SHANGHAI, CHINA-The bubble is beginning to form again in China, where purchases of high-end office and retail buildings totaled about $7.4 billion in the first half of 2010, according to CB Richard Ellis Group Inc. here. Many believe the office market has hit bottom, given data such as rents for buildings in Beijing being up in the first quarter by 5.7%, says Danny Ma, a senior director at the company.

He tells that stringent measures were released in April by the central government in order to tighten the market by curbing speculative demand. In the following several months, the residential market saw broad-based shrinking of transaction volume, especially in top-tier cities, of which property price surged in 2009. The commercial property market appears to be more stable, Ma says. “On the back of sound fundamental growth across China, the prime office market has plainly bottomed out since the second half in 15 major cities that we monitor. Meanwhile, most cities in our coverage have witnessed double-digit growth in total retail sales in recent years. The sound growth of fundamentals is the primary driver for steady growth of prime retail properties among regions.”

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