In the past eight months, I've logged some 68,000 air miles (give or take a few thousand) between Houston and various cities in the People's Republic of China in my official capacity as 2005 president of CCIM Institute. My mission was twofold: to learn more about the commercial real estate and investment climate there and support ongoing institute education and membership programs.

This whirlwind travel schedule to perhaps the world's fastest-growing economy certainly did not constitute a dramatic and new cultural awakening or business experience. I was born in Hong Kong , and I grew up speaking Cantonese. In my own investment and management business, I've represented investors in real estate transactions in China since 1995. One would think my heritage and experience gives me a hands-down advantage at the bargaining table. There's some truth to that statement, but not entirely.

China offers tremendous potential for real estate investment, as evidenced by the construction cranes that dot the skylines of Beijing , Shanghai and other major metro areas. However, even with my background, I was treated like any businessman from the West and had to follow established business protocol. Let me share some observations that may help those planning to do business in China .

Hard Data Is Hard To Find. Here in the US , all decisions made on real estate investment--disposition, development and leasing--are based, or should be based, on an analysis of lots of existing market data. This is not the case in China . Even with skyrocketing development activity, there is little accurate historical data such as sales comps, leasing costs, operating expenses or even property-tax records for investors or developers to analyze. The wide range of authoritative market, economic and demographic information we take for granted in the West simply does not exist yet.

Shifting Demographics. For centuries, China was primarily an agrarian society. This is changing rapidly, as people from villages in remote countryside provinces flood into coastal cities. The result is that China , the world's most populous nation, is experiencing great demographic shifts and the emergence of a middle class. Long-time visitors now see outward signs of growing prosperity, including more people wearing modern Western attire and an increasing number of automobiles competing with bicycles as a mode of transportation. People on the street appear to be happier. To real estate investors and developers, a society in flux makes for some big challenges when it comes to planning, marketing, managing and maintaining property development because the playing field keeps changing.

Multifamily High Rise: The Hot Property. Shanghai already has an estimated 16 million residents, making it the world's most populous city. Beijing has a population of more than 11 million, with projections that the number of residents will exceed 15.5 million by 2010. It's no great surprise, then, that the residential high rise dominates new development projects in China . The burgeoning middle class is helping fuel retail properties, and international visitors are keeping the hotel market active. In China , however, all land is owned by the government. Developers must lease the land under these terms: 50 years for an industrial property, 60 years for retail developments and 70 years for apartments. Be prepared to see some construction practices that may appear to border on the primitive, like 10 stories worth of construction scaffolding made entirely of bamboo.

Closing The East/West Gap. China is a land steeped in tradition, and this certainly extends to real estate and other business negotiations. In many Western cultures, it's possible to conduct business on the initial meeting or even over the telephone. That just doesn't happen in China , where is customary to meet potential business partners several times on a casual basis before taking seats at the closing table. But things are changing, especially in terms of education. For example, we have an agreement through 2007 with the University of International Business and Economics in Beijing to provide commercial real estate education. To date, 164 Chinese real estate executives have earned the CCIM designation following courses held in Beijing and Shanghai . Since 2000, more than 450 Chinese have taken CCIM courses. Also, the Chinese government has relaxed laws concerning foreign-owned companies that manufacture products sold domestically. Now, foreign companies can produce and market selected products within the country.

Once closed to foreign investment, China is rushing to establish a free-market economy. Already, it's one of the world's top two destinations for foreign direct investment, with $653.8 billion added through the end of 2004. According to China 's Ministry of Commerce, the United States is the second largest foreign investor in China , with $48 billion invested to date; Hong Kong ranks first.

Clearly, there are plenty of opportunities for the savvy commercial real estate professional who is poised to do business in this emerging economic frontier.

Pius K. Leung is the CCIM Institute 2005 national president. He also is president of Charter Equity Inc., a full-service, Houston-based commercial real estate company. Views expressed here are the author's solely.

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