Money
Commerical property sector set to expand
By Hu Yuanyuan (China Daily)
Updated: 2010-10-21 10:35
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A newly built mall by developerCapitaRetailChina Trust in Tianjin, China.[Photo/Agencies]? |
BEIJING - China's commercial property sector is expected to maintain rapid expansion, with rental prices continuing their upward momentum in the fourth quarter, according to leading real estate service providers.
Surging economic growth and strengthening consumer confidence saw demand for retail space remaining strong in the third quarter, according to Jones Lang Lasalle (JLL), a United States-headquartered real estate service provider.
Many international brands have quickened their entry into the Beijing market. China World Mall (Phase III) has attracted more than 80 top international brands, with many of them opening outlets in Beijing for the first time. Higher-end supermarkets are also actively pursuing expansion and targeting a broader consumer base.
"Demand for retail space will continue to grow steadily in the fourth quarter, with rental prices remaining stable and vacancy rates set to decrease only slightly," said Qin Xiaomei, chief researcher of JLL Beijing.
Statistics from Savills, the property services firm, show that during the first eight months of 2010, retail sales in Beijing rose 16.2 percent year-on-year to 393.8 billion yuan ($59.19 billion). Meanwhile, retailers who had originally focused on downtown retail areas have begun exploring opportunities in the city's suburbs.
According to JLL, rental prices increased by 4.2 percent quarter-on-quarter from July to September to 597 yuan per square meter a month, while the market average vacancy rate dropped by 2.5 percent to 12.3 percent.
The Hurun Research Institute's China Property Rich List reported on Tuesday that the 50 richest Chinese property developers have made 11.6 billion yuan on average this year.
Wang Jianlin, 56, chairman of the Wanda Group, came in as the property King of Kings with a personal fortune of 28 billion yuan.
Van's Department Store, a retail section under Wanda Group, has become the second largest business driver for the group. The company will quicken its expansion from the existing 13 stores to 65 by 2012.
Danny Ma, senior director of CBRE Research China, said international real estate funds are much more active this year, with a number of them interested in the commercial sector.
For DTZ's Cao, insurance capital is another major source in the commercial property sector. Following an announcement by the insurance regulator, which revealed detailed rules on investment in the property sector, around 450 billion yuan of insurance capital could be invested in the commercial sector in the future.
Currently, China's overall property investment market stands at around 40 billion yuan each year.