In China, the commercial property sector is displaying resilience with pockets of demand despite an overall downturn in the real estate market. According to property consultancy JLL, Beijing is experiencing a notable uptick in rents for prime retail locations, marking the fastest increase since 2019. Rents surged by 1.3% in the first quarter of this year compared to the final quarter of 2023.
JLL attributes this rise in rents to growing demand from new food and beverage brands, niche foreign fashion offerings, and electric car companies, particularly in shopping mall storefronts. The consultancy anticipates this demand to persist throughout the year, contributing to further rent increases, although current rates still lag behind pre-pandemic levels.
Despite the recent property market challenges, sales of offices and commercial-use properties in China saw a 15% and 17% rise by floor area respectively in January and February compared to the previous year. Conversely, residential property sales dipped by nearly 25% during the same period, following a trend of decreased sales for both commercial and residential properties throughout last year.
The impact of COVID-19 restrictions on movement contributed to reduced demand for commercial property in China, echoing global patterns. While the Chinese economy took longer than expected to recover from the pandemic, the commercial property sector has shown signs of resilience amid broader real estate challenges.
