Retail properties remain attractive in Beijing

Retail property assets in Beijing are becoming more attractive for investors due to rebounding consumption, with domestic insurance funds and foreign capital being major players, industry experts said.

According to CBRE, an international commercial real estate service company, seven en-block transactions were reached in Beijing's property investment market in the second quarter of 2021, with total transactions valued at 20.94 billion yuan ($3.2 billion), roughly the same as the previous month. Among them, there are three super-large transactions valued at more than 4 billion yuan.

Large-scale domestic insurance funds are the most active buyers in the second quarter, with financing costs as an advantage. For instance, Hexie Health Insurance completed the largest single transaction in this quarter. Foreign capital is another active buyer type, such as Brookfield's purchase of asset packages including Beijing Mosaic Mall. The rich experience of overseas investors in transactions and their influence in Beijing's property market have played a big role in promoting the transaction.

Statistics from CBRE showed office properties remain the main component of investment transactions, accounting for 54 percent of total transaction volume. The buyers have confidence in the long-term growth of overall office assets. The liquidity of retail property assets was further unleashed, accounting for 19 percent of transactions. It will gradually attract more investment thanks to the normalization of domestic retail activities and the release of domestic consumption potential after the epidemic, industry experts said.

"In the future, with the diversification and flexibility of market capital operation and transaction structures, the overall liquidity and investment volume of Beijing property market are expected to further improve," said Ji Gang, head of investment and capital markets at CBRE North China.

Vincent Li, associate director of Savills North China, said with the adjustment of China's epidemic prevention policies and the improvement of the environment, more foreign capital will enter the Chinese market and promote real estate investment.

Wang Hao contributed to this story.