Relationship Between Investment Value Of Shanghai Office Market And RMB Exchange Rate And Its Empirical Research

From 2004, against the backdrop of the expectation of continuous RMB appreciation, the enthusiasm of foreign investors, especially institutional investors, for acquiring Shanghai office projects was spurred and kept up due to the investment opportunity of both exchange and price arbitrage. The acquisition of Shanghai office, including impressive rush of en bloc office acquisition, resulted in the soaring increase in the office market. The capital value and rental price were both on the rise, but the growth in the former outpaced that in the latter, causing the gross yield to drop. As fewer stakes are laid down on expectation of RMB appreciation, the investment value and attraction of Shanghai offices to foreign investors are on the decrease.With the study methodology of combining the micro and macro analysis jointly and binding the positive and normative analysis together, this essay researches on: determination process of rent and capital value, the influence of exchange rate on real estate price and then on the investment value from macro view; and the reason why foreign investors chose Shanghai offices as acquisition targets and the detailed approaches from micro view; also the investment value decreased attributed to continues appreciation of RMB rather than "foreign investment restriction policies". Empirical research on the relationship between 2004Q1 - 2008Q1 Shanghai Grade A office gross yield and RMB exchange rate concludes with a linear regression model and forecast concerned.