Developers pivoting to bright spots in China's real estate market

HOUSING demand in China remains strong even as Beijing tries to control home prices, but foreign developers are turning their attention to innovation-driven infrastructure projects instead, from logistics and life sciences facilities to data centres and business parks - sectors backed by the government - as Chinese cities are poised to become even bigger and smarter.

James Macdonald, head of Savills Research China, told The Business Times: "Developers have turned much more conservative in new acquisitions, and are looking to conserve capital where possible either to ensure adequate liquidity for debt servicing, repayments or to be able to capitalise on other buying opportunities that may appear later in the year."

It used to be that adding China's real estate market - valued at US$60 trillion or two-thirds of the world's gross domestic product - to an emerging market portfolio had the dual benefit of lowering risk through improved diversification and enhancing returns. But not anymore.