Briefing Sales and investment August 2015

Transcription

1 Savills World Research Beijing Briefing Sales and investment August 21 SUMMARY Image: Wangjing area, Chaoyang district The en-bloc sales market was relatively quiet in the second quarter of 21, with only two deals concluded for a total consideration of less than RMB1 billion. Grade A office capital values continued to rise to an average of RMB69,3 per sq m in /21, up 2.7% quarter-on-quarter (QoQ) and 8.4% year-on-year (YoY). Grade A office gross reversionary yields compressed 3. basis points (bps) to.2% by the end of /21, echoing the decline in Grade A office rents which were down.3% QoQ to RMB319.1 per sq m per month. Both first-hand, strata-title office and retail markets witnessed a slowdown in transaction volumes in 1H/21, with total consideration decreasing 47% half-on-half (HoH) and 1% HoH to RMB12.9 billion and RMB7 billion, respectively. The en-bloc sales market saw the conclusion of two deals for a total consideration of RMB97 million in the second quarter of 21. As a result, the five deals concluded in 1H/21 have brought year-to-date (YTD) total transaction consideration to RMB7.7 billion. Despite overall land transactions falling 44.% YoY to RMB2.1 billion in the second quarter, residential land plots witnessed growing interest from developers in response to rebounding transaction volumes in the residential sales market. Both the office and retail strata-title sales markets slowed in 1H/21, largely as a result of the rebounding residential market. Jack Xiong, Savills Research savills.com.cn/research 1

2 Briefing Beijing sales and investment August 21 Market commentary Beijing s en-bloc sales market remained relatively calm in the second quarter, with only two deals concluded: Crosspoint Shopping Center ( 星 街 坊 购 物 中 心 ) was jointly acquired by Gohigh and Ping an Trust, and Wangxin Plaza ( 网 新 大 厦 ) was acquired by Cindare. The two deals saw a total consideration of RMB97 million, bringing YTD total transaction consideration to just RMB7.7 billion, only 46% of last year s total. GRAPH 1 First-hand, strata-title office sales, /26-/ Despite overall land transactions falling 44.% YoY to RMB2.1 billion in the second quarter of 21, GRAPH 2 First-hand, strata-title office supply and transaction by area, 28-1H/21 ' sq m 2, 2, 1, 1, Traditional GRAPH 3 Grade A capital values and yields, /27-/21 figure3 en RMB per sq m 8, 7, 6,, 4, 3, 2, 1, YTD Capital value (LHS) Page 1 Emerging Gross yield (RHS) 16% 14% 12% 1% 8% 6% 4% 2% % residential land plots saw growing interest from developers in reaction to rebounding transaction volumes in the residential sales market. Office sector All grades Beijing s first-hand, strata-title office sales total consideration fell 47% HoH to RMB12.9 billion, only 29% of the total witnessed in 214. The majority of quality office projects in the market are located in traditional business areas, where landlords continue to show a reluctance to sell. As a result, over 7% of transactions in the period were concluded in nonprime and even suburban locations. Chaoyang district remained the most expensive strata-titled sales market, with one project, Central Park Plaza ( 中 央 公 园 广 场 ), recording an average price of more than RMB1, per sq m. The most active location in the market remained the Wangjing area, with average first-hand transaction prices achieving RMB, per sq m during the period. Leading projects Poly International Plaza Tower 2 ( 保 利 国 际 广 场 塔 2) and Focus Times Square ( 方 恒 时 代 中 心 ) saw average prices ranging from RMB, RMB6, per sq m. Grade A office market Grade A office capital values continued to rise in the second quarter to an average of RMB69,3 per sq m, up 2.7% QoQ and 8.4% YoY. This was largely supported by limited prime investable stock, combined with steady demand from both domestic and overseas investors. However, as Grade A office rents decreased.3% this quarter to RMB319.1 per sq m, Grade A office gross reversionary yields further narrowed by 3. bps to.2%. Retail sector First-hand strata-title retail transaction volumes fell 1% HoH to RMB7 billion by the end of 1H/21. This significant decline in performance was largely attributed to the rebounding performance of the residential market, which led to a number of investors choosing to switch focus. En-bloc investment market Despite the lack of prime investment stock, investors are expected to continue eagerly seeking opportunities in the market. While several projects are currently under negotiation, higher than expected

3 Briefing Beijing sales and investment August 21 prices may delay the process of transactions. GRAPH 4 First-hand, strata-title retail sales, /26 /21 Two deals were concluded in the second quarter of 21 for a total consideration of RMB97 million, bringing YTD total consideration to RMB7.7 billion, only 46% of last year s total. En-bloc transactions this quarter included: A joint agreement by Gohigh and Ping an Trust, both domestic investors, acquired the Crosspoint Shopping Centre for RMB million. - Cindare, a domestic real estate company, purchased the office building Wangxin Plaza, located in ZGC, from the Insigma Group for RMB47 million TABLE 2 Major strata-title retail projects in 1H/21 Project Poly International Plaza Ocean Crown Office projects located in core areas are still considered the most favoured properties by investors. However, there has been a growing trend of interest in retail properties in the past months, particularly from investors looking to undertake both renovation and repositioning strategies. This was reflected in retail transactions accounting for nearly TABLE 1 Major first-hand, strata-title office projects in 1H/21 Location Wangjing Wangjing Property type Office retail podium Residential retail podium Opening date /213 /212 Price (RMB/sq m) 1,-12, 9,-1, Developer Poly Real Estate Sino-Ocean Real Estate Project Poly International Plaza-T2 Poly Hyde Park Damei Central Plaza Location Wangjing North 3rd Ring Road CBD vicinity Opening date /213 /213 /213 Completion date GFA (sq m) 2, 24,89 94, Price (RMB/sq m),-6, 6,-7,,-6, Developer Poly Real Estate Group Poly Real Estate Group Damei Investment savills.com.cn/research 3

4 Briefing Beijing sales and investment August 21 GRAPH En-bloc investment volumes, 27-1H/21 TABLE 3 Major en-bloc transactions, 21 YTD Project Crosspoint Shopping Center Wangxin Plaza H/21 Buyer Gohigh / Ping an Trust Cindare Seller Fraser Centrepoint Insigma Group Property type Retail Office GRAPH 6 En-bloc investment volumes by property type, 27-1H/ Office Retail Apartment Service Apartment Hotel Complex Location Xinjiejkou ZGC Purchased area (sq m) Sales volume (RMB million) Unit price (RMB per sq m ) Purchaser nationality 14,2 1, ,4 44, Domestic Domestic Usage Lease Self-use GRAPH 7 Land transaction volumes, /28 / H/ % of the total consideration during the first half of 21. Land market Despite overall land transactions falling 44.% YoY to RMB2.1 billion in the second quarter, residential land plots saw growing interest from developers in reaction to rebounding transaction volumes in the residential sales market. Five residential land transactions were concluded in /21, with the majority commanding huge premiums over their reserve prices. Two significant deals of the quarter still managed to obtain large premiums, even though the agreement required a large portion of the land must be allocated to commodity housing. These deals included a residential plot in Haidian district transacting for RMB.64 billion a 49% premium and a plot in Daxing district transacting at RMB2.41 billion achieving a premium of 9%. Market outlook Steady demand from both domestic and overseas investors for limited prime investable stock is expected to support Grade A office capital values despite further rental compression. As a result, Grade A office gross yields are anticipated to continue the trend of moderately declining over the next year. Despite there being activity in the enbloc sales market in 1H/21, limited investable stock available for sale in Beijing is expected to see the enbloc sales market remain relatively calm in the second half of 21.

5 Briefing Beijing sales and investment August 21 TABLE 4 Major land transactions, /21 Plot Location Planned GFA (sq m) Consideration () Usage Accommodation value (RMB per sq m) Buyer Yongfeng plot Haidian district 28,72.64 Residential zoned plot 38, Beijing Capital Land Xiaotunxilu plot Fengtai district 29, 4.86 Residential zoned plot 16,8 Panggezhuang plot Daxing district 266, Mix-used 1, Beijing Urban Construction Group CIFI Group & Tian Heng Development & Gold Common Group Please contact us for further information Savills Research Savills Beijing Research Savills Agency Savills & Consultancy Investment James Macdonald Director, China james.macdonald@savills.com.cn Jack Xiong Director jack.xiong@savills.com.cn Anthony McQuade Senior Director anthony.mcquade@savills.com.cn Grant Ji Senior Director grant.ji@savills.com.cn Savills plc Savills is a leading global real estate service provider listed on the London Stock Exchange. The company established in 18, has a rich heritage with unrivalled growth. It is a company that leads rather than follows, and now has over 6 offices and associates throughout the Americas, Europe, Asia Pacific, Africa and the Middle East. This report is for general informative purposes only. It may not be published, reproduced or quoted in part or in whole, nor may it be used as a basis for any contract, prospectus, agreement or other document without prior consent. Whilst every effort has been made to ensure its accuracy, Savills accepts no liability whatsoever for any direct or consequential loss arising from its use. The content is strictly copyright and reproduction of the whole or part of it in any form is prohibited without written permission from Savills Research.