China real estate market

The office market has benefited from the rebound in the economy with a stable increase in leasing activity seen in Q2 2010. Meanwhile, the office market rental was supported by increased demand. The average rent for Guangzhou grade A office space was RMB 120.5 (US$17.6) per sq m per month at the end of the quarter, a 2.8% increase quarter-on-quarter (q-o-q).

Hongkou logistics cluster offers incentives to lure China transportation companies

Logistics companies looking to set up offices in China may be in for a bargain. Local governments have recently increased efforts to attract shipping and third-party logistics firms by offering incentives packages including 30-50 percent business tax reductions, 50-100 percent corporate income tax reductions, and 20 percent rental subsidies.

Office market heats up

The Beijing grade A office market continued to rebound in the second quarter of 2010, with the average grade A rental increasing by 3.9% quarter-on-quarter (q-o-q) to reach RMB 155.43 (US$22.76) per sq m per month. Meanwhile, the overall availability ratio for grade A office space fell from 18.1% to 15.41%.

Office rental sees uplift

The average grade A office transacted rental in Shanghai, China was RMB 6.8 (US$1.0) per sq m per day at the end of Q2 2010. The average city-wide grade A availability ratio reached 12.13%, which represented a decrease of a 0.87 percentage point quarter-on-quarter (q-o-q) and a decrease of 4.25 percentage points year-on-year (y-o-y) respectively.

Demand for commercial premises rises

In Q2, most office tenants were from the financial sector. Foreign enterprises also became active in this quarter. The overall net absorption in the grade A office market was 32,392 sq m and the average rental rose 1.29% quarter-on-quarter (q-o-q), reaching RMB 128.58 (US$18.82) per sq per month.

Global real estate execs express optimism at China GRI 2010

Investors and developers from some of the region's largest companies showed continuing enthusiasm for China's real estate industry at the Global Real Estate Institute (China GRI 2010) in Shanghai last week. Expert-led discussion at the day-long conference left most observers with the impression that the current upward trend would continue.

According to a recent report published by Jones Lane LaSalle, in 2009 the global financial crisis shifted real estate markets into tenants’ favor. No major city in Asia Pacific escaped the downward pressure on rents and hikes in vacancy .

Suburban areas provide opportunities outside major cities

As China has modernised over the last two decades it has also experienced an explosion in urban population so that it now has more than 100 cities of over 1 million people. With the economic opportunities centred in the major cities and given the attractions of urban living, the country now faces a major challenge in managing its urban growth.

Colliers International just released its report Shanghai Property Market and 2010 Outlook covering recent developments in the city's property sector and projecting trends for the coming year.