Economy: Economic development over the next five years will rely more upon domestic consumption and technological innovation. CBRE expects China to register GDP growth of 8.2% in 2021, underpinned by the new “dual circulation” economic development strategy.
Office: Employers in Mainland China continue to believe that the workplace offers advantages over remote work. Office demand witnessed rapid rebound with continuously growing net absorption since it turned positive in Q2. Technology and finance companies served as the key demand driver. The historical high new supply in 2021 still puts owners in pressure but space availability in core CBD starts to drop, pushing rents to move upwards.
Retail: Although the pandemic significantly hit the retail sector, it facilitated the upgrading and transformation of this sector by emphasizing omni-channel and new retail offerings. With a more balancing supply and demand retail market expected in the coming two years, rents are likely to return to pre-pandemic levels in 2022.
Logistics: CBRE expects demand to recover faster than expected in 2021, thanks to the combined effect of structural growth and a cyclical upturn. Net absorption is likely to increase by 30-50% y-o-y in 2021. While overall rents are expected to return to growth in 2021, markets will diverge, meaning that landlords and occupiers should adjust their expectations and strategies accordingly.
Capital Market: With growing investment appetite, market sentiment and purchasing activity staged a brisk recovery in H2 2020. Meanwhile, deleveraging and fund expiries push up asset availability. CBRE expects commercial real estate investment volume to increase by 15-20% y-o-y this year. Logistics properties will remain keenly sought after and prices of stabilised Grade A offices meet investors’ expectations.