Top of the List

"Funds from all over the world are trying to get into Asia Pacific and on top of their list is China,'' Guy Hollis, head of U.S. real estate consultant Jones Lang LaSalle Inc.'s investment arm. "About $30 billion overseas funds and also money from the Mideast want to find a home in China.''

Speculation that China will let its currency gain at a faster pace increases the lure of property. China revalued the yuan almost a year ago and abandoned a peg to the dollar. The currency has climbed 1.4 percent against the dollar since then.

"One way that you can bet on an appreciation in the currency is to own assets in China, and real estate has been the favorite one with capital gains being pretty good,'' said John Kyriakopoulos, a currency strategist at National Australia Bank Ltd. in Sydney.

Overseas institutions bought property worth of $3.4 billion in China last year, the SAFE said in a report on April 28. That didn't include "lots'' of transactions that can't be tracked and confirmed, said Remy Chan, Shanghai-based head of markets at Jones Lang LaSalle.

Foreign Funding

Foreign investors are entering China's property market by investing in Chinese developers or forming a locally registered entity such as a private equity fund to acquire existing properties. In some cases, foreign lenders are involved in financing such operations, said Jun Ma, head of China research at Deutsche Bank AG in Hong Kong.

Overseas institutional investors are planning to sell real estate investment trusts on overseas markets such as Hong Kong and Singapore after acquiring the income-producing properties in China, said Stanley Chan, managing director of Stanley & Partners Investment Management Ltd.

"The return can be much higher than betting on a stronger yuan,'' he said.

Over the past five months, international investment banks and real estate funds have announced plans to invest more than $5 billion in Chinese property.

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