Prospect of Wuhan commercial real estate market in 2020 From Savills

RecordTrend.com is a website that focuses on future technologies, markets and user trends. We are responsible for collecting the latest research data, authority data, industry research and analysis reports. We are committed to becoming a data and report sharing platform for professionals and decision makers. We look forward to working with you to record the development trends of today’s economy, technology, industrial chain and business model.Welcome to follow, comment and bookmark us, and hope to share the future with you, and look forward to your success with our help.

The following is the Prospect of Wuhan commercial real estate market in 2020 From Savills recommended by recordtrend.com. And this article belongs to the classification: China’s economy, research report.

In March, Wuhan’s defense war entered a new stage of decisive victory. Good news from Wuhan came one after another. The shelter Hospital of Wuhan Sports Center was closed, and the preparations for the resumption of work and navigation of Wuhan Tianhe Airport began Although it is still a limited time for Wuhan to resume work and production, it is urgent to make full preparations, recognize the market situation and look forward to the market opportunity. Today, Savills released a report: “setting sail against the wind and breaking the waves — the outlook for the post epidemic situation of Wuhan commercial real estate market in 2020”, combing the road of Wuhan market recovery after the epidemic, and predicting the future of the market from the two-way attack of crisis and opportunity.

“Press pause” in Wuhan

Since Wuhan announced the closure of out of city passageways and the suspension of public transportation on January 23, all cities in Hubei Province have been closed one after another, and travel control has been continuously strengthened, and Wuhan’s economy has begun to bear great pressure.

As the national transportation hub, education hinterland and R & D base of many industries, the impact of the outbreak and development of the epidemic on Wuhan’s overall economy, property market and upstream and downstream enterprises should not be underestimated. All participants in the market will face severe challenges.

Wuhan, which is “under attack”, commercial real estate market “restart”

Office market

Before the outbreak, we had predicted that the demand for office buildings in Wuhan would pick up in the second half of 2020, which would lead to a narrowing of the rent drop. However, in the face of the sudden epidemic situation, the overall economy and all walks of life in Wuhan will suffer different degrees of impact. The demand for office buildings will decline under pressure. The annual rent drop rate in 2020 is expected to continue to decline and reach the historical peak.

– Wuhan Office Market Forecast

Facing the demand different from that in 2019, the remodeling of tenant structure will be a new challenge for owners in 2020. As for the demand sources of the post epidemic office market, we make the following interpretation:

Based on the sustained impact of economic activities in the short term, the industry demand related to personal consumption is difficult to recover in the first half of 2020, among which, the activity of retail trade, catering and hotel, transportation, tourism and study abroad will continue to be low. For the third-party office industry, after the epidemic, terminal tenants will further examine the security of such office mode. In the short term, the industry’s heat and sublease rate will be greatly affected.

In 2019, nearly 30% of the newly increased rental demand of Grade A office buildings in Wuhan comes from the traditional financial industry. In the short term, there is still a risk of decline in financial demand, but residents’ attention to life insurance and serious illness insurance will further increase, and online insurance business will become a new business growth point. The real estate construction industry will face some practical problems, such as the inability to start construction in the short term and the postponement of funds. In the medium and short term, the epidemic will accelerate the reshuffle of the real estate industry, but the industry as a whole still has long-term resilience.

Driven by the epidemic situation, the demand for online education, games, short video and other technology Internet industries is booming. After the outbreak of the epidemic, residents’ consumption expenditure on standing medicines and protective materials increased significantly. The government and society also provide a variety of mental health service channels for different groups of people. In the future, biomedicine, health, environmental protection and other fields will have good development prospects.

– policy support for small and medium-sized enterprises to stabilize office demand

In addition, looking back at 2019, among the annual newly increased rental demand of Grade A office buildings in Wuhan, the demand for small areas below 300 square meters accounts for 53%, and small and medium-sized enterprises have always been the main force of Wuhan Office market demand. The outbreak of the epidemic makes the small and medium-sized enterprises with poor anti risk ability bear the brunt and suffer a great impact. The government’s targeted support policy for SMEs will play a more important role in the future building economy.

– diversified Office and real estate technology application have become the coping strategies in the post epidemic era

In 2020, more than one-third of the global workforce will still be the millennials mainly born in the 1980s. Millennials expect more flexibility in their job search process. The epidemic has stimulated the rapid release of demand related to telecommuting and real estate technology applications. In the post epidemic era, with the deep integration of 5g, Internet of things, AI and other technologies with the real estate industry, the position of diversification formula and real estate technology in the building economy will continue to improve.

Retail property market

This epidemic situation takes strict protective measures, the closure of the city, many times to extend the time to return to work will bring great pressure on the retail market. Affected by the epidemic situation, some projects will be suspended and delivery will be delayed. It is estimated that the new supply will drop to 330000 square meters in 2020. After the end of the epidemic, it will still take a long time to recover to the previous situation, and tenants and operators are facing severe challenges.

In the long run, the epidemic has changed people’s living habits and trajectories, which will change the industrial structure. If we divide the epidemic into three time periods and analyze the industrial change through three time periods, we can see the recovery time line of all walks of life more clearly, and provide reference for the future demand side of commercial real estate.

– accelerate integration online and offline

Although the offline sales of the physical retail industry decreased sharply, the retailers actively promoted the combination of online and offline sales. During the epidemic period, the number of orders of fresh food merchants exceeding the delivery volume increased, which made the heat of some industries transfer from offline to online, such as online shopping, and the online business volume of overseas study consultation is expected to be improved. In addition, online consumption patterns, such as online medical consultation, which were not highly accepted by the market in the past, have witnessed considerable growth during the epidemic period. The epidemic situation has accelerated the coordination and close integration of online and offline resources in multiple industries.

– upgrading of community consumption circle

In recent years, China’s physical retail enterprises continue to transform and upgrade, customer-centered to improve the operation experience, and the comprehensive service ability is constantly strengthened. According to the typical statistical survey data of retail industry of the Ministry of Commerce, the sales of convenience stores and supermarkets increased by 8.3% and 4.3% year-on-year in 2018, respectively, 1.0% and 0.5% faster than that of the previous year. In this epidemic situation, with the reduction of life track, the limited offline consumption of consumers mostly occurs around the living environment, which can be called community consumption. Travel distance has become one of the important factors to consider before the consumption behavior of residents. The optimization and upgrading of commercial supporting facilities such as community shopping centers will form a more perfect retail network with city level shopping centers and regional shopping centers.

– diversified consumer groups lead retail growth

For a long time, China’s urbanization and consumption structure should change with time. High net worth consumers and the middle class are undoubtedly one of the main forces in China’s retail consumption market. However, with the collision of different consumer demands of millennials, generation Z, single economy and silver hair economy, the retail market will develop tenaciously in the medium and long term.

– beauty, tea, national tide economy

Beauty, tea and Chinese fashion goods will shine in the retail market in 2019. Among them, the domestic beauty and makeup integration live bonus rapidly swept the cosmetics market, becoming the black horse in the beauty industry in 2019, and the online dividend of some brands has also extended to offline. Net black tea drink is driven by capital, from its capital advantage, it still has expansion advantage. In addition, the cross-border cooperation between domestic cosmetics, new tea drinks and domestic IP has injected new vitality into domestic brands and opened a new era of national fashion.

Finally, for the post epidemic market, we firmly believe that the recovery of Wuhan commercial real estate is strong and powerful. It can be said that the confidence in the reconstruction period is higher than everything else! After the active and effective response to the epidemic crisis, how to make efforts to restore the economy will be the top priority. We believe that the government will further accurately support, and enterprises need to cooperate with the response to jointly explore the road of transformation and recovery.

If you want to get the full report, you can contact us by leaving us the comment. If you think the information here might be helpful to others, please actively share it. If you want others to see your attitude towards this report, please actively comment and discuss it. Please stay tuned to us, we will keep updating as much as possible to record future development trends.