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China Figures Q3 2023

October 27, 2023 10 Minute Read

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OFFICE

 

Nationwide office supply increased by 21% q-o-q and 50% y-o-y to 2.16 million sq. m. in Q3 2023, the highest quarterly total since Q4 2021. Weak demand ensured office net absorption fell by 4% q-o-q to 730,000 sq. m., although this marked an increase of 25% in y-o-y terms due to Q3 2022’s low base. Nationwide office vacancy rose by 0.7-pps q-o-q to 24.4%, a historical high, while average rents dipped by a further 1.1% q-o-q.


RETAIL

 

New supply reached 1.71 million sq. m., a similar level to the previous quarter. Net absorption rose by 91% q-o-q and 121% y-o-y to 1.7 million sq. m., marking the highest total in the past seven quarters and a return to the five-year average seen prior to the onset of the pandemic. Vacancy declined for the first time since Q4 2021, falling by 0.2-pps q-o-q to 9.1%. Average rents stabilised, with Beijing, Shanghai and major tier II cities in East and Central China registering slight gains.


LOGISTICS

 

The surge in cross-border e-commerce pushed up total national warehouse net absorption to 2.66 million sq. m., representing growth of 123% q-o-q and 53% y-o-y. Along with increases in inventory holding and transportation needs ahead of the Double 11 festival, supply chain demand from automotive firms increased. Vacancy fell after seven consecutive quarterly increases while rents declined by 0.7% q-o-q.


INVESTMENT

 

Commercial real estate investment volume totalled RMB 54.3 billion in Q3 2023, an increase of 44% q-o-q and 12% y-o-y, driven by purchases by corporations and developers. Institutions and property funds remained cautious, accounting for just 22% of the overall total. Year-to-date transaction volume registered RMB 149.0 billion, a decline of 5% y-o-y.