How will recent improvements in market transparency and the tech boom shape China’s real estate markets?
Shanghai and Beijing are the biggest commercial real estate markets in China, and among the largest globally.
Shanghai reached US$7.3 billion in foreign-direct property investment last year, the fourth-largest in the world, according to JLL. Beijing saw US$4 billion of inflows into real estate.
Their rise is in part tied to a decades-long path to greater transparency.
In this podcast, our host, Art Patnaude, has a dialogue with JLL’s Stuart Crow, CEO Capital Markets, Asia Pacific speaking to us from his home office in Singapore and Jim Yip, Head of Capital Markets, China, joining us from Shanghai, to discuss the implications for Asia Pacific real estate investors.
The topic at hand –the performance of China’s real estate markets
“China will probably be the largest real estate market in the world in the next 6 to 8 years. So transaction volumes are always going to be high and investors are attracted to the many aspects of China’s growth. The transparency of information around deals, around rents and indeed opportunities has improved. And with that investors have become a little bit more educated and very much focused on the broader demographic, urbanization and consumer trends” explains Stuart Crow. “China's homegrown technology giants themselves are becoming very, very large players globally and are very having a very big impact on the their homegrown office markets”
“The fundamental growth story of China is still very much intact. We have a very strong retail sales, GDP was depressed in first half year but is expected to rebound” says Jim Yip. Logistics, data centers and alternative asset classes such as cold storage and co-living are expected to attract increasing volumes of capital.
Whilst acknowledging that there are risks ahead and the need for continued improvements in transparency, Jim concludes with a positive outlook “I'm pretty confident about the market in the aftermath of this pandemic. The market will see a significant pick up towards the end of this year.”