Foreign buyers emerge

However, industrial property prices in Beijing edged up in the first quarter, with the standard warehouse up 0.5 percent to 4,712 yuan per sq m, compared with the fourth quarter, according to DTZ.

Wang noted that there were relatively low entry barriers to foreign investment in the industrial property sector.

Chen added that in recent months, he had noticed that domestic and foreign institutional investors -- especially from Singapore and the United States -- had pooled funds to purchase Chinese industrial property in expectations of a rebound.

Wang said that many factors would support a longer-term rebound in industrial property. He cited manufacturers' need to upgrade, improve their product quality and expand research and development facilities.

Chen said lower warehouse prices and labor costs in central and western China had drawn factories from southeastern and coastal areas since last year. The beneficiaries of these moves included Jiangxi and Anhui provinces. These moves would create demand for industrial space in those regions.

He added that China's stimulus plans, which cover areas including petrochemicals, steel, textiles and even the logistics industry itself, would boost investors' confidence about the property sector.

(Xinhua News Agency May 2, 2009)