August 2, 2012
Qianhai, a city near Shenzhen, is undergoing a boom that speculators are hoping will result in the next mini Hong Kong.
The southernmost city in China is tipped to be the next mini Hong Kong as speculators snap up properties ahead of a massive investment programme.
Qianhai, home to 10 million people, is located on the outskirts of mega-city Shenzhen and is just an hour's drive from Hong Kong. The city's officials have signed on more than 30 Hong Kong-based companies in July, and had also appointed a Chinese private equity firm to attract foreign investment to the region.
Foreign Investors and speculators have reacted to the news with a flurry of investment activity, hoping to cash in on property price spikes.
Qianhai's business zone is slated to receive USD 45 billion worth of investment, causing property prices in the district to rise to match those in Shenzhen and Hong Kong.
Said James Eden, a British expat who lives nearby, "At the moment the area is pretty undeveloped with lots of unfinished properties, but it's creating quite a buzz with the expected investment. There was a very big ceremony last month to showcase the project and that has attracted a lot of foreign interest."
"People are always looking at the next big thing, especially in the property market, and lots of people are pinning their hopes on Qianhai resembling Hong Kong in years to come."
Speculation is high in the market. Share prices for Shahe Industry, a Shenzhen government-backed commercial property developer, hit their highest in over a year on the back of hopes that the company will secure a share of the billions of dollars worth of investment promised.
However, there is also some scepticism. As a Chinese property expert said, "At the moment there is a lot of speculation and excitement but so far this is still in the concept phase. We saw a huge property bubble develop recently in China which led to the severe property curbs we are witnessing now. Investors should be careful not to create another one."
Tags: Commercial real estate, Business space, Investment properties
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