Burger King move bullish for Chinese commercial real estate

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A recent article in Business Journal a bout Burger King Worldwide ( BKW , quote ) opening 1,000 new restaurants in China  offers a bullish insight into the future of the commercial real estate market in the People's Republic.

Public Domain image courtesy Chong Fat: http://zh.wikipedia.org/wiki/User:Chong_Fat Most attention on global real estate woes from the Great Recession has focused on the housing market for private residences, but the commercial sector has been pounded just as hard, if not worse.

While the Internet has not harmed the housing market, it has played havoc with the commercial real estate arena. For example, Blockbuster has gone out of business due to movies being offered over the Internet or delivered by mail. That does not happen with a home.

That Burger King Worldwide is moving into China in such a massive manner is bullish for the commercial real estate in the country for a variety of factors.

The most obvious is that there will now be 1,000 pieces of commercial real estate in China that will have a Burger King restaurant as a new tenant. The commercial real estate market in China can only benefit from that development.

The second bullish factor is that Burger King Worldwide is optimistic enough about China's future to open 1,000 new franchises. There is a great debate going on now about whether of not China will have a 'hard' landing or a 'soft' landing for its economy. Burger King Worldwide has obviously made its own decision and is moving forward to implement it with the opening of 1,000 new franchises.

Also of significance is that Beijing is welcoming new businesses into the country. That will only increase the demand for both residential and commercial real estate in China. This new demand from foreign investors, by the basic laws of supply and demand, will raise property prices in China both in the commercial real estate sector and market for homes in the People's Republic .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Stocks

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