Rapid Development of REITs in China - The Consequence of the Implementation of the Valuation System of China Commercial Property

Rapid Development of REITs in China - The Consequence of the Implementation of the Valuation System of China Commercial Property

July 23, 2007

    SHENZHEN, China, July 23 /Xinhua-PRNewswire/ -- The
biggest functional event in retailing and commercial
property in PRC -- The China Commercial Property Expo 2007
(Expo) & The Press Release of the Valuation System of
China Commercial Property (VSCCP), leaded by the Ministry
of Commerce of PRC and organized by China General Chamber
of Commerce (CGCC), co-organized by China Real Estate
Association (CREA), International Academy of Professional
Investment Management (IAPIM), Society of International
Registered Financial Practitioner (SIRFP) and over 10 other
both Chinese and international bodies, will be held in
Shenzhen, China, on August 18-20, 2007.
    In the Expo, over 1,000 Chinese famous corporations in
retail trade, such as Bailian Group, BJ Wang Fu Jing and
Gome, and over 600 representatives and managements from
government bodies and associations in various related
industries and cities in PRC, developers and builders of
commercial property in PRC, such as Wanda Group and China
Poly Group, will attend the activities and forums arranged.
    Mr Liu Jian Hu, Secretary of the Expo and the
Vice-Secretary of CGCC said, "Under the great support
of the Ministry of Commerce, it is the first time in China
to nominate various major mass medium to organize national
Expo in commercial property jointly together and so it
highlights the importance and recognition of the Expo. 
With the aid of the networks and resources of the medium,
that cover most of the major cities and regions in PRC, the
Expo provides an open platform, in the senses of both in
promotion and interaction, for the project side and
investment side.  Besides, the VSCCP is the first
professional, systematic and technical value assessment
mechanism in PRC, focused on the investment value of the
commercial property project assessed.  It plays an
important role in `linking' between the property developers
and investors in China and overseas with its fully official
recognized assessment system."
    Mr William Wu, the person-in-charge of the VSCCP, the
Senior Consultant of the Committee of Experts of CGCC,
Chairman of the Professional Development Committee of
SIRFP, Director (Great China) of IAPIM, said, "The
Expo fully utilizes the strengths and connections of CGCC
and CREA in gathering the major corporations in retailing
and developers and builders of commercial property in
China, and the networks and resources of SIRFP and IAPIM in
bunching the overseas institutional and individual
investors.  Throughout the development and practical
experience gained of various sectors related to the real
estates in PRC, more and more developers and builders
realize that only the dynamic integration and balance among
the project, the developer and investor, would bring the
optimization of the `commercial value' of the property. 
Therefore, the Expo will then be one of the best
opportunities for them to meet and share."
    William further suggested that the developers in PRC
are now looking for more financing channels and new
financial models to cope with the tightening macro-control
by the central government.  However, most of the developers
can only provide `subjective commercial value' of the
projects, quoted by themselves under no wide-accepted
common valuation system, to potential overseas investors
and/or financial sectors.  Such subjective quotation and
valuation give no evidence in terms of security, stability
and profitability of the projects.  Therefore, seldom, if
not none, commercial property projects can successfully
pass the assessing procedures required by the overseas
investors.  Under the great support of related government
bodies, CGCC initiates an operation to design a systematic,
professional, wide accepted and scientific assessing
mechanism -- the Valuation System of China Commercial
Property (VSCCP), in two years time with the aid of some
local and oversea professional organizations.  VSCCP helps
about 3,000 commercial property projects (includes some
stars hotels) of over 25,000 square meters each to obtain
fair assessments with international standard gradually. 
The `A-B-C' rating system of it gives a clear and simple
picture to investors in collecting overall commercial value
of the project.  Valuable commercial property projects are
then easily to be identified and determined by investors. 
Consequently, the selling model of commercial property
would then be changed from traditional `commodity' to
contemporary `financial product'.  Such a change fosters
not only the healthy development of Chinese commercial
property market and also the rapid growth of more new real
estate investment trusts (REITs) in PRC. 


    For more information, please contact:

     William Siu Lam WU
     Mobile:  [phone]
     Fax:     [phone]
     Email:   [e-mail] / [e-mail]