Commercial real estate investment market set to boom
China will emerge as the Asia Pacific's largest commercial real estate investment market in a decade, global property services provider CBRE predicted on Sunday at the third China International Import Expo.
It said annual transaction volumes will more than double from current levels to reach around 650 billion yuan (US$98 billion) per year.
By 2030, the total value of investable commercial real estate in China will increase to about 80 trillion yuan, with a range of new investment market trends.
These include greater integration between real estate and finance, the rise of new tier-one cities, the growth of alternative real estate assets and opportunities resulting from accelerated urban renewal, according to CBRE's China 2030 report.
"The size of a country's commercial real estate investment market is closely correlated to its speed of development and GDP," said Sam Xie, head of research, CBRE China.
"With the service industry set to increase its contribution to the economy and per capita GDP in the coming years, CBRE expects China to become the largest commercial real estate investment market in Asia Pacific by 2030."
In 2019, China's commercial real estate investment volume accounted for just 0.2 percent of GDP, compared with between 1.6 and 2.3 percent in Europe and the US, according to CBRE data.
While the coming new era of commercial real estate development will be characterized by sustainability, technological innovation and flexible workplaces, the emergence of new tier-one cities and alternative asset classes, among other factors, will create significant new opportunities for investment, the report said.
By 2030, Hangzhou, Nanjing, Suzhou, Chengdu and Wuhan, with the strongest growth prospects as indicated by their GDP and GDP per capita data, will all emerge as tier-one cities, according to CBRE's forecast.
Meanwhile, investment in alternative sectors is set to boom over the next decade, underpinned by changing consumption patterns and new technology adoption.
In particular, data centers and cold storage, characterised by long lease terms, high rental returns and strong levels of resilience to market cycles, are ideal assets for medium and long-term investors seeking stable cash flow, while senior housing and rental apartments, health care and high-tech parks, are set to gain momentum in the coming decade.