Research

Forging on – steering past the uncertainty ahead
Key themes to watch in Beijing commercial real estate

As we tread carefully into the Year of the Pig, we expect cautionary sentiment in the market to lead stakeholeders to act conservatively as we navigate through the uncertainties of 2019.

Despite ongoing trade war tensions and heightened concerns over slower economic growth, we can still consider 2018 a strong year for commercial real estate in Beijing. The TMT industry expanded quickly, industrial rents registered record growth, and a huge increase in foreign investment contributed to the 50 percent y-o-y increase in total en bloc sales.

But as 2019 gets underway, we are already seeing lowered expectations setting the tone. Conservative decisions are becoming popular under the current economic climate and are forecast to have a real impact on the market. That said, fast-rising start-ups are expected to remain a bright spot in the market, while consumer demand is set to further shift towards lifestyle-oriented offerings. Investors are expected to continue chasing opportunities under the belief that assets will be increasingly valuable over the long term.

With highlights from 2018 and projections for 2019, our report seeks to inform readers of the latest trends shaping the direction of the market. It is our hope that this report serves as a useful reference for your business plans over the coming year.  

Office

2018 Highlights

  • Booming TMT industry overtakes finance as dominant demand driver
  • Demand outstrips new supply despite increased economic concerns
  • Co-working demand fluctuates as market consolidates
  • Market sailing smoothly through supply  wave
  • CBD Core Area set back on track
  • Moderate growth recorded as CBD rents beat expectations

2019 Outlook

  • Market braces for looming doom
Capital Markets

2018 Highlights

  • Tight-monetary environment sees more assets surface on market
  • Foreign investment rises to nearly 25% of deals

2019 Outlook

  • Foreign investors to pursue assets; rare core opportunities to surface
Retail

2018 Highlights

  • Retailers dig deeper into demand with new niche segments
  • Online-offline integration accelerates
  • Domestic fashion retailers expanded
  • Urban new supply levels retreat as suburban growth set to soar
  • Strong results from strategic leasing at recently opened projects
  • Higher rents sought from busy F&B tenants

2019 Outlook

  • Consumption power expected to decline; consumers to prioritise ‘quality of life’ spending
Industrial

2018 Highlights

  • Persistent demand in tight-vacancy market

2019 Outlook

  • Strict-policy environment to stay

 

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