Tourists admire the skyline view of Lujiazui area at the Bund in Shanghai, east China, Jan. 6, 2020. (Xinhua/Wang Xiang)
BEIJING, July 12 (Xinhua) -- CBRE, a U.S. commercial real estate consulting and investment company, has recently released its 2022 market outlook report which shows the company's long-term optimism about the commercial property market in Shanghai, reported Securities Daily.
Li Ling, president of CBRE China, said that market data showed that due to the COVID-19 pandemic, new demand for office buildings and business parks in Shanghai in the second quarter was less than 20 percent of the same period in 2021, with the rents falling continuously.
However, multiple data indicators of Shanghai's commercial property market this year are better than those in 2020, as the Shanghai Municipal People's Government has issued relevant policies, including tax reduction and relaxation of talent introduction, to support economic development.
CBRE data showed that the net absorption of the logistics market in Shanghai in the second quarter of this year was 180,000 square meters, similar to the same period of last year and much higher than the same period in 2020.
In addition, in the first half of the year, the bulk transactions in Shanghai accounted for more than 40 percent of the national total, of which foreign capital accounted for more than 30 percent, the highest in the past three years.
The bulk transactions concerning new economy real estate nationwide exceeded 25 billion yuan in the first half of the year, with those in Shanghai and the surrounding areas accounting for about 60 percent.
In particular, CBRE managed to complete two transactions of new economy real estate projects online during the period of strict control.
Although hit by the epidemic, Shanghai is still the first choice for foreign investment in China and an important destination for investment in the Asia-Pacific region, said Li, adding that Shanghai still cannot be replaced by other cities in the Asia-Pacific region.
Li predicted that the commercial real estate market in Shanghai will pick up with the recovery of the local economy.
With the effective control of the epidemic, multiple institutions are entering the office building market of Shanghai, and the demand for office building leasing may recover in the first half of next year and usher in a new peak around 2024, noted Li.
The vitality of the commercial property market during the pandemic is also related to the strategic adjustment of investors, Li pointed out, adding that an important trend of the bulk property investment market in the past three years is that the asset allocation is tilting towards new economy real estate involving logistics cold chain, science and technology parks, data centers, long-term rental apartments, etc., which reflects investors' recognition of scientific and technological innovation, urbanization and consumption upgrading.
Li has long been optimistic about the commercial property market in Shanghai, believing that Shanghai will remain the most dynamic region in the domestic market for at least a decade. "Commercial real estate investment is a mid- and long-term investment behavior, and the short-term fluctuations caused by emergencies will not break the original operating rules and cycles of the market", Li said.
(Edited by Zhang Yao, Gu Shanshan with Xinhua Silk Road, gushanshan.1987@163.com)
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