International real estate investors have been looking at China for a while now and retail real estate firms like CBL & Associates, Simon Property Group, Developers Diversified Realty, Urban Retail Properties and Taubman Centers (among others) have all made pushes into the market.
But it seems China is concerned about rapidly inflating values and is has taken steps to curb foreign investment in Chinese real estate.
The notice, published by the Ministry of Commerce (MOFCOM) and the State Administration of Foreign Exchange (SAFE), will give the MOFCOM authority for final approval of a project. It also imposes a strict threshold on foreign investor applications to establish real estate companies. Only those that have land use rights and own property can establish real estate firms.
The notice, following a circular last June, is the government's latest move to tighten and regulate foreign investment in China's real estate sector.
However, the top managers of two foreign real estate investment firms say in interviews with China Business Weekly, that they have strong confidence in China's property market despite the government's restraining policies.