebel dairy group, fears the plan is to fly in Chinese dairy workers on low wages and 457 visas, use Glenormiston as their training and accommodation base before being dispatched to work on the outlying southwest Victorian farms.

Mr Harper promised that local farmers would be the beneficiaries of the Chinese conglomerate deal, as the new company seeks to improve productivity on its farms and builds two new processing facilities.

But for rival dairy processors with factories in the area such as Saputo-owned Warrnambool Cheese & Butter factory at Allendale, Murray Goulburn’s dairy processing plant at Koroit and Fonterra’s Cobden plant, the locking up of the 50 farms with their 500 million litres of annual milk production by the Chinese corporation would lead to a drastic shortage of milk supply.

“I wouldn’t call it a disruption, but a redistribution of milk supply; western Victoria was the only place we could aggregate this number of farms together for the amount of milk needed,” Mr Harper said.
China overseas investment almost doubles
AFP OCTOBER 17, 2014 1:45AM

China's overseas investment almost doubled year-on-year to $US9.79 billion ($A10.59 billion) in September, the government says, again exceeding incoming funds even though they recovered from multi-year lows.

Foreign direct investment (FDI) - which excludes financial sectors - into China came in at $US9.01 billion for the month, the commerce ministry said, up only 1.9 per cent year-on-year but a significant improvement on August's $US7.20 billion, which was the lowest since July 2010.

China has been actively acquiring foreign assets, particularly energy and resources, to power the world's second-largest economy, with firms encouraged to "go out" and make overseas acquisitions to gain market access and international experience.

Overseas direct investment (ODI) was up 90.5 per cent in September, and officials have said it could exceed FDI this year.

For the first nine months total ODI stood at $US74.96 billion, up 21.6 per cent, with FDI at $US87.36 billion, down 1.4 per cent.

Over the period, Chinese investment into the European Union soared 218 per cent to $US9.0 billion, the ministry said.

It leaped 150 per cent into Japan, while also going up 69.7 per cent into Russia and 19.5 per cent into Hong Kong, the ministry added, without giving totals.

It was up 28.2 per cent to $US3.95 billion into the US.

Ministry spokesman Shen Danyang attributed the rapid growth in ODI to "strong market forces" - China's need to invest abroad and demand from destination countries - along with policy support from Beijing and foreign governments.

"We believe China's overseas investment and co-operation will maintain a fast development momentum in the future," he said.
"Because of the encouraging policy of the central government for private enterprises to go global, the overseas investment is expanding," the government's spokesman on trade says.

In June, the central government issued a new policy helping to speed up the approval for overseas investment.


Chinese investors still ambitious
Matthew Cranston
698 words
23 Oct 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.
Dalian In a magazine at a hotel in the northern Chinese city Dalian, there is a map charting the city's district, not much bigger than Brisbane.

In the ensuing 30 pages, there are 240 residential projects advertised for sale, eight to a page, each in a separate box like the betting table for a game of roulette.

After crunching a few sums, it hits you that you are looking at more than $120 billion in residential developments or about 20 times Lend Lease's Barangaroo project in Sydney.

A typical project is the 350,000 square metre Golden Sea with more than 3500 apartments spread over a few dozen high rise towers. They have all been built and are now for sale at $1500 pa square metre (roughly 40 per cent of the average annual income of a Dalian resident).

The sheer scale of development in ­Dalian, and the risk associated with it, is unfathomable for many Australians.

Even experienced developers are blown away by its enormity.

Brisbane developer Don O'Rorke, who sold a Gold Coast property development to Chinese group Golden Horse Nine Dragon Lake Holdings, has recently travelled throughout China and was astounded at the growth and scale of development.Bogans don't know

"If you are unaware of the sheer scale and speed of the Chinese developments, then you are now considered a bit of a bogan," O'Rorke says.

"Their capacity to bring about such massive supply is amazing. Their presence in Australia and ability to speculatively build hundreds of apartments will no doubt have an impact on our market and local developers."

These massive Chinese developers are already on their way, with local Dalian developer Wanda, owned by China's second richest man, having already committed $1.7 billion to the Australian real estate market.

In an interview with the Development and Reform Commission of the Dalian government, there is mention of more expansion overseas.

"Because of the encouraging policy of the central government for private enterprises to go global, the overseas investment is expanding," the government's spokesman on trade says.

"Many enterprises from Dalian have begun to invest in other countries, including Australia."

In June, the central government issued a new policy helping to speed up the approval for overseas investment.

But when developers start to head offshore to find new markets, questions are inevitably raised about whether their own markets have cooled. There are most definitely some signs of this.City of lights

At 6 o'clock at night, the lights of the apartment towers in Dalian tell an interesting story.

In these seemingly endless ­mini-Manhattans, towers are fully lit and occupied. Then you can see the towers where there is a haunting absence of light, except for a few floors or a solitary red beacon on the top level.

Trying to work out the vacancy rate in Dalian, which was one of the first 14 ­Chinese cities to be opened to the outside world in 1984, would seem a fool's game.

Trying to establish the level of available supply would also seem fraught, and working out demand even more difficult, considering the influence of a socialist government that automatically takes over the ownership of the apartment 70 years after purchase.

Regardless of all these moving parts, not to mention the problems with the country's impaired loans (former US Treasury secretary Tim Geithner is now wheeling and dealing in this market), there are plenty of stakeholders who want to keep building big in China.

The vice-director of the Economic Development Bureau of Dalian Puwan New District, Sha Yankan, is waiting on final approval from the central government to build $18 billion worth of infrastructure for a new city north of Dalian. It is one of 10 similar plans throughout China, and Sha Yankan is confident it will proceed. "The central government will support this and the central bank will give priority loans," he says.

And with all that can be seen so far in China, it's hard to resist believing him.

The author is in Dalian, China, as a fellow of the Asia Pacific Journalism Centre.


Fairfax Media Management Pty Limited

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