MARKET HIGHLIGHTS

 

OFFICE 

Around 1.5 million sq. m. of new supply was completed in Q3 2020, bringing the y-t-d total to 3.9 million sq. m., down by 40% y-o-y. Nationwide net absorption increased by 221% q-o-q and 19% y-o-y to reach 1.16 million sq. m. Technology companies and financial institutions were active. Reduced levels of new supply and stronger demand ensured nationwide vacancy fell by 0.2 pps to 24.1%.

 

Retail 

Retail activity continued to head along the recovery track in Q3 2020. Net absorption totalled 1.05 million sq. m., a strong turnaround from the negative take-up observed in the first half of the year. Leasing activity was largely driven by domestic cosmetics, F&B and lifestyle retailers funded by venture capital. New entrants from abroad continue to gauge market interest and this trend should translate to pipeline demand over the next one to two years.

 

Logistics 

Leasing demand further improved in Q3 2020 owing to the quick rebound in economic activity and the release of pent-up demand. Net absorption exceeded 1.0 million sq. m, an increase of 5% q-o-q and 53% y-o-y. Traditional retailers and wholesalers turned more active along with the recovery of brick-and-mortar retail sales.

 

Capital Market

Commercial real estate transaction volume totaled RMB 42.4 billion in Q3 2020, up 9.0% q-o-q as the strong economic recovery continued to lure investors back to the market. Domestic investors dominated volume, while the period also saw an uptick in enquiries and site inspections by foreign funds.