GLOBAL - The Chinese real estate market may be surging, but it is at little risk of crashing and burning, according to Henderson Global Investors.
Speaking in London at the company's annual summit on property, Stanley Chin, director of portfolio management for Asia, said there was "no risk of a major crash".
Chin acknowledged some parts of the Chinese market were at risk, but he said the government had made great strides in cooling down the overall market through a number of restrictive measures.
"Yes, there are pockets of overheating," he said. "But things are generally under control."
He said recent efforts by the government, for which managing the property market is "nothing new", was sensible and likely to dampen speculative investment, particularly in Tier 1 and 2 cities.
He said the government was also doing well to ensure the development of social housing stock to ease supply concerns, thereby "providing the basis for more sustainable long-term growth".
He also downplayed inflation concerns, pointing out household leverage was only at 45%.
He also said the savings ratio in China was currently 20-30%, compared with 4% in the US and 10% in Europe.
"The Chinese property market is the most attractive in the region," he said.
Chin said Henderson Global Investors would now focus its attention in Asia specifically on Chinese retail and the office market in Shanghai, as well as Sydney and Singapore.
"The retail sector in China will benefit from a number of macroeconomic factors," he said.
"The government wants to rebalance from an export-driven economy to consumption, and retail will be at the forefront of that."
He also pointed to rising disposable income and spending among Chinese consumers and the relative dearth of good-quality retail space.
"The rising middle class want a quality shopping environment, and millions of urbanised dwellers will need shopping space," he said.
He said Henderson Global Investors was also very keen on Australia due to its strong fundamentals and its links with China.
"Australia is very attractive," Chin said.
"Its banking is very strong, and it's essentially a proxy for China because of commodities."