China Figures Q3 2022

Office

Several new offices schemes originally scheduled to be completed in H1 2022 were finally released onto the market in Q3 2022, pushing up totaled new supply to 1.4 million sq. m. Nationwide office net absorption rebounded slightly to 550,000 sq. m., with net take-up in 15 of the 18 major cities increasing from the previous quarter. The concentrated release of supply and relatively slow recovery of demand pushed up overall office vacancy by 0.5 pps to 22.3%, while nationwide average rents fell by a further 0.7% q-o-q.

Retail

Around 1.28 million sq. m. of new retail supply came on stream in Q3 2022., an increase of 51% m-o-m. Driven by the addition of new projects, net absorption reached 800,000 sq. m., a rise of 196% m-o-m. Overall vacancy rose 0.4 pps from the previous quarter to 8.2%, primarily due to the increase in new supply and the expiry of several leases. Ground floor shopping mall rents continued to decline, falling by 0.3% q-o-q.

Logistics

Stronger economic momentum pushed up national warehouse demand in Q3, with net absorption rising by 63% q-o-q to 1.64 million sq. m.. E-commerce platforms accounted for 50% of new leases as companies took more space to cater to year-end online promotional events. By region, North China and East China contributed 77% of total net absorption. The national logistics rental index increased by 1.1% y-o-y but was flat on a q-o-q basis.

Investment

Nationwide commercial real estate investment volume registered RMB 45.6 billion in Q3 2022, marking declines of 14.9% q-o-q and 13.0% y-o-y. Investment in new economy real estate totalled RMB 11.7 billion in Q3 2022, a decline of 23% q-o-q but 25% of the overall total.