China MarketView Q3 2021

November 11, 2021

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Record high leasing demand heralds start of new growth cycle




New nationwide office supply reached 1.47 million sq. m. in Q3 2021. Overall net absorption totalled 2.03 million sq. m., a figure on par with the previous quarter. Demand from tier I cities contributed 73% of the total. This quarter’s robust demand further pushed down the overall vacancy rate by 0.8 ppts q-o-q to 21.4%. Average office rents declined for the fifth consecutive quarter, falling 0.02% q-o-q.




Around 3.17 million sq. m. of new retail supply came on stream nationwide in Q3 2021. Average occupancy in new supply stood at 92%. Strong pre-commitments in new supply pushed up nationwide net absorption to 3 million sq. m., the highest level since 2019. Overall vacancy decreased 0.2 ppts to 7.6% while rents edged up by 0.3% q-o-q.




Logistics net absorption in the 16 cities tracked by CBRE reached a record-high 2.09 million sq. m., an increase of 60% q-o-q and 67% y-o-y. Short-term demand from 3PLs strengthened ahead of the Double 11 shopping festival, while long-term demand from manufacturers increased as China's exports continued to outperform. The overall vacancy rate fell from 14.1% in Q2 2021 to 13.2% in Q3 2021, its lowest point since the beginning of 2020.




Commercial real estate transaction volume reached RMB 46 billion in Q3 2021, a decline of 53.4% q-o-q but a slight increase of 3.6% y-o-y. Transaction volume was level with that recorded in Q3 2019 and 3.5% higher than the five-year average for the third quarter.