A property analyst advised caution yesterday amid growing media speculation over potential investments in the local real estate market by a group of visiting Chinese tycoons.
Despite the media’s attempts to paint a rosy picture of prospective Chinese investments, Kristy Huang (黃郁琪), director of CB Richard Ellis Taiwan’s (CBRE) institutional investment properties division, said that Chinese capital has yet to be injected into Taiwan.
“[Chinese investors] may have problem securing enough loans from local banks to fund their investment projects here unless they have enough capital of their own,” Huang told an American Chamber of Commerce in Taipei (AmCham) gathering.
The main source of capital inflow that could give the local property market a boost will still come from European and US investors, who have invested early on in Taiwan, or from Hong Kong and Malaysia, she said.
“It all depends on whether [Chinese investors] can offer valuable collateral to secure enough bank loans given the tight credit environment,” Huang said. “Chinese capital won’t be the mainstream source of potential capital injection for the time being.”
For example, the chances of Chinese investors winning in the upcoming auction of Agora Garden (亞太會館) hotel in Taipei’s Xinyi District (信義), with a floor price set at NT$14.9 billion (US$492 million), is slim, she said.
The members of the visiting Chinese property tycoon delegation, who visited Pingtung County’s Dapeng Bay National Scenic Area yesterday, had expressed their interest in acquiring the hotel or taking part in the operation of the Chiang Kai-shek mausoleum area (兩蔣文化園區) in Taoyuan and the Shuinan Trade Zone (水湳經貿園區) in Taichung, local media reported.
While CBRE advised caution, a local property developer was optimistic that Chinese investments would lift the local market.
“Their capital injection will boost local property prices and indirectly benefit local developers,” Mu Chun-sung (穆椿松), chairman of the Taiwan Construction Development Federation (台灣省建築開發公會), said by telephone yesterday.
Mu was also confident that Chinese investors would be able to secure the necessary bank loans.
“If necessary, they can go through multinational banks, not local banks, such as Citigroup [through a third country] to take out loans,” he said. “It won’t be a problem for [Chinese investors] to funnel funds [into Taiwan].”
Mu also dismissed concerns that Chinese investment would raise overall property prices, putting them out of reach of local home buyers.
He said that Chinese capital was likely to flow into and raise the prices of luxury homes or big property development projects, which will have a limited impact on the average prices of properties designed for the low to mid-income households.
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