Business Monitor International


China Real Estate Report

Published 11 August 2014

  • 69 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
 
$1,295.00
China Real Estate Report

BMI View:   Alt hough China's commercial real estate market remains an outperformer on a global level, we caution that the slowdown in economic growth, coupled with a residential property bubble threatens to derail the sector over the coming quarters. Growing concerns surrounding a residential property bubble and the government's efforts to prevent this , are seeing a flight of capital among investors to the US and other overseas markets.

The China real estate report examines the commercial office, retail, industrial and construction sectors in the country from the perspective that the market, which has experienced exponential growth over recent years, is starting to succumb to the impending conflagration of market weakness. 

In Q414, the growing likelihood of a bubble in the residential property market is starting to see caution spill over into the commercial sector as the government begins to ramp up cooling measures aimed at tapering off the supply of credit to the property market as a whole. The measures are seeing many, in particular smaller, developers struggling to find liquidity, a situation which has already led to a growing spate of insolvencies during 2014. Meanwhile, larger firms are starting to reduce their exposure to the market. In a reversal of trend witnessed at the start of the decade, growing concern among China's real estate investment community, coupled with narrowing returns on domestic property has seen local investors increasingly switch their attention to overseas markets including the US and Western Europe. According to data provided by Colliers International, the value of outward real estate investment from China grew exponentially during the five years to 2013, increasing from USD69mn in 2008 to USD16bn in 2013.

While the outlook for the Chinese commercial real estate sector appears increasingly clouded, we note a number of positive trends taking place across the industry. In particular, the expansion of China's trade links...

Table of Contents

BMI Industry View
7
SWOT
9
Political
11
Economic
12
Business Environment
13
Industry Forecast
14
Office
15
Table: Forecast Rents - (USD/sq m/month)
16
Table: Forecast Net Yield, 2010-2018 (%)
16
Retail
16
Table: Forecast Rents - (USD/sq m/month)
17
Table: Forecast Net Yield, 2010-2018 (%)
17
Industrial
18
Table: Forecast Rents - (USD/sq m/month)
18
Table: Forecast Net Yield, 2010-2018 (%)
18
Construction And Infrastructure Forecast Scenario
19
Table: Construction And Infrastructure Industry Data (China 2012-2017)
19
Table: Construction And Infrastructure Industry Data (China 2018-2023)
21
Macroeconomic Forecasts
32
Economic Analysis
32
More Cities To Witness Price Declines
33
Government, PBoC Likely To Tweak Policies
34
Economic Reforms Another Headwind
35
Table: Economic Activity (China 2009-2018)
37
Industry Risk Reward Ratings
38
Asia - Risk/Reward Ratings
38
Table: Asia Real Estate Risk/Reward Ratings
38
China - Risk/Reward Ratings
39
Market Overview
41
Shanghai
43
Beijing
44
Wuhan
44
Shenzhen
45
Office
45
Table: Net Yield, 2012-2014
46
Table: Terms Of Rental Contract/Leases - H213
47
Retail
47
Table: Historic Rents - 2012-2014 (USD/sq m/month)
49
Table: Net Yield, 2012-2014 (%)
49
Table: Terms Of Rental Contract/Leases - H213
50
Industrial
50
Table: Historic Rents - 2012-2014 (USD/sq m/month)
51
Table: Net Yield, 2012-2014 (%)
51
Table: Terms Of Rental Contract/Leases - H213
52
Competitive Landscape
53
Company Profile
56
China Merchants Group/China Merchants Property Development
56
Gemdale Corporation
58
Poly Real Estate Group
61
Shanghai Industrial Development
63
Demographic Forecast
65
Table: China's Population By Age Group, 1990-2020 ('000)
66
Table: China's Population By Age Group, 1990-2020 (% of total)
67
Table: China's Key Population Ratios, 1990-2020
68
Table: China's Rural And Urban Population, 1990-2020
68
Methodology
69
Industry Forecast Methodology
69
Sources
70
Risk/Reward Ratings Methodology
70
Table: Real Estate Risk/Reward Ratings Indicators
72
Table: Weighting Of Indicators
73

The China Real Estate Report features Business Monitor International (BMI)'s market assessment and independent forecasts of major construction projects in the residential and commercial markets, plus rental prices and yields in major cities. The report critically analyses the prospects for real estate within the broader economic and financial context - both domestic and global - via our econometrically-modelled and clearly explained banking and economic forecasts and follows this through to evaluate the implications for REITs.

BMI's China Real Estate Report provides industry professionals and strategists, sector analysts, business investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the real estate industry in China.

Key Benefits

  • Benchmark BMI's independent real estate industry forecasts for China to test other views - a key input for successful budgeting and strategic business planning in the Chinese real estate market.
  • Target business opportunities and risks in China through our reviews of latest industry trends, regulatory changes and major deals, projects and investments.
  • Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).

Coverage

BMI Industry View

Summary of BMI's key industry forecasts, views and trend analysis covering real estate and construction, regulatory changes, major investments and projects and significant national and multinational company developments.

Industry SWOT Analysis

Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the real estate sector and within the broader political, financial, economic and business environment.

Market Overview

Overview of the real estate sector, including analysis of existing/planned real estate developments and emerging industry trends in the office, industrial and commercial sectors.

Market Analysis

Features detailed city-level data and analysis on rental prices, yields, contract terms and real estate availability with separate chapters covering the office, retail and industrial sub-sectors.

Industry Forecast Scenario

Historical data series (2010-2012) and forecasts to end-2018 for the domestic real estate industry and for the local and global finance industry. Indicators include:

Real Estate: Office, retail and industrial real estate yields for all major cities (%); short-term forecasts on minimum and maximum real estate rental prices by sub-sector (US$ per square metre, and local currency per square metre)

Construction: Industry value (US$bn); contribution to GDP (%); employment (`000); real growth (%)

Economy: Economic growth (%); nominal GDP (US$bn); unemployment (%); interest rates (%); exchange rate (against US$)

Business Environment Rankings

BMI's Real Estate Business Environment Rankings provide a country-comparative Risk-Reward Rankings index aimed at investors (real estate vendors, construction companies and financial investors) in the regional real estate market.

The rankings methodology makes sophisticated use of over 40 industry, economic and demographic data points.

Company Profiles

Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI's industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate Company SWOT analyses.

The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

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Testimonials

'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’

Senior Research Analyst, ABC International Bank plc