Kaide group packs six Raffles to Ping An Life, China, at a price of 9.6 billion yuan. Another week ago, Pan Shiyi, the “charter company”, sold 91% of SOHO China to Blackstone Group at a transaction price of US $3 billion. On June 7, harmony health purchased SK building in Beijing with 9.06 billion yuan.
Within 22 days, three block transactions in the field of commercial real estate totaled about 38 billion yuan, which is rare in the industry. But the signal behind it is that institutions such as venture capital and asset management are attacking commercial real estate assets in China, and the cost is not high.
“From the performance of the large-scale property transaction, although the trading market cycle has become longer, under the driving of self-use and investment, the market activity has not decreased, and investors still pay high attention to market quality projects.” On June 24, at the third China commercial real estate brand building forum, Liu Kai, Deputy Secretary General of quanlian Real Estate Chamber of Commerce and chairman of fangxun.com, told Securities Daily and other media that office buildings are still the first choice for commercial real estate investors, whether for self use or investment.
As Liu Kai said, shopping malls, office buildings and industrial parks are important carriers of regional economic development and professional transformation. However, excluding the high fever in the regional market, from the perspective of the overall market, the current commercial real estate is at the peak of supply for many consecutive years, driving the vacancy rate higher and the rent (price) level lower.
Between this “high” and “low”, even the core commercial assets of the first tier cities, together with the first-class operators, seem to be unable to bear the pressure of the low rate of return on operation and the heavy precipitation of funds, eager to leave the market and seek “the safety of the bag”. What’s wrong with the current commercial real estate? With such thinking, the reporter of Securities Daily tries to explore the truth of the current commercial real estate market through interview and research.
Three outstanding problems
From the market scale, according to the statistics of Shell Research Institute, the annual compound growth rate of commercial office area in the past ten years is more than 10%; By 2020, the commercial business area will be 2.9 billion square meters; It is conservatively estimated that if the total sales scale of real estate in 2021 is 17.5 trillion yuan, including 14.3 trillion yuan for residential and 2.6 trillion yuan for commercial real estate.
Of course, the scale of commercial real estate stock is huge“ In 2021, it is estimated that there will be 700 million square meters of office buildings and 17 billion square meters of industrial parks in China. China has a large number of stock assets. ” Min Jie, chairman of kapok Exchange Group Co., Ltd., told Securities Daily that its three major performances are low rental yield, extensive operation and undervalued assets.
It is not difficult to see that the above “three performances” bring about the market situation of high vacancy rate. According to the statistics of the housing information index, in the second half of 2020, the vacancy rate of office buildings in the first tier cities will all run at more than 20%, reaching a ten-year high; Shanghai and Shenzhen are even more than 25%. The average vacancy rate of office buildings in China is close to 30%, and the vacancy rate of commercial buildings is as high as 35%.
In the Research Report of China’s top 100 commercial real estate in 2021, the Real Estate Index Research Institute pointed out that there are three prominent problems in the current commercial real estate market. First, the overall new supply is large, and the long-term idle assets affect the sustainable development; Second, the demand for new businesses, industries and offices is seriously insufficient to support such a large-scale supply; Third, there is a mismatch between industrial development and grade A office buildings in the commercial real estate market.
Three directions change
“Although the short-term supply and stock de-entry are still the test that the market needs to face, the situation of commercial real estate has not changed for a long time.” Liu Kai, Deputy Secretary General of quanlian Real Estate Chamber of Commerce and chairman of fangxun.com, told Securities Daily that with the continuous promotion of national financial opening and scientific and technological innovation, the office market still has a large growth space, and the industry’s deep operation and innovation trend will be further deepened.