China's scenic 'Dubai' now a ghost town

[Jman888]

China's scenic 'Dubai' now a ghost town

 

 

Sanya - It was billed as China's Dubai: a cluster of sail-shaped skyscrapers on a man-made island surrounded by tropical sea, the epitome of an unprecedented property boom that transformed skylines across the country.

 

But prices on Phoenix Island, off the palm tree-lined streets of the resort city of Sanya, have plummeted in recent months, exposing the hidden fragilities of China's growing but sometimes unbalanced economy.

 

A "seven star" hotel is under construction on the wave-lapped oval, which the provincial tourism authority proclaims as a "fierce competitor" for the title of "eighth wonder of the modern world".

 

But the island stands quiet aside from a few orange-jacketed cleaning staff, with undisturbed seaside swimming pools reflecting rows of pristine white towers, and a row of Porsches one of the few signs of habitation.

 

Chinese manufacturers once snapped up its luxury apartments, but with profits falling as a result of the global downturn, many owners need to offload properties urgently and raise cash to repay business loans, estate agents said.

 

Now apartments on Phoenix Island, which reached the dizzying heights of 150,000 yuan (S$30,000) per sq m in 2010, are on offer for just 70,000 yuan, said Mr Sun Zhe, a local estate agent.

 

"I just got a call from a businessman desperate to sell," Mr Sun said.

 

"Whether it's toys or clothes, the export market is bad... Property owners need capital quickly, and want to sell their apartments right away," he added.

 

"They are really feeling the effects of the financial crisis."

 

For years, Chinese business owners, faced with limited investment options and low returns from deposits in state-run banks, have used property as a store of value, pushing prices up even higher in the good times but creating the risk of a crash in the bad.

 

"China had a lending boom... and so if people are using property as a place to stash their cash, they had more cash to stash," said Mr Patrick Chovanec, a professor at Beijing's Tsinghua University.

 

"At some point, they want to get their money out... (that's when) you find out if there are really people who are willing to pay those high prices."

 

Photos: AFP, Reuters and Internet

[Deckbuild]

This is the bubble created.... Now it's starting to burst one by one, just like our COE, lucky our Govt act fast to stop it...

[Vid]

Businesses in China has not really felt any financial crisis before. They think they are the almighty that will never fall.

 

If they do fall, it will be really HARD. One that will shake the very core of their country due to its sheer population size.

[Maxus-MIFA9]

It suppose to be a Cruise Centre with Hotels.....

 

All cruise ships to mall there and direct transportation to Sanya.

 

Its seem like no cruise ship wants to go there....

[Deckbuild]

Businesses in China has not really felt any financial crisis before. They think they are the almighty that will never fall.

 

If they do fall, it will be really HARD. One that will shake the very core of their country due to its sheer population size.

 

Yep, with the minimum wage, alot of factory owner are shifting to lower cost area like Viet...

Anyway if they fall, the whole world will suffer with them....

 

[Altivo]

Got another one, dubbed the "Ghost Mall"

 

http://edition.cnn.com/2013/03/03/business....html?hpt=hp_c1

 

World's biggest mall a China 'ghost town'

 

Dongguan, China (CNN) -- They built it, but the shoppers didn't come.

 

New South China Mall in Guangdong Province opened in 2005. With 5 million square feet of shopping area, the mall can accommodate 2,350 stores, making it the largest shopping center in the world in terms of leasable space -- more than twice the size of Mall of America, the biggest shopping center in the United States.

 

At the outdoor plaza, hundreds of palm-trees blend with a replica Arc de Triomphe, a giant Egyptian sphinx, fountains and long-stretching canals with gondolas.

 

Only problem is, the mall is virtually deserted. Despite the bombastic design and grand plans, only a handful of stores are occupied. "Most of it empty, with little consumer traffic and a high vacancy rate," according to a report last year by Emporis, a global building data firm. "It has been classified as a 'dead mall.'"

 

Walking among shattered shops -- its dusty corridors and escalators covered in soiled sheets -- is a walk through a ghost mall. Rubbish piles up along the sides, paint is coming off the walls and store signs and advertisements have faded.

 

The mall's indoor amusement park, staff lay half asleep over counters or kill time chatting with each other while the 1,814-foot rollercoaster roars above.

 

Opened for the public in 2005, developers expected to attract some 100,000 visitors a day. But eight years later, the few people that visit the mall today typically hang out at the American fast food restaurants near the entrance or at the IMAX cinema outside the mall. Some parents bring their children to the Teletubbies Edutainment Center.

 

Part of the problem is location. Dongguan is a factory town and most of its almost 10 million inhabitants are migrant workers struggling to make ends meet. "People coming here to work in factories don't have the time or the money for shopping or the rollercoaster," said a migrant worker in his 20s, surnamed Xiao, who works at the mall.

 

The deserted mall is also a symbol of China's rapid urbanization and runaway investment in real estate projects, where massive development projects have been given the go ahead without proper marketing and business research.

 

"To me, many of these projects are a result of easy access to capital and a combination of wishful thinking and speculative behavior rather than rational business calculations," said Victor Teo, assistant professor at the University of Hong Kong.

 

"This mall is not the only one that is like that. Elsewhere in China there is the phenomenon of 'Ghost Towns', that is to say infrastructure projects, both residential and commercial, with no takers."

 

The credit boom of post-financial crisis stimulus has resulted in a proliferation of empty commercial developments and apartments built on rampant speculation. Yet why is the Chinese economy still moving at a brisk 7% to 8% growth rate?

 

"What China did in the stimulus credit boom is create a lot of `ghost cities': projects without a strong commercial foundation, and projects that didn't get done," wrote Jonathan Anderson in a research note entitled "Hurray for Ghost Cities" from Emerging Advisors Group last month. "What happens next?

 

"In most of the economy ... nothing. You haven't created a lot of new productive capacity; you're not driving down profits and returns in manufacturing and services, and you've left plenty of room for a rebound in the market-oriented property space.

 

"Rather, for all intents and purposes you just took the money and poured it down a black hole," Anderson wrote. And the Chinese banking system "has surprisingly little trouble absorbing that bad debt."

 

But while the macroeconomic juggernaut of China marches on, there remain regional areas of woe. Dongguan is facing mounting problems as factories close down and manufacturing moves to other cities in China and abroad which offer cheaper labor.

 

Still, the mall has plans to boost the number of tenants, said Ye Ji Ning, head of New South China Mall's investment unit. He claims the mall has a 20% occupancy rate measured by commercial area, although Ye declined to give specifics when challenged on that number. The company's goal is to increase occupancy to 80% in 2013, he said.

 

"From March onwards we will have big promotional activities in order to reach our new leasing targets," Ye said.

 

It's not the first time the owners try to blow life into the sleeping giant. The mall was initially headed by Dongguan native Alex Hu Guirong, who became a billionaire in the instant noodle business, and later sold to the Founders Group, a conglomerate set up by Peking University.

 

In a 2007 relaunch, the mall changed name from "South China Mall" to "New South China Mall, Living City" and a revitalization plan was drawn up. But after the relaunch, neither shoppers nor tenants came.

[Leepee]

Since the towns and building are already built.

if the developers were to price it right, surely the demand is still there to fill up the units?

 

 

 

 

[Jman888]

Since the towns and building are already built.

if the developers were to price it right, surely the demand is still there to fill up the units?

 

 

even Berjaya Time Square located in the central of busy shopping belt of KL also no demand, this Guangdong mall has 5 million square feet of shopping area, what do you think?

[Mustank]

This is the bubble created.... Now it's starting to burst one by one, just like our COE, lucky our Govt act fast to stop it...

 

i rather the coe bubble burst leh, then got $1 coe

[Ghostami]

even Berjaya Time Square located in the central of busy shopping belt of KL also no demand, this Guangdong mall has 5 million square feet of shopping area, what do you think?

 

Not to mention the demographics of the people in the area.

[Whathefish]

even Berjaya Time Square located in the central of busy shopping belt of KL also no demand, this Guangdong mall has 5 million square feet of shopping area, what do you think?

Guangdong mall got KTV?

[Kiadaw]

USA with population of around 350 million, have problem finding jobs for its people, imagine China with 4-5 times the population. Manufacturing, is the main driving force of China, & Its clear that only in manurfacturing can one hire some many people, but the rapid increase in wage is pushing people else where. Let's be clear, the rich & towkays will continue to properous, but the common people will have harder times. But this is the effect of capitalism I guess.

 

Smaller nations can concentrate on high value trade & industries like Switzerland or Denmark, but having good wage & high standard of living for its people, but for a big nation, very few industry can come close to manufacturing in providing so much jobes to so many people.

 

Anyway, its not something that affect us much I think. When China is not longer the go to place for manufacturing, someone will take their place.

Edited March 4, 2013 by Kiadaw

[Ahtong]

That China condo looks nice, but even if I had the money I would be scared to buy.

 

With so little occupants, the maintenance might be quite slack. Sekali kena stuck in the lift, press the bell for 1 week also nobody come.

[Mockngbrd]

open PRC massage mall

[Deckbuild]

i rather the coe bubble burst leh, then got $1 coe

 

It will drop this time lah, I predict 30k by end of this year, anyway we shall see the effect this wed...

[Whathefish]

open PRC massage mall

MALL consist of Massage, KTV, brothel..etc..........just like sim lim square...all selling almost the same thing in one mall...

 

all men will flock there

[Wyfitms]

open PRC massage mall

 

5 million sf of space...

 

You want 5,000 massage shops there ah?

[Mockngbrd]

5 million sf of space...

 

You want 5,000 massage shops there ah?

mall sure huat