Review and Prospect of Guangzhou real estate market in the first half of 2022 From CBRE
The following is the Review and Prospect of Guangzhou real estate market in the first half of 2022 From CBRE recommended by recordtrend.com. And this article belongs to the classification: Chinese economy.
In the first half of 2022, a total of 300000 square meters of new supply was delivered in Guangzhou, with a year-on-year decrease of 11%. Affected by the epidemic and industrial regulatory policies, the expansion of the Internet industry, especially the game industry, has slowed down, and the demand of the real estate industry is also gradually shrinking. The leasing activities of office buildings are mostly the integration and relocation of enterprises, and many tenants remain on the sidelines of the market. The average occupancy rate of new buildings at the time of delivery is less than 30%, which is lower than the average value of 41% in 2021. In the first half of the year, the net absorption was 74000 square meters, a year-on-year decrease of 76%. The fall in absorption pushed up the vacancy level of the city, reporting 14.0% at the end of the quarter, and the vacancy rate increased by 2.1 percentage points in the first half of the year.
The demand power is limited, and the rent level fluctuates downward. In the first half of the year, the city’s average rent surface price decreased by 1.0% to 157.7 yuan per square meter per month, a year-on-year decrease of 1.7%. Among them, the rent of Grade A office market fell by 0.8% in the first half of the year, which is more stable than that of grade B market, which fell by 1.4%. In addition to the rent concessions, many owners provide decoration subsidies or customized decoration services for tenants.
In terms of industry performance, the financial industry, TMT, consumer goods manufacturing industry and professional services industry have the most active demand. Driven by the futures exchange, non bank finance in the financial industry, such as funds and securities, are actively deployed in Guangzhou; The performance of law firms in the professional service industry is also outstanding. From a subregional perspective, Zhujiang New Town welcomes a number of financial and professional service tenants with good leasing capacity; Pazhou has recorded many large-scale leasing transactions due to its abundant rentable area and competitive price. The tenant industry includes the main demand forces such as finance, TMT and consumer goods manufacturing.
“In the next six months, 370000 square meters of supply is expected to enter the market in the city. The annual supply is 670000 square meters, a year-on-year decrease of 28%, and the pressure from the supply side is slightly relieved. At the same time, several regions have introduced measures to promote industrial development, such as Haizhu District’s proposal to provide incentives and subsidies to the game industry. Coupled with the upcoming convening of the 20th National Congress, it is believed that the national economic stabilization policy will be further implemented, which will help further boost market confidence. It is expected that in the second half of the year, the lease activity will increase and the absorption is expected to improve.
Looking forward to the next three years, Pazhou, financial city, Yuzhu and other new areas will usher in the completion of new projects one after another, and the market rental area will increase. It is expected that the space for rent negotiation will be increased, and the lease terms will become more flexible, which will be a good time for enterprises to expand and relocate. At that time, the pent up demand affected by the epidemic is also expected to be released. “
In early April, the epidemic occurred repeatedly in Guangzhou, interfering with the upward trend of the retail market in the first quarter. New rents slowed down and the vacant area increased. However, under the rapid and effective control of the epidemic by the Guangzhou government, most shopping malls and shopping centers outside the control area were open as usual, except for a few stores or shopping malls that were temporarily closed. The epidemic has lagged behind for some time. The government has introduced a series of assistance and relief measures for small and micro enterprises, and issued several rounds of consumer vouchers, which has led to the improvement of consumption data in May.
In the first half of the year, a shopping center opened in Guangzhou. The mall is located in Huangpu District, with a commercial area of more than 30000 square meters. Despite the small supply in Guangzhou in the first half of the year and the ideal opening rate of new shopping malls, the vacancy rate still increased by 0.5 percentage points over the end of 2021 to 9.0% at the end of the second quarter. Part of the reason for the high vacancy rate is the fluctuation of the epidemic. On the other hand, the adjustment of the main tenants in the shopping malls during the adjustment and reform process is also a factor causing the increase of the vacancy area in a short time. With the increase of vacancy pressure, the rent of the first floor in the city decreased by 0.5% compared with the end of last year to 27.7 yuan per square meter per day at the end of the second quarter.
From the perspective of transaction, the new catering leasing in the first half of 2022 performed prominently, accounting for 42.2% of all new leasing transactions, which can almost compete with the retail format (42.9%). This phenomenon is mainly attributed to the tenant adjustment strategy of some owners to change large catering stores into several small catering stores, resulting in an increase in the number of newly rented catering stores. In addition, light food and soft drinks (accounting for 19.6%) are also favored by some owners because of their relatively strong rental capacity and the decoration style that caters to young consumers. Among them, coffee and tea brands m stand and Jpg is more active, and the counseling hot pot incubated at jiumaojiu has also begun to go out of Tianhe District and expand to other business districts. In terms of retail formats, domestic and foreign brands that first entered Guangzhou still favor Tianhe Road, including Balenciaga, Thom Browne, Breitling and harmay plum. Zhujiang New Town welcomes the settlement of international cosmetics brands outside Tianhe Road. Finally, in terms of experience industry, discipline education industry shrank, while the exhibition hall of new energy vehicles continued to expand rapidly, including the opening of the first stores of hengchi and salon cars, as well as the opening of new stores or hoardings of Volvo, Cadillac and smart.
In the next six months, Guangzhou will have four projects, about 310000 square meters of new high-quality commercial properties on the market, including Joy City and Yitian’s first light asset projects in Guangzhou.
“With the eastward shift of the focus of urban development, the business development opportunities of Guangzhou’s second CBD, including the financial city and Yuzhu District, have increased significantly. The successive opening of IKEA and Sam’s club has also enhanced the attraction of the district to retailers. In addition, the predictable high-end community atmosphere in the Financial City District is also conducive to attracting groups with high consumption power and the subsequent high-end business demand. In the medium and short term, the main supply of the second CBD will be It is concentrated in the starting area of the Financial City, including Junchao square, transportation hub shopping malls, the underground space of the financial city and the Tiande mini project near the Pearl River. According to the plan, the super high-rise buildings on Fucui island will also have a considerable commercial area. In fact, there is no shortage of shopping malls in Guangzhou, including commercial projects with relatively concentrated layout such as the starting area of the financial city. If they can be operated properly, they are expected to become a highly anticipated business district in the east of Guangzhou in the future. “
In the first half of 2022, Guangzhou recorded 39 industrial land transfers totaling 1.17 million square meters, with a year-on-year decrease of 44% in transaction area. Among them, Huangpu, Zengcheng and Nansha recorded the most industrial land transfer. In addition, in the first half of the year, there were six transferred industrial plots with a service life of less than 50 years, accounting for 15.4%.
In terms of logistics market, a new non bonded project was added in the north of Huangpu District in the first half of the year, bringing a total of 40000 square meters of high-standard storage area to the market. Focusing on the absorption performance, affected by the impact of the epidemic on retail sales, the total retail sales of social consumer goods in Guangzhou fell by 0.3% year-on-year from January to may, curbing the expansion of retailers and slowing down new rents. In addition, in the first half of the year, several large-area tenants caused the vacancy rate in the core area of Guangzhou warehousing to rise due to the expiration of leases and other reasons, pushing the vacancy level of the city to 8.8%, an increase of 4.8 percentage points over the end of 2021. In terms of industry, manufacturing, cross-border e-commerce and third-party logistics recorded transactions in Guangzhou and surrounding cities. For example, a cross-border e-commerce company will customize and lease a large storage Park in Qingyuan, located in the north of Guangzhou.
The rent rise caused by the strong absorption performance in 2021 continued until 2022, and the city recorded an increase of 4.5% in the first half of the year to 40.1 yuan per square meter per month at the end of the second quarter. However, in terms of regions, the rent performance is still differentiated: the rent of non bonded properties near the urban area is stronger; In the bonded sector with large supply in the north, the lease conditions have been loosened.
In the next six months, about 980000 square meters of new high-standard logistics warehouses will be put into use in Guangzhou, of which 53% are located in Nansha, mainly non bonded warehouses, and the rest are located in Baiyun and Huadu in the north of Guangzhou, of which 270000 square meters are bonded areas. It is expected that the rapid increase in supply will drive the vacancy rate further upward.
“With the new supply entering the market and the rise of vacancy rate, on the one hand, tenants’ expectations of rent have changed, and the trend of rapid rent rise is expected to be restrained in the second half of the year; on the other hand, the release of rentable storage area in the core area brings opportunities for tenants to enter the region, expand the lease and adjust the lease location. With the gradual elimination of the impact of the epidemic on the supply chain in the first half of the year, manufacturing industries represented by automobiles, electronics and medicine are widely spread The recovery trend of Guangzhou is obvious, online consumption is picking up, and the growth of modern logistics services is relatively ideal. It is expected that the storage demand will continue to grow in the second half of the year, which will bring strong support to the high-standard storage and logistics market in Guangzhou. “
Guangzhou recorded a total of 12 bulk investment transactions in the first half of 2022, with a total transaction amount of about 8.6 billion yuan, which has reached 71% of the total transaction volume in 2021. Among them, 85% of the transaction amount comes from six office building transactions, which are distributed in major business areas such as Pazhou, Zhujiang New City, financial city, Tianhe smart city and Cisco smart city. Among them, the business parks traded in Tianhe smart city in the second quarter were sold with cash flow. In addition, Haiyin group announced the sale of Panyu President Hotel and commercial podium in the first half of the year, with a total amount of about 420million yuan. In addition, an asset package transaction was recorded, including a hotel in Tianhe and a shop on Beijing road. Finally, in the first half of the year, four transactions of shops and podium businesses were recorded, three of which were non core properties disposed by developers. From the perspective of the composition of buyers, 42% of the buyers accounting for the number of transactions come from commercial institutions such as companies, developers, real estate funds and institutional investors, and 33% are local individual investors. Looking back at the transaction records in 2021, the proportion of individual investors and buyers was not high at that time, which shows that the investment activities of individual investors in Guangzhou tend to be active.
In the first half of 2022, the bulk property investment market continued the trend of 2021. Institutional investors’ investment demand for industrial real estate is still strong, and they are actively looking for sellable logistics assets in Dawan district. In addition, an alternative asset transaction was also recorded in the first half of the year, which was Keppel’s acquisition of two data centers in Jiangmen. At the same time, properties that can be listed as the basic assets of public REITs are also sought after by investors, such as traditional business park properties such as science city and Tianhe smart city, which are increasingly attracting market attention. However, the epidemic in Shanghai since April has delayed the decision-making progress of investors from the Yangtze River Delta to a certain extent, and suppressed the demand of institutional investors to a certain extent.
“As one of the four first tier cities in China and the core city of Dawan District, Guangzhou has a developed service industry and a solid foundation of office demand. Although Guangzhou is currently facing a supply peak and the traditional business district is facing upward pressure of vacancy in a short time, in the long run, the Office buildings in the business district of Guangzhou will still be the domestic high-quality core investment targets.”
Read more: Jones Lang LaSalle: 2017 Q3 Guangzhou real estate market review (with download) CBRE: 2020 Greater China real estate market outlook report (with download) CBRE: review and outlook of Beijing real estate market in the first half of 2022 CBRE: review and outlook of Shanghai real estate market in 2018 CBRE: review and outlook of Beijing real estate market in the third quarter of 2020 CBRE: review and outlook of Shenzhen real estate market in the third quarter of 2021 CBRE: review and outlook of Shenzhen real estate market in 2021 and outlook for 2022 (download attached) CBRE: evolving class A office market in Beijing (download attached) CBRE: Guangdong Hong Kong Macao Great Bay Area Research Report (with download) CBRE: China’s willingness to invest in commercial real estate hit a new high CBRE: Shenzhen real estate market review and outlook in the first quarter of 2022 CBRE: Guangzhou real estate market review and outlook in the first quarter of 2022 CBRE: Beijing real estate market review and outlook in the first quarter of 2019 Guangdong Hong Kong Macao Great Bay Area: the future world’s first bay of China’s pioneer urban agglomeration (with download) CBRE: review and Prospect of Wuhan real estate market in the first quarter of 2020
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