CBRE Forum 2021 Change

Despite periodic outbreaks of COVID-19, China’s economy and commercial real estate market has experienced a steady recovery over the course of 2021. GDP continued to lead that of other major economies’ in H1 2021, registering y-o-y growth of 12.7%. Fixed asset investment, domestic consumption and exports all achieved double-digit growth in the first six months of the year. Commercial real estate leasing supply and demand have risen significantly over the course of 2021, while investment volume has risen to new highs. Pharmaceuticals and community group purchasing platforms are displaying robust demand, while the recent launch of C-REITs is set to provide a solid foundation for the continued growth of the country’s commercial real estate investment market.

Structural opportunities for investors continue to emerge. The coworking sector has expanded rapidly in recent years on the back of a start-up boom and growing demand from larger corporations for flexible space, while the rise of e-commerce has spurred the transformation of physical retail and driven a decade of rapid growth in demand for logistics assets. Elsewhere, the green light for insurance funds to invest in real estate has ushered in a new era for commercial real estate investment.

The COVID-19 pandemic drew a line under the previous economic cycle and has brought about significant change to people’s daily routines. Remote working and flexible office space have been adopted on a far grander scale, while the government, enterprises and the public are paying greater attention to health and wellness in the built environment. Online retail penetration has accelerated significantly, while Environmental, Social & Governance (ESG) has become a domestic and global priority.

This report by CBRE identifies seven of the biggest changes to have recently impacted China’s commercial real estate market and sets out appropriate strategies for occupiers and investors seeking to formulate their response to these trends.