Despite rising economic risks and full valuations, Colliers International reveals in China Investment Property Report that market continues to offer attractive opportunities.
Colliers International a global leader in commercial real estate services, today launched a new China Investment Property report outlining new investment opportunities in China’s commercial property market.
China Investment Property Report at a glance:
Source: Colliers International China Investment Property Report
WILLIAMS MEDIA spoke to Betty Wong, National Head of China Capital Markets and Investment Services Colliers International, who said, “China is one of the most active real estate markets in Asia. The transaction values of investment property in China reached USD36.9 billion (RMB236.2 billion) in 2017, 2.6x the transaction volume in 2007.
"High liquidity in the market in search of returns has pushed up capital values for commercial property, depressing net yields across the various property sectors. Grade A office property in Tier 1 cities now yields only 3.6-4.0%. Yields remain higher for retail, industrial and business park assets, lying in a range of 4.0-6.7%,” she said.
East China
Shanghai business park assets are likely to see more investment growth than offices, with rent rising due to a growing high-tech sector and better infrastructure. Retail property also remains optimistic, which yields 4.0-6.5%. Logistics trends are bright, with rent and prices rising and assets available in outlying cities. Looking ahead, long-term rental apartments are emerging as an appealing new sector due to government efforts to promote the rental market.
North China
Decentralised areas of Beijing still offer attractive office assets. Business parks offer appealing yields of 4.2-4.8%. Trends in logistics are positive; however, there is likely going to be more activity in cities such as Tianjin and Langfang due to lack of assets in Beijing. Logistics growth should benefit Shenyang, the hub of the North East.
South China
South China is expected to attract more international investor interest as a result of the Greater Bay Area (GBA) initiative. In the office sector, Shenzhen is forecast to yield high rental growth, while Guangzhou’s Pazhou district is likely to develop into a new CBD attracting new office investment. Logistics assets are in short supply in Shenzhen and Guangzhou, therefore investors should turn to adjacent cities instead such as Dongguan and Foshan. Ample new retail supply will also create new opportunities in the long run.
West China
West China continues to offer good value for investors. Grade A offices in Chengdu yield 5.7%, and the Financial Town area offers ample supply and strong policy support. There are also good opportunities in business park assets, which yield 7-8%, notably in South Hi-Tech district. Despite the current scarcity of assets, Chengdu is rapidly growing into a key logistics hub. Looking ahead, further logistics development is expected to shift toward new areas east of the city.
Click here to view Colliers International China Investment Property Report.
For more information or to discuss the report phone or email Betty Wong, National Head of China Capital Markets and Investment Services Colliers International, via the contact details listed below.
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