Tangshan, China: While property prices in top-tier Chinese cities are booming, prices in smaller cities, where most of China's urban population lives, are sill sinking, complicating government efforts to spread wealth more evenly and arrest slowing economic growth.
Property has a special place in the psyche of Chinese investors, far outstripping stocks and bonds as a vehicle for their savings, so sliding property prices have a big impact on individual wealth and domestic consumption.
"As the real estate market is tied to many comprehensive industry lines and consumption, it is one of the key industries to support the Chinese economy," said Albert Lau, CEO of property firm Savills China.
The weakness in property and related sectors, accounting for an estimated 20 percent of GDP, has been a big drag on Chinese growth, which hit a 25-year low in 2015 and is set to slow again this year.
A property revival could also play an important role in China's recent pledge to lift 50 million people out of poverty by 2020.
The regional variations in the market are stark.
In top-tier cities, prices rose at their fastest pace in almost two years in February, with Shenzhen, Shanghai and Beijing prices surging 56.9%, 20.6% and 12.9% from a year earlier, prompting policies to try and cool the market in some cities.
But further down the pecking order, many places are still grappling with the excesses of the last debt-fuelled property frenzy, which began in around 2005 and finally ran into the sand in 2014, leaving a huge backlog of unsold and unfinished developments.
In the port city of Tangshan, a big steel-producing city in the northern province of Hebei, developers built frenetically in the boom years, creating a surplus of properties that analysts estimate could take up to 13 years to unwind.
For the 18th consecutive month, home prices in Tangshan fell in February from a year earlier, official data showed.
It is littered with unfinished buildings - Reuters counted at least 10 such housing projects there last week - and each one represents countless individual misfortunes, as developers abandon projects and run off with downpayments.
On one ghost development called "Youth Zone", a lifeless block set in withered grass, graffiti on a steel door into the site reads: "Give me back my home".
A 50-year-old investor who gave her surname as Ma said four years ago she made a downpayment of 120,000 yuan (US$18,400), several years of savings, for a new apartment on another project. Soon after, it ground to a halt and the developer went missing, along with her money.
"There aren't many people around in Tangshan who haven't been caught in a property trap in recent years," she said.
Her sister paid nearly 600,000 yuan for an apartment in Youth Zone, but the cash-strapped developer stopped work last year.
Mo Bin, president of Country Garden Holdings, the 7th-largest property developer by sales in China, is optimistic, however, that government tax and stimulus policies will reinvigorate housing investment in the smaller cities.
"We are a brand-name seller in third and fourth-tier cities, and we don't have many years' worth of inventory to clear; in the future we will raise selling prices, not cut them," he said.
But not all share that view.
Hu Baosen, president of Central China Real Estate, a developer focused on investments in the province of Henan, said his company was moving out of property development to focus on selling property-related services.
"I am not optimistic on the outlook for the housing market in tier-three and tier-four cities," he said.
"I reckon the destocking process in Henan province may last for the next five years."
Local officials have used innovative methods to try to revive their property markets, a task made particularly urgent given many of them depend on selling land to developers to fund their budgets.
Some have tried to get migrant workers and farmers to buy up excess inventory, but so far have not hit their targets, said Chen Yajun, vice-head of the planning department of the National Reform and Development Commission (NDRC).
China's system of residential registration, and the welfare benefits that flow with it, have in practice been a barrier to such buyers, he said.
Lau, at Savills China, said real demand for houses in these cities would require economic renewal first.
"Most third- and fourth-tier cities in China have not achieved economic maturity and diversity, and rely heavily on export processing or other traditional industries. As a result, destocking in these cities tends to lag behind." - Reuters 31/3/2016
LONDON, 17 March 2016 - In what is one of the most important years in the history of Battersea Power Station, the Battersea Power Station team behind its regeneration is pleased to confirm the first new shops, restaurants and cafés moving into the first phase, Circus West.
In a line-up that will deliver the village feel, which the team at Battersea Power Station has sought to create for Circus West, the blend of commercial tenants ranges from fine dining through to a butcher, baker, florist and The Village Hall.
Each tenant of the commercial space at Circus West has been specially selected taking into account the quality and individuality of the experience they can offer. These include:
Pedler Cru: Neighbourhood Eatery - vibrant neighbourhood eatery offering seasonal ingredients and a daily changing menu
Vagabond: Wine Shop and Wine Bar – award-winning, independent, hybrid wine shop and bar
Allens of Battersea: Butcher – Renowned London butcher providing quality meat but also offering butchery courses
Flour Power City Bakery: Bakery and Café – Organic bakery and all day café serving delicious bread, pastries and cakes baked the artisan way
The Coffeeworks Project: Coffee shop – Family run, independent speciality coffee house showcasing the best coffee, tea and food in a friendly and relaxed environment
The General Store: General Store – Diversely stocked general store and deli run by foodies passionate about the best in class produce and customer service
No29: A modern vision of the 21st Century Pub – Local, independent neighbourhood bar serving great food all day established by Darwin and Wallace
Paul Edmonds: Hair Salon – luxury hair salon by leading hair stylist to the stars Paul Edmonds
Philippa Craddock: Florist – Acclaimed British florist supplying luxury flowers
The Village Hall (in partnership with Battersea Arts Centre): a dedicated space for events, arts, residents and visitors.
Delivering on the pledges set out in the Community Charter (LINK) and The Placebook (LINK), which detail the vision and strategic thinking behind the regeneration of the Power Station site, the Battersea team has now put in place key social building blocks, including the Village Hall, that together will serve to establish a robust and solid community in the new neighbourhood.
The Village Hall will sit at the heart of the Circus West site and will offer an active social space for existing and future local residents and the London arts community. A partnership with the renowned Battersea Arts Centre (BAC) was announced in 2015 and BPSDC are working with them and the local community to design the space and develop a programme of activities and performances for all ages that will be on offer including plays, workshops, classes, music performances and community events. In the wider Circus West public realm a seasonally changing cultural programme will run in the unique space alongside the iconic Power Station.
The commercial space at Circus West, which occupies the entire ground floor , is the bedrock of building a vibrant new neighbourhood which not only delivers the community-focused village environment which we know our buyers have been keen to see, but also helps to create an attractive visitor destination when Circus West opens to the public.
Joanne Skilton, Head of Leasing, Battersea Power Station Development Company commented:
“The team at Battersea has looked carefully at all the elements needed to create both a great community and a great place. We have therefore put together a mix of local shops, restaurants and social amenities which will not only give Circus West a distinctive neighbourhood feel, but make it a fantastic place for people to visit when it opens.
“Perhaps the best example of Team Battersea’s commitment to a local tenant strategy can be seen with The General Store. We were approached by a number of big chains. However, we chose the route of these particular independent and local businesses as they have a proven track record in the area, connecting to the community they serve and creating that all important village feel which is what people really want.”
Circus West is located alongside the western edge of the Power Station within a few minutes’ walking distance of Chelsea. It will be home to residents, workers and visitors, who will be able to live, work and spend time in and around one of two fantastic new buildings designed by renowned architects’ SimpsonHaugh and
Partners and dRMM. The phase also includes the renovated railway arches and the first elements of the new riverside park.
Circus West is the beginning of the unfolding chapter of London’s newest town centre which, when complete, will host 25,000 people living and working on site, lead to the creation of 17,000 direct new jobs and bring about the first major extension of the London Underground system since the Millennium in a unique public/private partnership.
With more exciting tenant announcements to follow over the coming months, the Battersea team is already working with each business to prepare information and signpost local people to the new long-term retail, leisure, hospitality and estate management jobs that will be created as each phase completes. The Battersea Academy of Skills Excellence, known as BASE, will launch in Spring 2016 to co- ordinate this work and offer an on-going skills development programme.
The new Circus West businesses will open to the public in early 2017. London’s leading river bus service, MBNA Thames Clippers will operate the only service from Circus West to central London from 2017.
For more details on Circus West please visit www.batterseapowerstation.co.uk/circuswest