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SHANGHAI-Government measures have so far failed to slow foreign investment in Shanghai's commercial real estate industry. New figures released by the Shanghai Municipal Statistics Bureau for the first three quarters of 2006 reveal the local real estate industry attracted $2.42 billion of inward investment, some 1.4 times that of the same period of last year.

Although the number of projects fell by 3.2% to 2,937, the volume of total investment from all investors topped $10.83 billion, growing 1.1%. Overseas companies have switched their strategy as the government made it more difficult for them to invest. Increasingly they have sought equity investments recognizing those as the best way to invest in the sector.

As an example of foreign investors' tenacity, Hines recently won the right to develop C5 block in Shanghai. The American developer acquired 251,776 sm of land for two residential buildings and another two mixed-use projects. Hines is undertaking the development with locally based Shanghai Chengtou. Meanwhile, Rreef, the real estate and infrastructure investment management arm of Deutsche Bank, recently unveiled a $225 million development with three other partners in Guangdong.