Hainan

Hainan began to attract investment after it shedded its backwater status and became the largest Special Economic Zone laid as out by Chinese leader Deng Xiaoping in the late 1980s. After massive investment over the following decade-and-a-half, the region was hit hard by the Asian financial crisis and property prices and demand plunged. Boosted by rising tourist numbers and interest from overseas Hainan has been quickly returning to its glory days. Numerous high end resort developments have been springing up along its stunning beaches over recent years and many more are set to come online in the coming years. China Strategic Property Holdings for example, is developing 28sqkm of beach front property which on completion will be one of the largest property development deals in China and the largest development in Hainan. The project represents a major step for the development of Hainan’s tourist industry, which has already received over 50 billion RMB in government funding over the past 10 years.

Hainan Province’s special economic status has led to a slightly more liberal set up for foreign investors. Although non-Chinese cannot own land freehold, they can rent land for up to 70 years. Foreigner investors are also permitted to enter joint ventures and establish companies for the purposes of land purchases. Overseas companies are also actively courted with a view to secure investment in the island’s infrastructural developments such as ports, wharfs, sea transport and other construction projects.
When Hainan was declared a Special Economic Zone and a province the capital, Haikou, was a sleepy run-down town. Today however, it is packed with foreign investors. There is also a sizeable contingent of mainlanders who flood the island on weekends and during holidays.
Major international brands are also now establishing themselves on the island, with the Banyan Tree Sanya Resort & Spa at Luhuitou Bay dominating the ultra-high end. The Banyan property opened in 2008 and is being marketed as the first luxury all-pool villa resort in China. With brands such as Banyan settling in and an ever-increasing number of tourists visiting the island, Hainan looks to be one of the more stable investment options for overseas buyers.
Condos
Although Hainan’s numerous beaches make villas the ideal form of residence, there are a number of high quality condominium developments already in place or set to come online in the coming years. Chinese property firm Agile Property Holding Ltd is currently developing a comprehensive resort town with total floor area of about 9.86 million square meters. The property arm of the US investment bank Morgan Stanley recently paid $770 million for a 30 per cent stake in a resort development project. The sales proceeds will provide Agile with part of its funding needs and somewhat offset the cash flow impact of a slowdown in property sales.

Among condominium projects currently attracting buyers is the Saint hot spring Resort (Tianlaiquan), which is set to capitalise on Hainan’s top quality hot mineral water resources. The development, currently under construction, will include a five star hotel, resort and condo residences, villas and holiday apartments. The project’s leisure facilities include tennis courts, a 2,000 square meters swimming pool, fitness centre, 30 hot springs bubble pool, as well as a community hospital, bank, post office, farm and other facilities. The project is funded by the Hainan Tourism Tianfuyuan real estate investment and development co. The first phase of the development will involve the construction of the residential buildings and will see some 2748 apartments coming online. Upon completion, the development will cover an area of 158001sqm with 54 per cent green area.
Houses and Land
Land prices in Hainan have fluctuated wildly in recent years making the future. However, a number of major international developers and management companies have moved to secure land plots on the island indicating that despite the global downturn, Hainan may still be a good bet. Among those backing Hainan is Outrigger Enterprises Group, which announced recently that it is to develop and manage the Outrigger Qingshui Bay Resort. The multi-billion dollar mixed use development will run along 7.5 miles of prime beachfront in Hainan Island’s Sanya Administrative Prefecture on the South China Sea. It will feature six luxury hotels, a diverse range of residential apartments and villas, multiple championship golf courses and a comprehensive mix of commercial, retail and entertainment offerings.

Qingshui Bay Resort is being developed by a joint venture between funds managed by Morgan Stanley and Agile Property Holdings Limited, a Hong Kong listed property developer specialising in large-scale, high end, design-oriented residential and resort developments. Overseeing the hotel component of the master planned project is Panorama Hospitality, a unit of Morgan Stanley specialising in hotel asset management, operating and advisory services in the Asia Pacific and Europe regions.
The Outrigger Qingshui Bay Resort, which is slated for completion by 2013, will be one of six luxurious accommodation choices within the Qingshui Bay Resort.