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Funding in Shanghai's realty dives

2015-01-16 10:04 Shanghai Daily Web Editor: Qin Dexing

Investment in Shanghai's real estate plunged over 50 percent last year, and the market saw domestic investors taking the lion's share of the deals, global property service provider DTZ said in a report yesterday.

There were 26.1 billion yuan (US$4.2 billion) worth of major real estate investments, or property acquisitions worth more than US$10 million each, transacted in 2014, an annual drop of 54 percent, DTZ data showed.

More than 80 percent of the deals, or 21.18 billion yuan, were sealed by domestic buyers, down 34 percent from 2013. Overseas investors sealed only 18.8 percent of the total, or slightly more than 4.9 billion yuan, a plunge of 80 percent from the previous 12-month period.

Investment took up 75 percent of the acquisition deals concluded in the city last year, while owner-occupier deals made up the rest, DTZ data suggested.

"Office buildings still remained the most sought-after option among investors, taking up nearly half of the transactions sealed during the past 12 months," said Jim Yip, managing director of investment and advisory services at DTZ China. "At the same time, retail and residential properties as well as serviced apartments all fell by both investment value and proportion."

A separate report released by Jones Lang LaSalle predicted more office transactions in Shanghai.

"We anticipate that 2015 will continue to see a large number of office transactions in Shanghai," said Alan Li, head of capital markets for JLL East China.

Li suggested the city's retail market may see stronger transaction volume should suitable assets become available.

Nationwide, real estate investment totaled 106 billion yuan in 2014, down 27 percent from the record high of 145 billion yuan in 2013, JLL data showed.

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