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BlackRock Looks to Make a Big Play In Weakened China


One man's misery is another man's fortune. Amid the country's downturn, BlackRock—the world’s biggest asset manager with $8B in property investments in Asia alone—is targeting real estate in China, with plans to make it a key market. The company's Head of Asia-Pacific Real Estate, John Saunders, says the firm will focus on shopping malls and grade “A” and “B” offices in China’s top-tier cities. "We see the current malaise as a good entry point that we believe will throw up some good opportunities," John says. High prices prevented BlackRock from making worthwhile investments in the past. But now that China has opened its borders to allow for foreign investments to help boost its recovery, it will be BlackRock’s key market for the next few years, John says. Despite cap rate compression, yields in Chinese retail real estate investment markets are holding up better as capital values have weakened. And with the slowest growth pace in 25 years, soft demand, overcapacity, falling investment, yuan devaluation and a stock market crash, you can expect real estate investments to continue to have wide appeal. "People take flight from paper currency deprecation into hard asset," John says. [Reuters]