China’s commercial property sector in Beijing is experiencing a rise in demand despite an overall real estate downturn. Rents for prime retail locations in the capital city have increased by 1.3% in the first quarter of 2024 compared to the previous quarter, according to a report from property consultancy JLL. The demand is being driven by new food and beverage brands, niche foreign fashion offerings, and electric car companies, with JLL anticipating this trend to continue throughout the year.
Sales of offices and commercial properties have seen a 15% and 17% increase in floor area, respectively, in January and February compared to the same period last year, while residential property sales have dropped by nearly 25%. The COVID-19 pandemic had reduced demand for commercial properties in China, but the economy is slowly rebounding from the impact.
Despite the market downturn, China’s commercial real estate prices are becoming more attractive for buyers, with opportunities opening up for potential deals. Raffles Family Office is eyeing commercial properties in Shanghai and Beijing for potential investments in the coming year. Swire Properties, a Hong Kong-based company, plans to double its gross floor area in mainland China by 2032, citing improved foot traffic and retail sales in its shopping complexes.
Overall, the commercial property market in China is showing signs of stabilization, with companies like Swire Properties remaining optimistic about future prospects in the retail and office sectors.
China’s commercial property sector is experiencing pockets of demand amidst an overall real estate slump. In Beijing, rents for prime retail locations are increasing at the fastest pace since 2019, driven by new food and beverage brands, niche foreign fashion offerings, and electric car companies. Commercial real estate sales are rising while residential property sales are falling, with the pandemic playing a role in reducing demand. However, commercial real estate prices are approaching attractive levels for buyers, with opportunities expected to open up in the second half of the year. Swire Properties plans to expand its presence in mainland China, anticipating a stabilization in retail demand in 2024.
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