• Sun. Aug 7th, 2022

Commercial real estate investments soar in 2021

The double open-air park of Taikoo Li Qiantan, a shopping complex in Shanghai. (PHOTO BY CHEN YUYU/FOR CHINA DAILY)

The volume of commercial real estate investment in mainland China reached $7.3 billion in the third quarter of 2021, and the amount for the full year is expected to exceed that of 2020, according to a report by global real estate adviser JLL.

The combined volume of commercial real estate investment in the first three quarters in mainland China was 170 billion yuan ($26.7 billion), and JLL predicted that the figure for the full year will exceed that of 2020. , when it almost reached 200 billion yuan.

Accounting for 49% of total volume in the third quarter, Shanghai remained the top destination for commercial real estate investment in China. The weight of Beijing and Guangzhou, Guangdong province decreased to some extent compared to the previous quarter, while Shenzhen, Guangdong province recorded a significant increase to 7.3% of the total.

“The development of commercial business in Shanghai is healthy and sustainable. The dynamic city is full of opportunity and takes the lead among Chinese cities in many ways,” said Kamsen Lau, CEO of Lifestyle International Holdings Ltd.

After nearly 10 years of development, Lifestyle International has officially launched its first shopping complex in mainland China, namely the Shanghai Jiuguang Center, Lau said. There are more than 400 brands in the center, of which about 30% debuted in Shanghai or north of Shanghai.

JLL statistics show that office investment took the lion’s share, or 57.6%, of commercial property investment volume in the third quarter, up 14.2% quarter-on-quarter.

Eight office spaces in China, including Beijing Financial Street, Beijing Central Business District and Pudong New Area in Shanghai, have been ranked among the 20 most expensive office spaces in the world in 2021, according to the latest Global Premium Office Rent Tracker from JLL.

The investment volume of logistics properties, especially those located in the Yangtze River Delta region, the Guangdong-Hong Kong-Macao Greater Bay Area, the Beijing-Tianjin-Hebei region, and the Chengdu-Chongqing city cluster , remained bullish in the third quarter, which was favored by institutional investors.

The volume of commercial real estate investment in the Asia-Pacific region reached $125 billion in the first three quarters, up 30% from the same period in 2020, according to JLL.

“Throughout 2021, investor interest in the Asia-Pacific region remained extremely high as capital became more active and investment volume approached pre-pandemic levels across the region. region,” said Stuart Crow, CEO of Capital Markets at JLL Asia-Pacific.

Supported by stabilized rents and occupancy rates, office investment continued to recover in the third quarter, accounting for 55% of total commercial real estate investment volume in the region. In the meantime, logistics real estate investment has continued to grow, with investment reaching $43 billion in the past 12 months, up from $25 billion in 2019.

JLL predicts that, driven by demand, attractive investment returns and a desire for diversified portfolios, logistics real estate investment could double to $50-60 billion over the 2023-25 ​​period.

Retail and hospitality investment in Asia-Pacific has been weak due to COVID-19. However, the volume of full-year hotel investments could exceed $7 billion in 2021 and could reach $9 billion in 2022, according to JLL’s report.