First China CMBS unlikely to start a dynasty

The current size of China’s real estate market, let alone its growth potential, is enough to whet the appetite of any CMBS banker. So when Citigroup Global Markets Asia and Macquarie Bank issued Dynasty Assets (Holdings)’ $145 million series 2006-1 secured floating rate notes in October, the first CMBS issue backed by mainland Chinese properties, there was reason for all banks to cheer. A closer look at the transaction however, gives cause for a more sober assessment of the potential of the market.