1、 1 Property Times Beijing Q1 2010 Land market very active 14 April 2010 Contents Executive summary 1 2 Economic overview 2 Offices 3 Retail 4 Key statistics 5 Residential 6 Investment 7 Definitions 8 Contacts 9 Author Kumi Liu Assistant Research Manager +86 10 8519 8105 Contacts Sabrina Wei Head o
2、f Research, North China +86 10 8519 8087 David Ji Head of Research, North Asia +852 2507 0779 David Green-Morgan Head of Research, Asia Pacific david.green- Tony McGough Global Head of Forecasting and Strategy DTZ Research Hans Vrensen Global Head of Research The Beijing grade A office market ex
3、perienced a small rebound in the first quarter of 2010, with grade A rents increasing by 1.62% quarter-on-quarter (q-o-q) to reach RMB 149.5 (US$21.9) per sq m per month. Meanwhile, the overall availability ratio for grade A office space fell from 19.9% to 18.1%. Average rents are expected to contin
4、ue to increase over the next five years (Figure 1). The overall retail market remained stable, with average rents increasing only slightly. Leasing activity in the luxury residential market dipped. The average rent dropped from RMB 138.6 (US$20.3) to RMB 129.7 (US$19) per sq m per month. By contrast
5、, in the sales market, the average price increased by 10.3% to reach RMB 35,714 (US$5,229) per sq m. Total investment transactions increased by 89.5% q-o-q. The land market remained active. As for en-bloc transactions, investment in commercial property slowed. Figure 1 DTZ office index (2005 2014F)
6、Source: DTZ Research 80 90 100 1 1 0 120 130 140 150 160 O f f i c e r e n t O f f i c e p r i c eD T Z I n d e x ( 2 0 0 6 Q 1 = 1 0 0 )Economic overview 2 In 2009, Beijings macro economy continued to grow steadily. GDP reached RMB 1,186.6 billion (US$173.7bn), representing an increase of 10.1% ye
7、ar-on-year (y-o-y) (Table 1). Compared to 2008 when it declined by 3% y-o-y, total fixed asset investment showed a remarkable recovery in 2009, increasing by 26.2% y-o-y to reach RMB 485.8 billion (US$71.1bn). This included a 22.5% increase in total real estate development to reach RMB 233.8 billion
8、 (US$34.2bn). Table 1 Economic indicators Indicator Period Unit Value Change y-o-y (%) GDP 2009 RMB 100 million 11,865.9 10.1 Tertiary industry GDP 2009 RMB 100 million 9,004.5 10.3 Disposable income per capita 2009 RMB 26,738 8.1 FDI utilised 2009 USD 100 million 61.2 0.6 Fixed asset investment 200
9、9 RMB 100 million 4,858.4 26.2 Source: Beijing Statistics Bureau Offices 3 There was no new supply in Q1 2010. Total overall stock of grade A offices remained at 6,160,760 sq m (Table 2). Compared with the previous quarter, Q1 2010 saw a marked increase in demand for office space. Total net absorpt
10、ion was 111,232 sq m over the quarter. Whilst domestic companies still played an important role in office take-up, some foreign companies showed signs of loosening their purse strings, further boosting demand (Figure 3). Increased demand eased the pressure on landlords to secure tenants and some cho
11、se to raise rents. Rents increased by1.62% q-o-q to reach RMB 149.5 (US$21.9) per sq m per month. The availability ratio dropped by 1.8 percentage points to 18.1%. Of all the districts, Financial Street saw the biggest improvement in market performance, with rents increasing by 4.78% q-o-q to reach
12、RMB 181.3 (US$26.5) per sq m per month, whilst the availability ratio dropped to 7.7% (Table 2). In terms of the sales market, the average price increased from RMB 31,808 (US$4,657) per sq m to RMB 32,323 (US$4,732) per sq m (Figure 2). Despite signs of improving demand, several projects delayed the
13、ir launch dates. More than 960,000 sq m of office space is scheduled to come onto the market in the remainder of the year (Figure 3). This significant amount of new supply will exert great pressure on the grade A office market. Although rents are expected to remain stable, availability is likely to
14、increase. Nevertheless, in anticipation of a steadily recovering economy, we expect average rents to increase over the forecast horizon (Figure 2). Recent transactions Trimble China leased 1,700 sq m in Zhonghai Plaza, CBD, Chaoyang. China Art and Entertainment Group leased 12,500 sq m in Easy Home
15、Tower, East 2nd Ring Road, Dongcheng. Halliburton leased 3,800 sq m in World Financial Centre, CBD, Chaoyang. Table 2 Grade A office market statistics District Total stock (sq m) Availability ratio (%) Rent (RMB/ sq m/ month) Rent change q-o-q (%) CBD 1,989,164 22.7 156.7 3.22 East 2nd Ring Road 419
16、,652 28.1 150.2 2.36 East Changan Avenue/ Jianguomen 745,106 14.1 137 -2.67 Financial Street 938,659 7.7 181.3 4.78 Lufthansa 609,525 22.2 139.8 -4.21 Zhongguancun 756,723 4.4 132.2 0.42 Overall 6,160,760 18.1 149.5 1.62 Source: DTZ Research Figure 2 DTZ office index (2005 2014F) Source: DTZ Researc
17、h Figure 3 Supply, net absorption and availability ratio (2000 2010F) *Net absorption and availability ratio for 2010 are as of Q1; new supply is the estimation for 2010 Source: DTZ Research 80 90 100 1 1 0 120 130 140 150 160 O f f i c e r e n t O f f i c e p r i c eD T Z I n d e x ( 2 0 0 6 Q 1 =
18、1 0 0 )0 5 10 15 20 25 0 200 400 600 800 1 , 0 0 0 1 , 2 0 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010FN e w s u p p l y N e t a b s o r p t i o n A v a i l a b l i t y r a t i o ( % )A v a i l i a b l i t y r a t i o ( % )G F A , s q m ( 0 0 0 s )Retail 4 In 2009, the Beijing consumer
19、 goods market continued its rapid growth. Total sales of consumer goods amounted to RMB 531 billion (US$77.7bn), up 15.7% y-o-y (Figure 4). Cuiwei Plaza, in Gongzhufen on the West 3rd Ring Road, added 37,600 sq m of retail space to the market (Table 3). In Q1 2010, the average rental in the Beijing
20、retail market increased slightly. In some well-operated projects which have opened in the past 2-3 years, the rental for new tenants increased. Due to leasing pressures, some projects which had delayed their launch date chose to open earlier, whilst poorly operated projects adjusted their tenant mix
21、 in an attempt to rebuild project identity. These measures did manage to improve the projects attractiveness and customer flow. In spite of the global economic downturn, Chinas luxury goods market boomed in 2009, with a surge in demand and increasing sales income. There is no doubt that this will st
22、rengthen the confidence of tenants and landlords in the retail market. In addition, with the improving world economy, multinational brands have started to pick up and seek opportunities again. We expect to see increased expansion amongst existing brands and an increase in new brands entering the Bei
23、jing retail market. As such, the market will continue to be active. Recent transactions South Beauty restaurant opened a 1,870 sq m outlet in Cuiwei Plaza, Haidian. Wudirenjia restaurant opened a 1,650 sq m outlet in Cuiwei Plaza, Haidian. Honey-moon Dessert opened a 50 sq m store in The Mall at Ori
24、ental Plaza, Dongcheng. Figure 4 Total retail sales of consumer goods (2004 - 2009) Source: Beijing Statistics Bureau Table 3 Shopping mall statistics District Total stock (sq m) New supply (sq m) Rental range (RMB/sq m/month) Asian Games Village 71,000 - 250 - 750 CBD 365,000 - 350 - 1,500 Chaowai
25、165,000 - 500 - 800 Lufthansa 196,000 - 280 - 900 Sanlitun 208,800 - 280 - 900 Wangfujing/East Changan Avenue 420,000 - 780 - 2,400 Wangjing 419,000 - 250 - 700 Xidan 110,000 - 350 - 1,000 Zhongguancun 343,000 - 280 - 700 Others 2,074,600 37,600 - Overall 4,372,400 37,600 - Source: DTZ Research Tabl
26、e 4 Prime projects rental in Q1 2010 District Project Asking rental (RMB/sq m/month) Wangfujian/ East Changan Ave Oriental Plaza 550 - 2,400 CBD China World Shopping Mall 300 - 1,500 Zhongguancun Zhongguancun Plaza Shopping Center 240 - 800 Source: DTZ Research 01002003004005006002004 2005 2006 2007
27、 2008 2009R M B b i l l i o nKey statistics occupier market 5 Table 5 Occupier market Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 q-o-q change (%) y-o-y change (%) Directional outlook CBD office Net absorption, accumulative (GFA, sq m) -28,381 90,805 110,282 123,326 60,210 - - Availability (GFA, sq m)
28、537,211 543,770 524,292 511,249 451,038 -11.8 -16.0 Availability ratio (%) 28.83 27.34 26.36 25.7 22.67 -11.8 -21.4 New supply, accumulative (GFA, sq m) 227,847 353,592 353,592 353,592 - - - Prime rents (NLA, RMB/sq m/month) 219.12 196.97 215.78 213.17 219.96 3.2 0.4 Beijing retail Net absorption, a
29、ccumulative (GFA, sq m) 76,634 417,637 406,551 447,891 116,776 - - Availability (GFA, sq m) 851,913 780,910 941,996 953,650 874,480 -8.3 2.6 Availability ratio (%) 22.06 18.9 22 22 20 -9.1 -9.3 New supply, accumulative (GFA, sq m) 146,000 416,000 566,000 619,000 37,600 - - Prime rents (NLA, RMB/sq m
30、/month) 894.5 894 850 850 856 0.7 -4.3 Source: DTZ Research Table 6 Leasing transactions Property name/Address Submarket Size (sq m) Tenant Sector Zhonghai Plaza CBD 1,700 Trimble China Office Easy Home Tower East 2nd Ring Road 12,500 China Art and Entertainment Group Office World Financial Centre C
31、BD 3,800 Halliburton Office Cuiwei Plaza Others 1,870 South Beauty Restaurant Retail Cuiwei Plaza Others 1,650 Wudirenjia Restaurant Retail The Mall at Oriental Plaza Wangfujing/East Changan Avenue 50 Honey-moon Dessert Retail Source: DTZ Research Residential 6 With weakened demand over the traditi
32、onal holiday season, the average rental in the luxury residential leasing market declined by 6.3% q-o-q to reach RMB 129.7 (US$19) per sq m per month. The vacancy rate increased by 2.3 percentage points to reach 26.2% (Table 7). In recent years, new supply in the high-end residential market has incr
33、eased markedly. Many buyers of these new projects do so as a property investment. Due to ample supply, landlords not only have to compromise on price but also provide better furniture and decoration in order to secure tenants. As a result, rents for luxury accommodation have remained stagnant. In fa
34、ct, many units offered special holiday discounts in addition to lowering rents. In Q1 2010, the average rental for leased apartments and villas declined by 10.2% and 8.9% q-o-q to reach RMB 94.3 (US$13.8) per sq m per month and RMB 107.1 (US$15.7) per sq m per month respectively (Table 7). In Q1 201
35、0, prices in the luxury residential market increased by 10.3% q-o-q to reach RMB 35,714 (US$5,229) per sq m (Figure 5). The average transacted price in major business areas such as CBD or Lufthansa has now exceeded RMB 40,000 (US$5,856.5) per sq m. Transacted prices of projects in prime locations re
36、ached a high of between RMB 50,000 (US$7,320.6) and RMB 60,000 (US$8,784.8) per sq m (Figure 6). With the cancellation of some preferential policies, the ensuing strict credit policy made more potential buyers put their purchase plans on hold. Consequently, the transaction volume decreased slightly.
37、 However, in the luxury residential market, developers who have projects in prime locations showed strong confidence and shared an optimistic outlook on the market. They believe that these fluctuations are a short-term phenomenon and are not likely to lead to a crash in prices. As for the leasing ma
38、rket, market demand is expected to pick up as workers head back to the city after the holidays. This will drive up the rental level in Q2 2010. Table 7 Luxury residential market statistics Rental (RMB/sq m/month) q-o-q change (%) Availability ratio (%) q-o-q change (%) Leasing apartment 94.3 -10.2 2
39、6.9 9.1 Serviced apartment 170 3.1 30.2 0.4 Villa 107.1 -8.9 17.6 0.4 Overall 129.7 -6.4 26.2 2.3 Source: DTZ Research Figure 5 DTZ residential index (Q1 2005 - Q1 2010) Source: DTZ Research Figure 6 Primary residential price by district (Q1 2010) Source: DTZ Research 801001201401601802002005 2006 2
40、007 2008 2009 2010R e s i d e n t i a l r e n t R e s i d e n t i a l p r i c eD T Z I n d e x ( 2 0 0 6 Q 1 = 1 0 0 )01 0 , 0 0 02 0 , 0 0 03 0 , 0 0 04 0 , 0 0 05 0 , 0 0 0A s i a n G a m e s V i l l a g eC B D E a s t C h a n g a n A v e n u eF i n a n c i a l S t r e e tL i d o L u f t h a n s a
41、 S h u n y i 2nd E m b a s s y D i s t r i c tR M B / s q mInvestment 7 In Q1 2010, 41 major transactions were recorded in Beijing, one of which was an en-bloc transaction. In the land market, residential and mixed use sites dominated transactions (Table 8). In Q1 2010, Beijings land market was ver
42、y active and transaction volumes surged. The total consideration of major deals amounted to RMB 58.7 billion (US$8.6bn), representing an increase of 89.5% q-o-q. A large amount of land with planning permission and high land prices were the main drivers of the market. For example, China Overseas Prop
43、erty bought residential land worth RMB 5.97 billion (US$870m) in Fengtai district, and Sino Ocean purchased a mixed use site for RMB 4.08 billion (US$597m) at an accommodation value of RMB 24,066 (US$3,524) per sq m (Table 9, Table 10). Due to the rapid increase in residential sales prices, as well
44、as high land values, some investors opted to buy old apartment projects at lower-than-market prices for strata-title sale after renovation. Investment in the office sector slowed as a result of extremely high capital prices but poor rental returns (Table 10). Table 8 Total number of major deals Q3 2
45、009 Q4 2009 Q1 2010 Residential 15 7 18 Office 5 1 2 Retail 8 5 9 Industrial 6 6 2 Mixed 4 6 8 Others/ Unknown 0 2 2 Total 38 27 41 Source: DTZ Research Table 9 Total consideration of major deals (RMB 100 million) Q3 2009 Q4 2009 Q1 2010 Residential 117.9 129.3 344.77 Office 29.2 23.4 10.37 Retail 7
46、0.4 53.5 40.65 Industrial 6.4 10.8 14.83 Mixed 71.2 91.1 151.12 Others/ Unknown 0 1.6 25.24 Total 295.1 309.7 586.98 Source: DTZ Research Table 10 Significant deals Property Submarket Sector Price (RMB billion) Site A, Liujuan, Fengtai district Others Residential 5.97 Site No.1, land reserved for en
47、vironment restoration project, Dawangjing, Chaoyang District Others Mixed 4.08 Site XI-1B, residential and retail project, Yizhuang, Daxing district Others Mixed 5.24 Source: DTZ Research Definitions 8 Availability Total floorspace in properties marketed as available to let, whether physically vaca
48、nt or occupied, and ready for occupation immediately. Availability Ratio Total space currently available as a percentage of the total stock of floorspace. Development Pipeline Comprises two elements: 1. Floorspace in course of development, defined as buildings being constructed or comprehensively re
49、furbished to grade A standard. 2. Schemes with the potential to be built in the future, through having secured planning permission/development certification. Net Absorption The change in the total of occupied floorspace over a specified period of time, either positive or negative. New Supply Total market
