Chinese property market accessible through funds

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by Gill Montia

Those taking a worldwide view of property investment may have been tempted by the Chinese market.

Shanghai, for example, is now the eighth largest city in the world and one of its busiest ports, making the city’s property investment potential enormous.

Prices are currently one-third of other global centres such as London, Tokyo, New York and Hong Kong, therefore capital appreciation is set to be huge over the medium to long-term.

However, the market can be a difficult one to enter for all but the most experienced of overseas property investors.

For this reason Property Frontiers, the emerging markets property website, is recommending the property investment funds operating in the country.

Marsha Lu, researcher at Property Frontiers, explains: “Let’s say a foreign fund acquires a building block in China and rents it out locally. Foreign investors can invest in this fund, as an alternative way of involving themselves in the Chinese property sector.”

However, she warns that funds frequently have a seven-year lifecycle so that investors must be prepared for a long-term commitment.

According to Property Frontiers, China’s economic growth has reached or exceeded 10% for four consecutive years while at the same time, the country’s inflation rate has remained low.