China: A Tale of Two Cities

Just because you haven’t heard from us here in China doesn’t mean we haven’t been busy.  In fact, we’ve met with over 10 real estate related companies in both Shanghai and Hong Kong over the past 4 days.  It’s just that communication is slightly limited on mainland China (and it’s tough to find the time to blog with so many visits!).  Now that we are in Hong Kong though, we are free to blog once again (and check Facebook, which is all we were really looking to do).

At this point we’ve heard from developers (Shui On Land, Hong Kong Land), investors (Blackstone, CBRE Investors), banks (Standard Chartered, Citi), and a few others. We’ve heard from both bulls and bears, and now have a sense of just how vast (and complex) China is.  There is no doubting its global impact, but there are some questions about how exactly the future looks for China.  From a real estate perspective, Shanghai has a ways to go in terms of redeveloping the city from both a commercial and residential perspective, while Hong Kong has done that already but is still growing vertically.

The difference between the two cities is certainly measurable.  Shanghai’s main office district (and a good portion of the city itself) has only developed in the past 20 years, meanwhile Hong Kong has been on the global scene for a lot longer.  Shanghai wants to be where Hong Kong is, but appears to be about 15 years behind in terms of the “soft infrastructure” (legal precedents, government administrative systems, etc.) per Nicholas Brook, a Hong Kong developer who has lived and breathed Hong Kong for the past 35 years.

We’ve also had the unique opportunity to visit a number of sites, including a downtown shopping mall in Shanghai, a high end mixed-use redevelopment project, a high tech science park, and the tallest buildings in both Shanghai and Hong Kong (despite the newfound freedom of speech, we’re still having technical difficulties uploading the amazing pictures I’ve taken and the views we’ve seen.  I’ll obviously work on that, and hopefully will have a great summary for you all tomorrow). The week has both felt very long and also like a blur at times.  Nonetheless, it’s been an amazing educational experience and has opened our group’s eyes to what it means to develop, own, and manage real estate outside of the states.

Today we are off to Macau for a tour of the Venetian, which should bring some incredible pictures as well.  Fun fact: Macau has the highest gambling revenues of any city in the world, 3 times higher than Vegas!  Hopefully that might bring some luck our team’s way…but don’t hold your breath.  Thanks for reading!

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