China Passes U.S., U.K. in Commercial-Property Sales
Bloomberg reports: China outpaced the U.S. and the U.K. combined in commercial property sales in the first half of the year, Real Capital Analytics Inc. said.
China’s transactions totaled $31.2 billion following a surge in land sales after the government eased credit terms, according to RCA. U.S. sales were $16.2 billion in the first half, according to the report, and the U.K.’s were $13.7 billion.
“There’s no question that China will be a more significant player on the world stage for commercial property transactions versus other Western countries,” said Dan Fasulo, the managing director at Real Capital. China’s growth “may not be sustainable at this level,” he said.
About $62.8 billion of commercial properties were sold during the second quarter, 17 percent more than in the previous three months and the first increase in 18 months, Real Capital, a New York-based research company said in a report today.
The research firm said sales growth is the first step toward a global recovery. The first half’s total sales were $116.4 billion, 65 percent less than a year earlier and $500 billion below levels at the height of the market in the first half of 2007, according to the report. Countries that receive the most financial support from their governments will recover faster, said RCA.
The slow U.S. recovery reflects the “deep connections of its major institutions to the epicenter of the 2008 financial cataclysm,” RCA said. U.S. spending was 6 percent of the first- half amount in 2007, Fasulo said, compared with China’s spending of 92 percent.
The total volume of properties in default, foreclosure or bankruptcy around the world has reached $230 billion, increasing $96 billion in the second quarter, RCA said.
“The growth in transactions is only a first step in the recovery process,” according to the report. “Pricing and operating fundamentals remain in decline and debt remains scarce.”
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Posted by: Nina Turner