Chinese developers look to plug $111 bn funding hole

China's leading residential developers are planning a surge in investment fund activity during 2012 as they try to bridge an estimated financing gap of $111 billion in the year ahead.

A government-led clampdown on bank, bond, equity and trust market loans to help fund the residential property sector has left developers with little choice other than to set up their own funds.

“It will take time, but in the next decade, you will see the Chinese property market become more institutionalised," says Frank Marriott, senior director of real estate capital markets for the Asia-Pacific at agency Savills.

China’s developers are being squeezed by dropping sales volumes and lower prices. Analysts widely expect industry consolidation to accelerate in 2012 and some players, even big ones, will have to sell assets and quit the market.

Source: OPP.org.uk