According to the latest Greater China Property Market Report released by Knight Frank, during the first quarter of 2013, China’s State Council launched its ‘Five New Measures’ to further tighten regulation of the residential property market. Purchasing power shifted to the commercial market, which is not subject to the same restrictions as home purchases, pushing up commercial sales prices and transaction volume.
Beijing
Grade-A office rents were stable during the first quarter of 2013, with the vacancy rate increasing one percentage point to 4.8%, due to tenant base restructuring. Grade-A office prices increased 6.1% quarter on quarter and 20.1% year on year, while investment yields dropped one percentage point to 6.6% quarter on quarter.
Shanghai
In the first quarter of 2013, monthly Grade-A office rents in Shanghai remained at US44.5 per sq m, the same level as at the end of 2012. Whilst, the vacancy rate of Grade-A offices remained stable at 5.1%. Thomas Lam, Director and Head of Research & Consultancy, Greater China at Knight Frank, expects, during 2013, Shanghai’s Grade-A office rents will experience a more modest 2 to 3% year-on-year increase.
Guangzhou
Grade-A office market remained stable in the first quarter of 2013, while sales grew 54% from the previous quarter and prices edged up 2%, with the average yield reaching 5.1%. Grade-A office supply fell 9% quarter on quarter with no new office launched. An estimated 100,000 to 200,000 sq m of new Grade-A office sales supply will launch in 2013. Thomas believes office sales will be robust, with sales volume in the second quarter growing 15% from the first. However, prices will only rise slightly, suppressed by new supply.