While major property sectors in Shanghai, Beijing and Guangzhou
continued to grow steadily during the third quarter, real estate
markets in other major cities across the country also proved to be
sound as investors and developers remained optimistic about
opportunities in those emerging cities, a recent industry analysis
conducted by CB Richard Ellis has concluded.
Shenzhen
The prime office market remained buoyant during the third
quarter of 2007. The average price of quality office space rose 9.8
percent to 17,817 yuan (US$2,375) per square meter from a quarter
earlier as occupiers continued to absorb office space.
Rentals rose two percent quarter on quarter in the Grade A
office market and jumped 4.9 percent in Grade B buildings. About
213,835 square meters of office space was completed during the
three months, including two Grade A premises: CapitaRetail SZITIC
Plaza and The Landmark. The overall vacancy rate fell from 15.9
percent in June to 13.6 percent in September.
The retail market was relatively stable in the period, except
for a significant rental surge in premium top-grade shopping
centers in Luohu District. The average monthly rent for ground
floor space of shopping malls dipped 0.8 percent to 23.8 yuan per
square meter per day while first floor rents rose 2.3 percent to
12.8 yuan per square meter per day. In September, the
45,180-square-meter second phase of CapitaRetail SZITIC Plaza was
completed in Xiangmihu area, which is fast emerging as a new retail
hub in Shenzhen. The overall vacancy rate climbed to 8.2 percent by
the end of the quarter.
Dalian
Demand was stable in the prime office market during the third
quarter with average rents increasing moderately and vacancy levels
continuing to drop. Overall rents rose one percent from three
months earlier to 63.6 yuan per square meter per month while the
average vacancy rate dipped to 20.1 percent in September from 20.6
percent in June. Leasing activities were relatively muted and most
transactions were concentrated in the Grade B office market.
No new completions were registered in Dalian's retail market
during the quarter and the vacancy rate was down 0.5 percentage
points to 2.2 percent at the end of September. Ground-floor rents
edged up 1.1 percent to 25.4 yuan per square meter per day while
first-floor rents increased by a moderate 0.2 percent to 16.9 yuan
per square meter per day.
Tianjin
The prime office leasing market in Tianjin proved to be stable
in the July-September period, with the average rent rising 0.2
percent to 98.7 yuan per square meter per month. As no new supply
came on the market, the vacancy rate fell 1.4 percentage points to
17.7 percent at the end of the quarter. In the strata-title sales
market, there were very few properties for sale and prices
increased one percent to 12,500 yuan per square meter.
With major properties under renovation, the prime retail
property vacancy rate rose to 14.4 percent. However, daily
ground-floor and first-floor rents increased 0.4 percent and 1.8
percent to 16.7 yuan per square meter and 9.8 yuan per square
meter, respectively.
Hangzhou
With no new prime office space opening in Hangzhou, average
office rents increased at an accelerated pace in the third quarter
- rising 1.6 percent to 107.3 yuan per square meter per month. And
the overall vacancy rate dropped 0.9 percentage points to 10.6
percent. Meanwhile, prime office strata-title sales prices enjoyed
continuous growth, with the average price jumping 6.2 percent to
15,788 yuan per square meter.
More office buildings in Qianjiang New City are due to hit the
market in the first half of 2008. In the office sales market, the
Bank of Communications acquired the 43,229-square-meter Bluewhale
International Building at about 15,000 yuan per square meter.
Strong demand and lack of new supply in the prime retail market
kept vacancy levels low at 2.7 percent. During the period, rentals
for ground-floor and first-floor space recorded quarter-on-quarter
growth of 4.2 percent and 3.7 percent, respectively, to be secured
at 19.8 yuan per square meter and 16.1 yuan per square meter per
day.
Chengdu
Prime office rents in Chengdu rose 0.6 percent to 89.9 yuan per
square meter per month. The average rental of Grade A office space
increased two percent from a quarter earlier as some Grade A office
buildings with high occupancy rates such as Huiri-Yangkuo Plaza and
Times Plaza raised asking rents due to decreased available leasing
space.
Moreover, the delayed release of some office buildings also led
to a shortage of new supply. Vacancy rates for prime offices
dropped 3.9 percentage points to 28.4 percent during the third
quarter.
At the same time, Chengdu's prime retail market witnessed an
increase in rents. The vacancy rate rose to 6.4 percent from six
percent in the last quarter due to an increase in vacant areas in
prime department stores in Luomashi District.
Xiamen
No new openings in the prime office market was recorded in
Xiamen in the past quarter. The average price of prime office
premises rose slightly, while rents remained almost unchanged
during the period. Future supply in the coastal city will be
concentrated in the Guanyinshan and Wuyuanwan business zones. Six
office buildings in Guanyinshan have been completed and will be put
into operation early next year. Ruijing Commercial Plaza, the first
large-scale shopping center in east Xiamen, was completed in the
past quarter.
The overall vacancy rate of the city's prime retail properties
increased 2.4 percentage points to 25.5 percent at the end of the
quarter.
(Shanghai Daily November 6, 2007)
