Monday, February 23, 2009

Beijing's Olympic Building Boom Becomes A Bust

Mish has some similar observations ( see Inside China: A Sculptor's View ) . Lets hope that only a tiny percentage of the recent credit explosion ( see Number Of The Day "Credit Explosion In China" ) will find the way into anything related to real estate........

Da Mish ähnliche Erkenntnisse hat ( siehe Inside China: A Sculptor's View ) dürfte klar sein das nicht nur die wetlichen Banken insolvent sind....... Bleibt zu hoffen das zumindest nur ein kleiner Bruchteil der letzten Kreditexplosion ( siehe Number Of The Day "Credit Explosion In China" ) seinen Weg in den Immobilienmarkt findet......

Beijing's Olympic building boom becomes a bust LA Times
Reporting from Beijing -- "Empty," says Jack Rodman, an expert in distressed real estate, as he points from the window of his 40th-floor office toward a silver-skinned prism rising out of the Beijing skyline.

"Beautiful building, but not a single tenant.

"Completely empty.

"Empty."

So goes the refrain as his finger skips from building to building, each flashier than the next, and few of them more than barely occupied.

Beijing went through a building boom before the 2008 Summer Olympics that filled a staid communist capital with angular architectural feats that grace the covers of glossy design magazines.

Now, six months after the Games ended, the city continues to dazzle by night, with neon and floodlights dancing across the skyline. By day, though, it is obvious that many are "see-through" buildings, to use the term coined during the Texas real estate bust of the 1980s.

By Rodman's calculations, 500 million square feet of commercial real estate has been developed in Beijing since 2006, more than all the office space in Manhattan. And that doesn't include huge projects developed by the government. He says 100 million square feet of office space is vacant -- a 14-year supply if it filled up at the same rate as in the best years, 2004 through '06, when about 7 million square feet a year was leased.
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3 Comments:

Blogger John M said...

Hello Jan-Martin,

That's pretty ominous.

The taxpayers of Vancouver are already in serious trouble, and their Games aren't for nearly two years. The planners configured the Athlete's Village as a high-end condo flip, but the BC market is already collapsing.

By the way, you folks seem to be the stars of the credit-crunch show these days. I posted yesterday citing this ominous quote from Ambrose: "The vast imbalances that have been allowed to build up under the seductive protection of EMU leave German taxpayers facing bail-out liabilities that exceed the cost of reparations after the First World War, in proportional terms."

Also, I posted just now with this astounding utterance from Bill Gross: "There is fear on foreign shores that even U.S. agency debt may not be honored and that U.S. Treasury debt itself, when “repoed” as in prior years, may now suffer from counterparty risk."

My German course is going well. Professor informed us today that der(?) Hypothek(?) means mortgage. Seems to me the things are becoming more hypothetical by the day ;-)

Hope all is well ...

Cheers, John

2:16 PM  
Blogger jmf said...

Moin John,

nice to hear from you.

I have followed some sad stories from Vancouver/the olympics.....

Not looking good.....

The Eastern Europe topic is indeed very "interesting".....

I´m still not convinced that the Germans will shoulder the burden....

On the other hand i think behind the scenes there are already "discussion" how the EU can set up a "fund" to help the CEE.

I think they will use the IMF or the European version of the IMF as a conduit( forgotten the name )to mask the real burden for the German taxpayer.

But the PR will be very difficult.... Eastern Europe was the main destination for big outsourcing operations from German companies.... And with an election in front of us & several German companies in big big trouble ( with layoffs left and reght ) i think the marketing of money for CEE will be "suicidal".....

Wow! You are visiting a German course?

Not the easiest choice...... :-)

Overall i´m doing fine....

I have scaled back my time allocated to blogging....

Must admit that i have to work harder to keep up with my portfolio/trades....

10:27 PM  
Blogger jmf said...


China nears deflation trap as rail freight collapses
Telegraph

Railway freight in China’s Shanghai region plunged 31pc in January and industrial production fell 12pc, dashing hopes that Beijing’s stimulus policies will soon begin to fuel recovery.

3:23 AM  

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