Thursday, July 20, 2006

Most Expensive Apts In Shanghai
Enough Already, No One's Buying

Nine months after opening in Shanghai, China's most expensive luxury apartment complex has yet to attract a single buyer, but developer Tomson Group is not about to slash prices to get people in. Sales may prove difficult in the near term at Tomson Riviera, located on the banks of Shanghai's Huangpu River, as Beijing's efforts to cool an overheated property sector may keep buyers away from a complex where units can cost US$20 million (HK$156 million). As the development's four towers sit idle, the company is still determined to hold the line on prices. The development's 220 luxury apartments now carry price tags averaging 110,000 yuan per square meter. The fact that they have not been able to sell even one apartment in 9 months tells you a lot - wrong pricing, market does not exists for that price range, way too many units at that price (for that price you want exclusivity, not a togetherness with another 220 families).

To bring in some income as it seeks buyers, Tomson has decided to rent out flats by early next year in one of the complex's four buildings. Global investors such as Morgan Stanley and Citigroup have snapped up close to US$4 billion of property in China last year. But the flood of foreign money has Beijing worried about inflation in the real estate sector. Authorities have prepared draft rules restricting foreign purchases.

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