Shanghai real estate investment holds steady

Cao Qian
En bloc investment deals valued at 106.5 billion yuan were completed in the city last year, marking a fourth consecutive annual tally above 100 billion yuan.
Cao Qian

Real estate investment in Shanghai was above the 100-billion-yuan (US$14.54 billion) mark for the fourth consecutive year in 2019 as investors remained generally positive on the city's long-term market outlook.

Between January and December, en bloc investment deals valued at around 106.5 billion yuan were completed in the city, compared with 110 billion yuan in 2018, global property consultancy JLL said in a recent report.

However, when excluding lagged transactions from 2018 and two major government-backed deals from last year's tally, investment volume fell notably to about 65.1 billion yuan, according to JLL, which attributed the drop to softening office market performance as well as increasingly cautious sentiment among investors.

"We expect the market to remain active in 2020 as investors continue to seek investment opportunities," said Jim Yip, head of capital markets for JLL's China & East China operation. "In an environment of low interest rates, core, stabilized assets will receive more favor and attention from investors."

Throughout the year, offices remained the most sought-after type of property among buyers, accounting for 58.7 percent of total sales.

In the last quarter of 2019, the city witnessed the announcement of several notable transactions, marking the latest signs of resilience for Shanghai's property investment market. These included the acquisition of Pullman Skyway in Dapuqiao, Huangpu District, by Hong Kong Shanghai Alliance, and the purchase of Sanlin InCity, Pudong New Area, for 2.42 billion yuan by a consortium comprising ARA Partners and two other companies, according to JLL data.

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