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BIZCHINA / Center |
Real estate market hot as ever(China Daily)
Updated: 2007-11-19 14:06 Despite warnings of a slowdown and the central government's efforts to forestall overheating, China's real estate market remained fundamentally brisk in the third quarter of 2007, according to a report by CB Richard Ellis, one of the world's largest commercial real estate services firms. BEIJING During the third quarter, demand for Beijing real estate witnessed an upswing. The prime office market was active as new occupancy reached 162,545 sq m, an 18.3 percent rise quarter-on-quarter. The average rent grew slightly, a 1.6 percent rise to 186 yuan per sq m each month. Beijing's luxury residential market in the third quarter was more active than the first half of 2007, especially in serviced apartment leasing, as many foreign enterprises renewed old contracts or signed new ones in the last three months. Serviced apartment rents rose by 1.2 percent quarter-on-quarter to 216.4 yuan per sq m a month. Big retailers are generally optimistic about retail market prospects in Beijing and are accelerating their entry. Demand for prime retail property is robust. Ground floor rents increased by 0.5 percent compared to the previous quarter while first-floor rates grew 3.3 percent quarter-on-quarter, reaching 28.6 yuan per sq m per day and 19.1 yuan per sq m per day respectively in the third quarter. Demand for industrial properties also grew steadily in the period, with average rent of industrial property 53 yuan per sq m a month, a 1.9 percent rise quarter-on-quarter, while the price of industrial land reached 1,213 yuan per sq m, a 1 percent rise. SHANGHAI Every segment of the Shanghai property market expanded in the third quarter, with the industrial property sector posting the best performance. Grade-A office rents registered 2.8 percent growth compared to the second quarter, while rents for grade-B properties increased by 2.7 percent. The vacancy rate dropped by 0.9 percentage points over the previous quarter to a record low of 3.5 percent. Metro Plaza in Changning and Urban Development International Tower in Xuhui came on stream, adding 63,667 sq m of new office space to the market. Meanwhile, the luxury residential sales market continued to rebound. New luxury property transactions reached 1,149 units a month within the quarter, 38 percent higher than the second quarter's peak. The leasing market also maintained steady performance with further growth in rentals of luxury villas and serviced apartments. In the retail sector, prime ground floor rents continued to increase, with 1.6 percent growth to 41.2 yuan per sq m per day, while increasing competition from secondary retail areas resulted in a downward correction for first floor rents in prime retail locations. The industrial land price rose by 15.6 percent quarter-on-quarter largely due to continued government control over the land supply. Land scarcity has led some companies to adopt a leasing strategy, fueling demand for high quality industrial properties. The average rent of industrial properties rose by 6.7 percent quarter-on-quarter to 33.7 yuan per sq m a month in the third quarter. GUANGZHOU Rentals for prime office and retail space, and capital values for luxury residential witnessed growth in the period. The Guangzhou prime office market was buoyant over the past three months, with the average rent and capital value of prime buildings increasing by 6.4 percent and 5.1 percent quarter-on-quarter respectively. Taihua Real Estate (China) Co paid a record price of 1.09 billion yuan to secure a plot in Pearl River New City for an office development, equivalent to a value of 11,912 yuan per sq m. Significant price increases were seen in the high-end residential market. The average value of luxury apartments grew by 10.8 percent quarter-on-quarter while that of villas rose by 11.8 percent from the previous quarter. Driven by strong demand from both multinational and domestic retailers for quality retail space, rental levels for Guangzhou prime retail properties recorded moderate increases in the quarter. Average monthly rents for ground floor space in shopping malls went up by 7.3 percent quarter-on-quarter to 47.3 yuan per sq m a day, and the overall vacancy rate dropped by 1.1 percentage points to 8.7 percent at the end of the quarter. |
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