Shanghai's real estate market remained robust in the first
quarter, with the office and industrial sector particularly strong,
according to the latest report from leading real estate consultancy
Jones Lang LaSalle.
Average office rents across the city reached 7.82 yuan per
square meter per day, up 0.7 percent from the last quarter, while
vacancies remained low at only 4.9 percent.
A-grade premium office rentals were especially strong, with
brisk pre-leasing activity from multinationals and financial
institutions, the report said.
The A-grade office market will maintain its strong momentum up
to 2010, when the city hosts the World Expo, and office rents are
expected to continue rising until then, said Anthony Couse,
managing director of Jones Lang LaSalle (Shanghai).
The industrial property sector, which includes logistics,
business parks and manufacturing facilities, also remained robust
in the first quarter, pushed up by retailers, third-party logistics
firms and automotive companies, the report said.
Rents for logistics facilities increased briskly, up 11 percent
since the last quarter, largely driven by rapid increases in bonded
logistics rents, as the world's leading logistics firms and freight
forwarders continued to build warehousing and distribution centers
in the city.
German logistics giant DHL, for example, is building 100,000
square meters of warehouse space in Shanghai.
Meanwhile, overall retail space vacancies declined for the
second consecutive quarter to 7.5 percent, down from 9 percent in
the previous quarter. Rents climbed to 39 yuan per square meter per
day in prime, ground floor locations, a trend that is expected to
continue this year as prime locations remain saturated, according
to the report.
In the residential sector, sales of luxury apartments continued
to slow, while rents continued to climb.
And the high-end rental housing market may come under pressure
later this year as new serviced apartments open. The property
market in the city and the country as a whole is booming as
investors continue to target the sector.
"The capital flow into the Chinese real estate market is still
growing and more investors will continue to look for quality assets
to acquire. We expect to see a more developed real estate
investment market this year," said Kenny Ho, head of research at
Jones Lang LaSalle (Shanghai).
China's direct real estate investment reached $9.91 billion in
2006, up 70 percent over 2005.
(China Daily April 12, 2007)