China's ghost towns may spook retail investors, but big money players are still targeting the mainland's property sector.
For one, Ivanhoe Cambridge, the property arm of Canada's second-largest pension fund Caisse de depot et placement du Quebec, is looking to increase its investments there.
While acknowledging that the mainland suffers from "shadow cities" and overbuilding, "we have also seen a lot of opportunity," said Rita-Rose Gagne, executive vice president for growth markets at Ivanhoe Cambridge, which has more than 48 billion Canadian dollars ($36.48 billion) under management.
"The Chinese economy is shifting towards a more sustainable pace of growth ultimately, but at the end of the day it's still an important growth," she told CNBC Thursday, adding that whether the country's gross domestic product (GDP) growth rate was 4 percent or 6 percent, "it's still large amounts of growth. We believe in the mid-to-long term story."
China's GDP data often meet with skepticism. While official data show the economy grew 6.9 percent on-year in the third quarter, some analysts believe growth may actually be as slow as 4 percent. Authorities have been working to transition the economy away from investments in manufacturing and infrastructure and toward a more consumption-driven model.
Ivanhoe Cambridge, which also recently partnered with Blackstone Group to buy Stuyvesant Town-Peter Cooper Village in Manhattan for $5.3 billion, appears to be positioning for that model.
In June, it invested $500 million in Shanghai-focused commercial-property developer Chongbang Group via a capital-raising. Earlier this year it invested as much as $180 million in China warehouse properties in tie-up with CBRE Global Investments. And it has a stake in the La Nova shopping center in Changsha.
Gagne said Ivanhoe Cambridge focused on China's tier-one cities by forging relationships with strategic partners. China's tier system ranks cities on their population size, services standards and quality of infrastructure.
China's property market has shown signs of stabilizing, even in the more stagnant residential sector, with the government backtracking on some cooling measures it put in place to calm the previously overheated market. The People's Bank of China (PBOC) has also cut interest rates six times since November 2014.