China MarketView Q1 2021

April 29, 2021

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  • 2021 Q1, business activity and lease negotiations resumed quickly in a  traditional quiet period. Net absorption in the 18 major cities tracked by CBRE totalled 1.54 million sq. m. Leasing activity was particularly strong in tier 1 markets, contributed over 50% of total net absorption. Stronger demand ensured the overall vacancy rate declined 1 ppts to 23.1%. Average nationwide office rents fell by 0.4% q-o-q, slower rate of decline compared to previous quarter.


  • Total retail sales grew by 33.9% y-o-y in Q1 2021 from the low base set at the onset of the COVID-19 pandemic. Retail net absorption reached 440,000 sq. m. in Q1 2021 and new supply and demand remained relatively balanced, with overall vacancy standing largely unchanged from the previous quarter, at 8.0%. Ground floor shopping mall rents increased by 0.2% y-o-y.


  • Warehousing demand registered a significant improvement in Q1 2021. Net absorption reached 1.13 million sq. m., 66% above the five-year average witnessed between 2015 -2019. New supply in Q1 2021 totalled 777,000 sq. m. The vacancy rate fell by 1% to 13.8%, the lowest level since the onset of the COVID-19 pandemic. Nationwide rents increased by 0.6% in Q1 2021.


  • Nationwide commercial real estate investment volume totalled RMB 42.4 billion in Q1 2021. While this marked a decline of 33.5% y-o-y from the same period of 2020. Investment volume for retail and hotel assets reached RMB 5.31 billion and RMB 5.72 billion, respectively, their highest quarterly totals since the onset of the pandemic.