Why Do Chinese Leave Their Properties Empty?

Portfolio Manager, DCG Capital

William Toh

Portfolio Manager

Long-term, Value Driven Investor

DCG Capital

DCG Capital adopts the "Value Investing" approach in managing its clients' assets. 

The team, comprising Daniel Chan and four other Investment Analysts, offers investors a wealth of investment experience and expertise in managing Singapore and Asian equities as well as balanced mandates for investors.

Independent - We are independent and not part of any large organization. This makes us more nimble with no large investment committees, allowing us to act in a timely fashion. Our total focus is on money management and nothing else.

Value Driven - We adopt the Value investing approach and take a long term approach investing only in businesses that we understand after rigorous in-depth research.

Asia Specialist - With over 30 years of experience investing in Asia, we have gone through a number of cycles of boom and bust and understand the intricacies of investing in Asia.

Benchmark Agnostic - We invest to achieve significant absolute positive return, paying little attention to benchmarks.

Thematic (Sector/Industry)

China Real estate / Thematic (Sector/Industry)

Dalian Wanda Commercial Properties (1567411D HK)

In investing, sometimes we form preconceived ideas when we read articles in the western media. Here is a good example when we look at a particular region in China.Recently we visited Zhengzhou, the capital of Henan province, located in the western region between Beijing and Shanghai.  Henan has a population of 100 mil. It houses the ancient cities of Loyang and Kaifeng, and is the home of Shaolin.In 2013, the US CBS 60 Minutes program <a href="http://www.cbsnews.com/news/china-real-estate-bubble-lesley-stahl-60-minutes/" target="_blank">ran a documentary</a> featuring Zhengzhou’s ghost city. The documentary was filmed in the new Zhengdong CBD, showing its empty roads, empty commercial buildings, empty carparks, and empty residential towers. It was very alarming looking at the size of these projects and realising they, were all … empty.  <blockquote class="">We later learnt from our host that the documentary was apparently filmed on Sunday!</blockquote><iframe src="//www.youtube.com/embed/uxjwhk1ktNw" width="640" height="360"></iframe>

In investing, sometimes we form preconceived ideas when we read articles in the western media. Here is a good example when we look at a particular region in China.Recently we visited Zhengzhou, the capital of Henan province, located in the western region between Beijing and Shanghai.  Henan has a population of 100 mil. It houses the ancient cities of Loyang and Kaifeng, and is the home of Shaolin.In 2013, the US CBS 60 Minutes program ran a documentary featuring Zhengzhou’s ghost city. The documentary was filmed in the new Zhengdong CBD, showing its empty roads, empty commercial buildings, empty carparks, and empty residential towers. It was very alarming looking at the size of these projects and realising they, were all … empty.  We later learnt from our host that the documentary was apparently filmed on Sunday!

Investor Meeting: China + Real Estate + Tier 2/3 City = Bubble? Our Checks Suggest Otherwise