China Property:Nanning Tour takeaways -yet to see investors coming in

Yet to see investors coming into NanningWe hosted a property tour in Nanning of Guangxi Province, visiting variousproperty development projects, meeting with local sales teams and alsovisiting a luxury mall and meeting with the operation team. We found thatsales volume in the city has been going well and there were no additionaltightening measures announced in late 2016. Projects we visited have beenrecording good sales-though - non-local buyers are mostly from GuangxiProvince rather than investors from outside the province. In addition, the onlyhigh-end positioned mall we visited in the city has been operating well.

    Sales have been going well; no spilling-off of investors from core T-2 citesAccording to NBS, sales volume in the city in 11M16 increased by 28% YoY to9.3msqm and the ASP within the same period increased by 7% YoY toRMB6,692 psqm. The GDP growth in 9M16 in Nanning was +6.4% YoY andGDP per capita in 2015 was up by 7.3% YoY to RMB49,066. On the propertymarket, we found that projects we visited have been recording a good salesthroughrate of 80% or above. Mostly the buyers in the city are first-timebuyers and/or first-time upgraders. Most of the upgrading buyers are civilservants, and middle and senior staff from developers. Sales managers told usthat there are non-local buyers from other cities in the province, as Nanning isthe provincial capital of Guangxi. However, they have not noticed stronginvestment demand spilling off from core Tier-2 cities, as the city is lackingstrong industries to attract people moving in to provide long-term support.

    MIXc of CR Land