Recent government restrictions seem to have little effect in preventing foreign investors tapping China's real estate market, with two international developers granted contracts for major projects in Guangdong and Shanghai.

RREEF, the real estate and infrastructure investment management arm of Deutsche Bank, yesterday unveiled a US$225 million development with three other partners in Guangdong.

RREEF has a 50 per cent equity stake, Macanese real estate investor New Genesis International holds 25 per cent while Zhuhai Zhongzhu Real Estate Development and a sister company holds the last 25 per cent.

The Zhuhai development, neighbouring Macao, is targeted at local middle-class homebuyers.

Meanwhile in Shanghai, Hines Interests Limited Partnership of the United States confirmed yesterday that it has acquired 251,776 square metres of land for two residential buildings and another two mixed-use projects.

Hines, which is also undertaking the development with a local company, Shanghai Chengtou, is reported to have an at least 50 per cent stake in the 1.71-billion yuan (US$214 million) development on the C-5 site in the city's New Jiangwan Town.

The government launched a package of new rules in July, requiring overseas real-estate developers to have at least 50 per cent of the registered capital for any project worth more than US$10 million.

The measure and other schemes to cool the region's property market, however, have had little effect with housing prices rising 5.5 per cent in 70 cities in the third quarter of 2006, according to the National Development and Reform Commission.

Hines' contract was delayed until last month not only because of July's curb on foreign investment in the property market, but more importantly because of "negotiations on the division of stock within the partnership," a spokesman told China Daily.

Hines entered China's property market in 1996 and has focused on Beijing and Shanghai with three projects running in each city at present.

"China is a particularly attractive emerging real estate market given the pace of growth of its economy," Kurt Roeloffs, Asia Pacific head of RREEF, told a press conference yesterday.

"We like the middle income residential sector, where we believe there is strong demand and a structural shortage of supply," said Roeloffs, referring to the Zhuhai project, and adding that it conforms to the government's housing policies.

The company is still looking for other investment opportunities around the country with potential projects ranging from residential and office buildings, to industrial projects and infrastructure, according to Roeloffs.

"Continued strong economic growth and positive structural changes, coupled with a relative shortage of all types of good quality real estate means the medium to long-term prospects for real estate market fundamentals in China remain very good," said Roeloffs.

Editor: Yan