China Real Estate Report Q3 2011
Business Monitor International, June 2011, Pages: 65
Business Monitor International's China Real Estate Report provides industry professionals and strategists, corporate analysts, real estate associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on China's Real Estate industry.
There is increasing activity and optimism in China's commercial real estate sector. The market is generally headed for a period of rising rentals and prices across the board, especially in the office sector. The office sector has seen increasing occupied space and net absorption, resulting from growing demand and company expansions. Although development has increased, supply has generally been insufficient. Rents are increasing, especially among first-tier cities (including Beijing and Shanghai), with Shanghai office rents growing at the third highest rate in the world.
Prime industrial rents in China are on an upward trend, having increased by around 15% year-on-year (yo- y) in 2010. In Shanghai in 2010, the total industrial output increased by 23% y-o-y, driving a huge demand for industrial space. The retail market in most cities is experiencing an influx of high-end international department and specialty stores.
On the whole, the residential market is extremely overvalued, and price declines are expected into the medium term. Prices are beginning to soften, as higher consumer price inflation, property cooling measures and monetary tightening measures bite. China's average home sales value declined 21% monthon- month (m-o-m) in April 2011. In March, average prices for new houses fell by 1.8% m-o-m, for the second month in a row and at a faster rate than in February. In February, sales volumes were the lowest recorded since 2009. As expectations of capital gains in the residential property sector evaporate, demand will dry up, forcing prices lower and reducing construction. This, in turn, will deliver a negative shock to related industries, leading to a decline in overall growth.
China's economy has been growing strongly, at one of the highest GDP growth rates in the world. However, there are signs of a slowdown in economic activity. Despite the solid trade figures, total retail sales and total industrial production growth are slowing, and money supply growth continues to fall. However, we still predict real GDP growth of 8.3% y-o-y for 2011.
The most important sector for Chinese economic growth is construction, and in particular construction of residential real estate. The construction sector is expected to slow in the next few years from its high growth rates, which were largely due to stimulus spending. As property cooling measures begin to take effect, residential construction especially is predicted to slow markedly. However, after overtaking the US as the world's largest construction market in 2010, China is still expected to have the world's largest construction sector through to at least 2015.
Executive Summary
SWOT Analysis
China Real Estate/Construction SWOT
China Economic SWOT
China Business Environment SWOT
Real Estate Market Overview
Office Sector
Industrial Sector
Retail Sector
Residential Sector
Real Estate Market Analysis
Table: China's Real Estate Market – Historic Rents, 2009 And 2010 (m2/month, US$)
Table: China's Real Estate Market – Net Yield, 2010 And 2011 (%)
Table: China's Real Estate Market – Terms Of Rental Contract/Lease, Mid-2010
Table: China's Real Estate Market – Available And Vacant Space, Mid-2010 (m2)
Industry Forecast Scenario
Office Sector
Retail Sector
Industrial Sector
Residential Sector
Table: China's Real Estate Market – Rentals, 2010-2012 (m²/month, US$)
Table: China's Real Estate Market – Forecast Net Yield, 2008-2015 (%)
Construction Industry Overview
Table: China Construction And Infrastructure Industry Data, 2007-2015
Table: China Construction And Infrastructure Industry Data, 2012-2020
Macroeconomic Outlook
Table: China – Economic Activity, 2008-2015
Business Environment
Real Estate/Construction Business Environment Ratings
Table: Asia Real Estate/Construction Business Environment Ratings
China's Business Environment
Table: BMI Business And Operation Risk Ratings
Table: BMI Legal Framework Rating
Table: Labour Force Quality
Table: Asia, Annual FDI Inflows
Table: Trade And Investment Ratings
Table: China Top Export Destinations, 2001-2008 (US$mn)
Competitive Landscape
Company Profiles
China Merchants Group/ China Merchants Property Development (CMPD)
China Vanke
Gemdale Corporation
Poly Real Estate Group
Shanghai Industrial Development
Shanghai Lujiazui Finance & Trade Zone
Shanghai New Huangpu Real Estate
Shanghai Wanye
Shimao Property Holdings
BMI Methodology
How We Generate Our Industry Forecasts
Construction Industry
Bank Lending
Real Estate/Construction Business Environment Rating
Table: Weighting Of Indicators
Project Finance Ratings Indicators
Table: Design And Construction Phase
Table: Commissioning And Operating Phase – Commercial Construction
Table: Commissioning And Operating Phase – Energy And Utilities
Table: Commissioning And Operating Phase – Transport
Sources
- China Merchants Group/ China Merchants Property Development (CMPD)
- China Vanke
- Gemdale Corporation
- Poly Real Estate Group
- Shanghai Industrial Development
- Shanghai Lujiazui Finance & Trade Zone
- Shanghai New Huangpu Real Estate
- Shanghai Wanye
- Shimao Property Holdings
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