BIZCHINA> Insights
China's commercial real estate woes
(chinadaily.com.cn)
Updated: 2009-10-09 16:39

China's commercial real estate woes

China's rapid economic expansion over the past decade turned the country into the place to be for multinational companies. To accommodate the influx of international businesses, developers took out loans, land was cleared and construction sites and cranes dotted the skyline of every major city.

It wasn't only the supply of high-end office buildings in prime business locations (Class A) and lower-end office buildings (Class B) that boomed. More and more shopping malls -- a relatively new concept in the country -- sprung up, replacing department stores in cities.

But when the financial crisis hit, many multinationals pulled their offices and employees out of China or moved to less expensive spaces, while the hordes of shoppers that retailers were expecting to flood the malls tightened their purse strings. Now, major cities throughout the country are home to empty skyscrapers and shopping malls that are virtually empty, apart from store clerks and security guards. Meanwhile, construction continues. How did this scenario evolve, and what are the commercial real estate industry's prospects?

Beijing and beyond

How much space is vacant is a matter of debate. Shirley Hu of real estate broker CB Richard Ellis predicts that by 2010, the supply of commercial office space will increase in Beijing by roughly 1.5 million sq m (16 million square feet) and in Shanghai by 1.9 million sq m (20 million square feet), driving up vacancy rates to approximately 30 percent.

But vacancy rates in commercial real estate may be as high as 50 percent, says Jack Rodman, President of Global Distressed Solutions LLC based in Beijing, and Senior Advisor at Crosswater Realty Advisors, a Los Angeles-based real estate advisor firm serving institutional investors. According to Rodman, "if a building can be brought to market in six months, then it's better to include it in the supply."

The supply of Class A commercial office buildings in Beijing over the past two years increased an estimated 5.6 million sq m (60 million square feet), Rodman points out. The supply of Class B or buildings that will be sold to investors could add another 3.7 million sq m (40 million square feet), he says, noting this excludes government buildings, such as the new CCTV tower in Beijing, and buildings being built by financial services and oil companies for their own use.

Related readings:
China's commercial real estate woes Asians on big city real estate buy spree
China's commercial real estate woes Commercial real estate could be next economic threat
China's commercial real estate woes Reality of the real estate market is really bitter

The amount of space wasn't as worrisome during the boom years, between 2003 and 2007, when demand drove up the average annual absorption rate to roughly 465,000 sq m a year. China was hot, and everyone wanted in -- from international investment banks and law firms to accounting firms and real estate brokerages. "But for the last two years, you haven't had any of that," says Rodman. "I don't think there's been much net absorption at all. I believe there's a very large and very real problem here."

And it isn't limited to Beijing, he adds. "Shanghai's office market is as bad as this."

Other cities are also struggling with high vacancy rates in commercial real estate that mirror those in the capital and financial center. "Hangzhou definitely has an oversupply of commercial property," says Wu Weiming, CEO of a commercial property developer in that city.

It's not just commercial office space that is sitting empty. In Beijing, the shiny new shopping malls have occupancy rates of roughly 60 percent, compared with between 70 percent and 80 percent in previous years, says Wendy Zha, retail real estate sales representative at CB Richard Ellis in the capital. The overall retail market vacancy rate is between 30 percent and 40 percent, she notes.

The oversupply of retail space is most pronounced in Beijing, where developers rushed to complete large shopping complexes before last year's Olympic Games, says James Macdonald, senior manager and head of China research at Savills China, a branch of the London Stock Exchange-listed real estate service provider. "But supply (in Shanghai) may increase over the next six months in preparation for the next year's World Expo." In the meantime, Shanghai's retail market is still relatively healthy with a city-wide vacancy rate of prime retail space of 3.3 percent, he says.


(For more biz stories, please visit Industries)

   Previous page 1 2 3 Next Page  

主站蜘蛛池模板: 精品久久久无码人妻中文字幕 | 日韩精品一区二区三区在线观看 | 伊伊人成亚洲综合人网7777| 麻豆md传媒md00中国| 在线看免费毛片| 中文字幕日韩一区二区三区不 | 邱淑芬一家交换| 国产精彩对白综合视频| 东北少妇不戴套对白第一次| 榴莲视频app色版| 亚洲韩国在线一卡二卡| 色噜噜一区二区三区| 国产精品久久久久久久| japanese日本熟妇多毛| 无码精品日韩中文字幕| 亚洲制服丝袜第一页| 狠狠做深爱婷婷综合一区| 国产v在线播放| 黑人巨大人精品欧美三区| 国产高清一区二区三区视频| 中国毛片在线观看| 日韩一区二区三区精品| 亚洲国产日韩精品| 狠狠色综合色区| 哦好大好涨拨出来bl| 麻豆天美精东果冻星空| 国产精品无码日韩欧| chinese麻豆自制国产| 成人欧美一区二区三区1314| 久久精品久噜噜噜久久| 欧美婷婷六月丁香综合色| 人人看人人添人人谢| 精品国精品自拍自在线| 国产一区二区三区不卡免费观看 | 狠狠色狠狠色综合日日不卡| 国产AV一区二区精品凹凸| 国产在线视频你懂的| 国产精品爽黄69天堂a| 99精品国产在热久久| 小天使抬起臀嗯啊h高| 中文字幕无码无码专区|