China's property sector haunted by ghost towns

[MrTan]

http://www.channelnewsasia.com/news/...r/1856620.html

ASIA PACIFIC
China's property sector haunted by ghost towns
China's property sector is suffering from many empty towns dotting its vast landscape, as the number of cities built has far outstripped demand. The impact is prominent in the Tianjin metropolis, where ambitious development projects have either stalled or been left unoccupied.

POSTED: 19 May 2015 17:24

TIANJIN: Just how badly China's property sector is suffering is evident in Xiangluowan district in Binhai New Area of China's metropolis Tianjin. The area has more than 30 office buildings. While some are still under construction, many have been completed and left empty.

One of the first tenants to move here is Ms Zhou. When she opened her provision shop about five years ago, the area was said to be Tianjin’s version of Shanghai’s Lujiazui Financial District, with modern buildings and skyscrapers. Five years on, however, most of the buildings are empty, making it look like a ghost town.

“It’s only in this building where there are more people. Elsewhere, there is no one. It’s a bit like an empty city, and this year is even worse,” said Ms Zhou.

“Over the past four years, we haven’t seen people moving in. Even though they said some government offices will move here, it hasn't happened,” said restaurant staff Liu Qian.

Just across the Hai River from Xiangluowan is another ambitious development - Yujiapu, an area meant to become China’s Manhattan. However, six years into its 10-year construction plan, Yujiapu sits largely forsaken.

There were no official figures on the number of empty towns in China, but experts said the scenario is present nationwide. The city of Ordos in the north is one of the more notorious cases. It is in so much debt that the local government reportedly had to borrow money to pay city employees.

"These cities are building ahead of demand, and sometimes they’re building two to three years ahead of demand, and it takes that long for the occupiers to start following the construction," said Steven McCord, head of research for North China at Jones Lang LaSalle.

Although Yujiapu and Xiangluowan are just an hour's drive away from the metropolis of Tianjin, government-led efforts to generate jobs have not gained much traction.

“Yujiapu and Xiangluowan, I think, are pretty extreme examples in China of places that are going to need more time than normal in order to find their own paths," said Mr McCord. "I think the key reason is because they’re so far away. They’re so far removed from the traditional office precincts of Tianjin that they need to find a way to provide good incentives to really bring people into Yujiapu.”

Still, the two cities are at least now part of the recently launched Tianjin Pilot Free Trade Zone; and they are slowly changing.

“Since the Free Trade Zone was approved, I feel that the area has suddenly become very hot, and not like before. Some construction sites have resumed work and Baolong International’s serviced apartments and office buildings are also being occupied,” said Linda Hu, general manager of Ane House Hunting & Consultant.

In fact, as China expert Wade Shepard described it - what China has might be the opposite of ghost towns or places that have flourished, then died - they are new cities that have yet to come to life.

- CNA/pp

[MrTan]

http://business.asiaone.com/news/few...inas-manhattan

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Few signs of life in 'China's Manhattan'
AFPWednesday, May 20, 2015

TIANJIN, China - As the wind whistles through half-finished skyscrapers and over empty boulevards, a development billed as China's answer to Manhattan at times bears out the "ghost town" label some have given it.

Chinese officials hope the towers of the Yujiapu Financial District will one day house a trading centre to rival New York's Wall Street or London's Canary Wharf.

But more than three years after construction began, all but one of the buildings planned for the development in the northern Chinese port city of Tianjin appear unfinished, alongside vacant spaces where others should stand.

As China's economic growth slows after a decades-long boom, these buildings -- many of which still lack exterior walls -- some 150 kilometres from Beijing raise questions about the viability of the scheme, which state media say will cost a total of 200 billion yuan ($32 billion).

Billed as the largest hotel in Asia, the Country Garden Phoenix Hotel is an empty husk, with no builders in sight near its curved exterior.

But there are some signs of life in Yujiapu, a chunk of land peppered with more than a dozen skyscrapers in various states of construction jutting into the Hai River.

Construction workers in hard hats and loose-fitting jackets measure up glass for some buildings, and a shopping centre had a sprinkling of customers on a recent visit by AFP.

But no buildings apart from the mall appear to be finished -- a prospect likely to worry local authorities who reportedly hoped the project would open last summer.

In the "Conch Bay" development on the opposite bank, incomplete buildings have been fenced off and its wide roads see almost no pedestrians.

Several reports have labelled Yujiapu a "ghost town."

But some argue that it could in time achieve its goals, citing the development of Shanghai's bustling Pudong district -- which some dismissed as a waste of money when its was first planned in the 1990s.

The Tianjin project has a powerful backer in Zhang Gaoli, the city's former top official who was promoted to China's all-powerful Politburo Standing Committee in 2012.

Analysts say its success will depend in part on a central government plan to create a new "economic corridor" linking Tianjin with neighbouring Beijing.

"If the two cities become integrated on a policy and economic level, I think that Yujiapu is really promising," said Zhu Guozhong, of Peking University's Guanghua School of Management.

On the side of one of Yujiapu's unfinished tower blocks, a huge banner listed a phone number, seemingly inviting inquiries for office space.

When AFP called it turned out to be a real estate agency -- but the woman who answered said she had not heard of the project.