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Tuesday, June 1, 2010

'China, HK real estate retains long-term allure'

HONG KONG: Real estate in mainland China and Hong Kong retains a strong long-term allure despite current fears of a damaging bubble, according to an influential player in the regional market.

Alastair Hughes, Asia-Pacific chief executive of Jones Lang LaSalle, a dominant presence in the Chinese property markets, sees plenty of reasons for optimism.

"For every expat who whinges about pollution, there are 20 people in London who'd like to be here," he said, gesturing out across Hong Kong's famed skyline on a rare clear day in the city.

"I don't think you'd find many people who've made money betting against Hong Kong," Hughes added.
The market for luxury property in Shanghai and Beijing is seen as "a little bit frothy" because of wealthy individuals indulging in speculation, he said.

"On the other hand, you've got everywhere else in China," he said, pointing to the annual migration of 50 million people from the Chinese countryside to cities in search of work and better housing.

As other parts of the world struggle out of recession, property markets in China and Hong Kong have been charging ahead, so much so that Beijing has taken increasingly aggressive steps to rein in the mainland market.

Nonetheless, Hughes says that not only is market "frothiness" confined to the swankiest neighbourhoods, but that the commercial and office sector, where cooler heads prevail, is largely unaffected.

Hong Kong regularly takes a bashing for its polluted air and fares poorly in some international rankings of cities for "liveability", such as those by the Economist Intelligence Unit.

But boosters of Hong Hong real estate point to the sale this May of an elite property on the Peak, known for its majestic views over the South China Sea - weather permitting - for a cool US$233 million (US$1 = RM3.25), to a local tycoon.

For Jones Lang LaSalle, Asia and particularly China look set to remain key growth areas.


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