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Sector Review: China's Real Estate Developers Play Survival Of The Fittest Sep 06
Standard & Poors, Sep 2006
Abstract
Speculators are feeling the heat in China's real estate market. Government measures to curb speculation, including a capital gains tax and tighter credit conditions, are starting to bite. Sales have slowed in some cities, particularly in the secondary market. If the slowdown is prolonged, smaller developers are likely to feel the squeeze, which could accelerate consolidation. For bigger developers with strong balance sheets, plenty of opportunities will emerge-including the ability to swallow up the land banks of ailing players. Demand for property is likely to remain strong over the long term, underpinned by housing upgrades, accelerated urbanization, and positive economic growth. But investors and lenders should remain cautious in a market that has significant structural risks, including: Evolving regulations Fierce...
Companies mentioned in this report are: China Overseas Land & Investment Ltd.,Hopson Development Holdings Ltd.,SRE Group Ltd.,Agile Property Holdings Ltd.
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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