It's just kicking the can down the road. I don't like using that phrase but it's evident. I don't think I seriously. Good morning
both. I seriously think I don't think it's kicking the can down the road. I think what the government is trying to do is trying
to restart that market confidence and also try to avoid the market while collapsing. So so what I'm trying to say is that
the government is going to be so selective of providing that liquidity into the selectivity by the purse over the past 18
months that we do see some developments was actually are in Hang Seng balance sheet for those developers and won't be able to
assess the credits. And therefore those of trouble is when not healthy swan. I think probably they going to face some
headwinds. But overall I have to say we have to realize the fact construction rest assured bit of economy growth is likely to
come into the end. And the headwinds definitely in the residential sectors will show.
But it's really masking a lot of other issues here. Surely Henry I mean the demographic challenge facing these developers is
something that they really have to address. They've overbuilt. And that of course has implications for the wider economy
especially local governments. Yeah that's definitely for sure. I think demographic is
definitely set to stop the stories. If you look at the metro areas and megacities I think we continue to see that population
enthralled for loss and make us cities. On the other hand when you talk about oversupply most seem to be on the so-called lower
tier cities in natural products. I think a few years ago we keep saying for those of lower tier cities that although balanced
lots of local ISE developers is likely to be facing some headwinds. I think the government's estate is a very very
different and now 2015 16. They are helping and now they are not helping. Our top three great land policy is so powerful. As a
result of volatility freight is going to be continue. We might go to see some more defaults going forward.
Give us some perspective on that how bad would default be going forward when you take a look at yields if such especially junk
bonds have if the surge more than 20 percent right now making it even more difficult for companies to pay back. Yeah you are
right. I think the Apollo flights a while we are working for our clients and we look at that develop as it is a few viable
options. It's number one looking at the underlying asset and those land bank itself the land bank holding is a quite
valuable. So what we are saying is that they are going to dispose of most assets to enhance their balance sheet to pay off
the debt. And you can see that money. Monetary easing policy coming introduced it by the governments are potentially going to
provide more liquidity to those healthier developers. So in my mind in 2022 we all expected to see some consolidation in a
residential property developer sectors. So it may make in my mind it's come into my car.
We know that China's growth going forward will be boosted by innovation will be boosted by tag. Give us a sense of how this
will impact demand for perhaps commercial real estate. What assumptions are you making. I think commercial real estate
market is in the early stages for blooming. I have to say if you look at a U.S. commercial real estate market size it was eleven
treaty and U.S. dollars. China being the second biggest economy is only three point a trillion a third of the size of the U.S.
As a result that we are seeing more and more investors are tapping into their commercial spaces particularly. But just take
a tech cold storage is that data centers ISE was a life sciences. Investors are tapping into these spaces. I think
residential like Ross is coming to the end but we are very confident that to see the girls are coming from a commercial
where they is space is. For foreign investors looking to put their money in China's real
estate sector out where should they be putting their money. Henry
I have to say demographic really is a pull to follow government policies even crucial for investing to China. I think for China
that we pretty much like a full closets as a Beijing closets as the Shanghai processes and Greater Bay plus and Chengdu closets
as and also full closets. It's going to be a lot more powerful a lot more prosperity going forward.
Henry what about the investor ability of this sector. This is key. You know the number of traders I've talked to say that it
is uninvestigated but there's no interest in the property side of things or indeed quite a lot of China. Anyway what's your
take. I think a lot of asset classes isn't very investable. I can tell you that the JSF on 2020 to 2021 we look at a
commercial space. Yes transition volume has increased by 15 to 20 percent by 2020. The growth momentum will continue. And at
the center and the heart of investors love is really the cold storage and logistics and business park which is what tech
companies want a life size company not to be there. And going forward we are expecting to see even more interest is coming
from such as the data center such as a bell to rent and multifamily as well. So I think they are investable and just in
the earlier stage invest. They need to partner with the local developers and local operators to tap into RTS space.