1、 1 Property Times Shanghai Q1 2010 Office rental levelling out 14 April 2010 Contents Executive summary 1 2 Economic overview 2 Offices 3 Retail 4 Industrial 5 Key statistics 6 Residential 7 Investment 8 Definitions 9 Contacts 10 Author Shaun Brodie Head of Research, East China +86 21 2208 0529 Co
2、ntacts David Ji Head of Research, North Asia +852 2507 0779 David Green-Morgan Head of Research, Asia Pacific +61 (0) 2 8243 9913 david.green- Tony McGough Global Head of Forecasting and Strategy DTZ Research +44 (0)20 32962314 Hans Vrensen Global Head of Research +44 (0)20 3296 2159 The average
3、city-wide grade A office transacted rental was RMB 6.1 (US$0.89) per sq m per day at the end of Q1 2010. The average availability ratio reached 13.9%, which was a decrease of 1.6 percentage points quarter-on-quarter (q-o-q) and a decrease of 3.0 percentage points year-on-year (y-o-y). We expect the
4、DTZ Shanghai grade A office index to stabilise before increasing gradually (Figure 1). Overall rental in our five selected retail hubs increased 1.60% q-o-q to reach RMB 50.76 (US$7.43) per sq m per day. The overall average occupancy rate for retail saw a slight decrease of 1.45 percentage points q-
5、o-q to reach 89.81%. Entering 2010, there are signs that the industrial market is undergoing a gradual recovery. New supply remained the same as last quarter and the availability ratio continued to descend to reach 7.87%. There was a slight increase in rentals this quarter. In January and February,
6、130,005 sq m of new supply entered the high-end residential market. The transaction volume over the same period was only 141,449 sq m, a drop of 62.6% on the November and December figure for the last quarter. Meanwhile, in February, the average transaction price of high-end non-serviced apartment in
7、creased to reach RMB 48,211 (US$7,059) per sq m (a growth of 1.1% month-on-month (m-o-m). However, the villa sector saw a m-o-m decrease of 15.3% in price, reaching a figure of RMB 51,631 (US$7,559) per sq m. Figure 1 DTZ grade A office index (2000 2013F) Source: DTZ Research 90 120 150 180 210 240
8、270 Grade A of f ic e rent al Grade A of f ic e pric eD T Z I n d ex (Q1 20 00 = 10 0)Economic overview 2 Shanghais 2009 GDP increased by 8.2% to reach RMB 1,490.1 billion (US$218.2bn). Disposable income per capita reached RMB 28,838 (US$4,222) in Q4 2009, an increase of 8.1%. In 2009, total indust
9、rial output (above a designated size) increased by 3.2% to reach RMB 2,387.3 billion (US$349.5bn). From January to December, real estate investment increased 7.1% to reach RMB 146.4 billion (US$21.4bn). The investment growth rate in the office sector only increased by 1.6%. In December 2009, Shangha
10、is consumer price index (CPI) increased by 1.2% y-o-y. From January to December, the CPI decreased by 0.4%. At the same time, retail sales increased significantly q-o-q, reaching RMB 517.3 billion (US$75.7bn), an increase of 14% y-o-y. In December 2009 utilised foreign direct investment (FDI) increa
11、sed by 19.6% y-o-y to reach USD 0.917 billion. From January to December, accumulative utilised FDI reached USD 10.538 billion, an increase of 4.5% y-o-y. Table 1 Economic indicators Indicator Period Unit Value Change y-o-y (%) GDP 2009 RMB100 million 14,901 8.2 Total industrial output (above a desig
12、nated size) 2009 RMB100 million 23,873 3.2 Disposable income per capita 2009 RMB 28,838 8.1 FDI utilised 2009 USD100 million 105.38 4.5 Real estate investment 2009 RMB100 million 1,464 7.1 Consumer price index December 2009 - 101.2 1.2 Source: Shanghai Statistics Bureau Offices 3 This quarter saw o
13、ne building complete within the citys grade A office market - Poly Plaza in Pudong. This completion brought 40,854 sq m of new supply to Shanghai. Q1 2010 witnessed a levelling out of the DTZ grade A office index (Figure 2) due to demand holding up. Net absorption reached 12,500 sq m this quarter. R
14、egarding rental, the average city-wide transacted rental was RMB 6.1 (US$0.89) per sq m per day at the end of Q1 2010 (Table 2). Compared with the rental for the last quarter (which was RMB 6.2 (US$0.91) per sq m per day), this was a decrease of 1.61% q-o-q. Compared with the rental one year ago, th
15、is was a decrease of 20.6% y-o-y. With regards to availability ratio this quarter, the average availability ratio reached 13.9%, which represented a decrease of a 1.6 percentage points q-o-q (Table 2) and a decrease of 3.0 percentage points y-o-y respectively. Shanghais economy has been steadily rec
16、overing over the past year. We have seen a pickup in FDI as well as employment figures. A continuation of this trend will support the citys office leasing market sector for the remainder of the year. Along with the fast approaching Shanghai Expo, the ongoing postponement of project completion times
17、and some of the new supply being recently sold for self-use, we believe that the availability ratio in the market will continue to ease while rentals could see the start of a gradual uplift going into the rest of the year. On the supply front, we expect that 0.4 million sq m of leaseable grade A off
18、ice space will complete this year which is significantly lower than what was estimated a year ago. In the next 12 months, we expect the DTZ Shanghai grade A office index to stabilise and then increase gradually (Figure 2). On the back of a lower-than-expected new supply volume and continued demand (
19、Figure 3), we estimate a 5% rental uplift. Recent transactions Publicis Groupe leased 10,200 sq m in the Exchange - SOHO, Jingan. Bank of Communication Schroder Fund leased 4,900 sq m in IFC II, Pudong. GTJA Allianz Fund leased 2,660 sq m in DBS Tower, Pudong. Jaguar leased 1,890 sq m in Mirae Asset
20、 Tower, Pudong. Table 2 Grade A office market statistics District Total stock (sq m) Availability ratio (%) Average rental (RMB/sq m /day) Rental change q-o-q (%) Pudong 2,108,660 17.5 6.34 -0.31 Hongkou 76,000 21.5 4.50 0 Huangpu 748,469 10.6 5.78 -2.36 Luwan 471,766 7.7 7.11 -1.66 Zhabei 184,286 5
21、2.7 4.00 0 Jingan 586,054 9.9 7.45 0 Changning 942,782 7.9 4.91 -3.54 Xuhui 601,753 10.2 6.23 -5.18 Overall 5,719,770 13.9 6.10 -1.61 Source: DTZ Research Figure 2 DTZ grade A office index (2000 2013F) Source: DTZ Research Figure 3 Grade A office new supply, net absorption and availability ratio (20
22、00 2010F) Source: DTZ Research 90 120 150 180 210 240 270 Grade A of f ic e rent al Grade A of f ic e pric eD T Z I n d ex (Q1 20 00 = 10 0)05101520250200, 000400, 000600, 000800, 0001, 000, 0001, 200, 00000 01 02 03 04 05 06 07 08 09 10FA va i l ab i l i ty r ati o (% )GF A , sq mN ew s upply N et
23、ab s orp t ion Av aila bilit y rat ioRetail 4 There was no new supply in our selected five retail hubs this quarter, leaving total stock at 1,800,815 sq m (Table 3). Due to many retail projects delaying their opening times to 2010, it is expected that a large amount of new supply will enter the mar
24、ket this year. One example of this new supply is the Shanghai International Finance Centre shopping centre which is planned to open in Q2 2010. This shopping centre is expected to transform the retailing environment in the Lujiazui area. We expect four projects to complete in Q2 2010 in Shanghai. Th
25、ree of them will be located in our selected retail hubs. The total retail GFA of these selected hub projects is estimated to be around 279,389 sq m (Table 3). All five retail hubs saw their average rental increase during this quarter (Table 3). Due to the brand repositioning coming to an end in seve
26、ral projects on Huaihai Rd, the average rental of this area went up about 7.15% q-o-q. As retailers had a great sales season in Q1 2010, Nanjing West Rd and Xujiahui business hubs saw their rental increase around 2%. From an overall perspective, rental for our five selected retail hubs increased 1.6
27、0% q-o-q to reach RMB 50.76 (US$7.43) per sq m per day this quarter. This trend can be seen in the DTZ high-end retail index (Figure 4). In terms of the overall average occupancy rate for retail in our five selected hubs, this quarter the rate saw a slight decrease of 1.45 percentage points q-o-q to
28、 reach 89.81%. The forthcoming Shanghai Expo and the global economic recovery will drive the total retail sales of consumer goods in Shanghai to reach an estimated RMB 600 billion (US$87.8bn) in 2010. Therefore, we believe an upward trend in Shanghai high-end retail rentals will continue for the res
29、t of 2010. Recent transactions Yishaoweide Fitness Club leased 2,680 sq m in Bailian You Yi Cheng, Yangpu district. Toms World leased 2,000 sq m in Bailian You Yi Cheng, Yangpu district. Fu Ling Xuan leased 1,850 sq m in Infinity Mall, Luwan district. Pankoo Korean Restaurant leased 550 sq m in Plaz
30、a 889, Jingan district. Table 3 High-end retail market statistics Total stock (sq m) New supply (sq m) Average rental (RMB/sq m /day) q-o-q change (%) Lujiazui 541,000 - 35.5 0.74 Nanjing East Rd 360,128 - 51.7 1.53 Huaihai Middle Rd 368,792 - 42.6 7.15 Nanjing West Rd 285,895 - 75.5 2.03 Xujiahui 2
31、45,000 - 62.6 2.23 Overall 1,800,815 - 50.76 1.60 Source: DTZ Research Figure 4 DTZ high-end retail index (Q1 2006 Q1 2010) Source: DTZ Research Table 4 Selected high-end retail future supply Retail hubs Selected projects Estimated launching date Lujiazui Shanghai International Finance Centre Q2 201
32、0 Nanjing East Rd Agile International Plaza Q2 2010 Nanjing East Rd Henderson Project (155) Q2 2010 Source: DTZ Research 80 85 90 95 100 105 1 10 1 15 2006 2007 2008 2009 2010D T Z I n d ex ( Q1 2006 = 100)Industrial the recently introduced property market cooling policies; the newly implemented loa
33、n tightening measures and the traditionally slow Chinese New Year holiday period. On top of this, the NPC and CPPCC session meeting was held in March and many potential buyers opted to wait and see whether any new cooling policies would be introduced. Despite a drop in transaction volume, the averag
34、e transaction price of high-end non-serviced apartments continued to increase. In February, it reached RMB 48,211 (US$7,059) per sq m (a growth of 1.1% m-o-m). However, in the villa sector, due to the lower quality of newly launched projects, the price decreased by 15.3% (m-o-m) to reach RMB 51,631
35、(US$7,559) per sq m (Table 8). As for the high-end residential projects in DTZs selected basket, the average asking price rose 6.9% while rental dropped 2.1% in Q1 (Figure 7). This quarter, Huangpu district displayed the highest average transaction price: RMB 73,826 (US$10,809) per sq m. This was fo
36、llowed by Luwan district. Into Q2, transaction volume is estimated to remain lower than the corresponding figures seen a year ago while price is expected to hold up. Recent transactions Up to 15 March, 20 residential plots were transacted this quarter. Six plots were bought at total prices that were
37、 over RMB 1 billion (US$146m). OCT Properties paid RMB 7.02 billion (US$1,028m) for one piece of land located in Zhabei district. The floor price reached RMB 52,855 (US$7,739) per sq m, which was a new high in terms of floor price paid. Table 8 High-end residential market statistics New supply (sq m
38、) Transaction volume (sq m) Price (RMB/ sq m) Rental (RMB/ sq m /month) Non-serviced apt 71,653 87,502 48,211 99.63 Serviced apt - - - 236.59 Villa 58,352 53,947 51,631 102.88 Note: Date as of February 2010. Source: DTZ Research Figure 7 DTZ high-end residential index (Q3 2005 Q1 2010) Note: Date as
39、 of February 2010. Source: DTZ Research Figure 8 High-end non-serviced apartment price by district as of Q1 2010 Note: Date as of February 2010. Source: DTZ Research 60 80 100 120 140 160 180 200 220 2005 2006 2007 2008 2009 2010H igh - end res iden t ial rent al H igh - end res iden t ial pric eD T
40、 Z I n d ex (Q3 200 5 = 100 )0 15, 000 30, 000 45, 000 60, 000 75, 000 90, 000 H u a n g p u L u w a n J i n g a n Xu h u i C h a n g n i n g H o n g k o u Pu d o n gR M B / sq mInvestment 8 Shanghais property investment market continued to enjoy a stable performance this quarter. Domestic investor
41、s were still the most active investors in the market, while foreign investors have been gradually coming back to the market, albeit with a cautious attitude. During the quarter, up to 10 March 2010, 42 major transactions (each with a unit value of more than US$10m) were completed (Table 9). This rep
42、resents a 7.69% increase compared to last quarter. Three out of the 42 deals were en-bloc building transactions (Table 11) and the rest were land transactions. During this quarter, several land transactions notched up new pricing records for the Shanghai market. We noted that high-end residential an
43、d mixed use transactions still dominated the market with 15 and 18 major transactions respectively completing in Q1 (Table 9). In monetary terms, the total consideration of major deals reached RMB 66.32 billion (US$9.71bn) in Q1 2010, up to 10 March 2010. In terms of value, high-end residential and
44、mixed use transactions dominated recording total values of RMB 20.38 billion (US$2.98bn) and RMB 41.69 billion (US$6.10bn) respectively for the quarter (Table 10). In contrast to last quarter, foreign institutional funds not only acted as vendors of property but also became purchasers. For example,
45、Mirae Asset bought Shama Luxe (Lakeville Regency Block 18) from Socam for RMB 920 million (US$135m) in Q1 2010. However, domestic investors still dominated the purchaser side, one such example being the purchase of Shanghai Garden Plaza by Forte Group from Goldman Sachs (Table 11). Going forward, we
46、 expect the Shanghai investment market to continue to see steady performance for the remainder of the year. Investors are expected to focus their interest on commercial properties with good transportation connectivity. Table 9 Total number of major deals Q1 2009 Q4 2009 Q1 2010 High-end residential
47、1 9 15 Office 2 5 2 Industrial 1 5 4 Retail 1 5 3 Mixed use 4 15 18 Others 1 0 0 Total 10 39 42 Source: DTZ Research. Table 10 Total consideration of major deals (RMB million) Q1 2009 Q4 2009 Q1 2010 High-end residential 213 5,487 20,381 Office 3,176 5,946 1,719 Industrial 83 503 1,161 Retail 83 925
48、 1,368 Mixed use 1,111 15,822 41,690 Others 487 0 0 Total 5,153 28,683 66,320 Source: DTZ Research Table 11 Significant deals Property Submarket Sector Price (RMB million) Shama Luxe (Lakeville Regency Block 18) Luwan district Residential 920 Shanghai Rose Plaza Hongkou district Office 1,455 Shangha
49、i Garden Plaza Changning district Residential 2,240 Source: DTZ Research Definitions 9 Availability Total floorspace in properties marketed as available to let, whether physically vacant or occupied, and ready for occupation immediately. Availability Ratio Total space currently available as a percentage of the total stock of floorspac
