Savills Research & Consultancy aims to offer objective advice to clients in order to help them make well-informed real estate related decisions and realise pre-defined goals.
Beijing is the political and economic hub of China, and as a result is host to one of the most prosperous economies in the country. Historically, Beijing has maintained a GDP growth rate very similar to that of the China-wide figure.
Recently, Chengdu placed first out of five cities in the 2015 China Fashion Index, the other cities being Xiamen, Shenzhen, Shanghai and Beijing.This is due to Chengdu consumers’ attitudes towards fashion and their willingness to spend, combined with the overall steady economic growth currently being experienced by the city, and current comfortable living standards.
According to figures from the China National Tourism Administration (CNTA), the number of star-rated hotels in Guangzhou fell from 14,237 in 2009 to 11,970 in 2015, down 15.92%. However, given the increase in individuals’ consumption ability and higher experiential requirements, the number of mid- to high-end hotels witnessed steady growth; some unrated boutique hotels also saw strong development.
China’s economic growth slowed to a 25-year low of 6.9% in 2015. In response, a series of stimulus policies were launched, bringing increased liquidity to the real estate market and boosting investment activity. Looser monetary policies and a stock market rout have also brought an influx of new capital into Shanghai’s real estate market in search of a safe haven for investment opportunities.
Shenzhen, one of China’s Special Economic Zones, serves as an important economic and international trade centre in southern China. Due to its proximity to Hong Kong, Shenzhen is often thought of as China’s window to the world.
While Tianjin grabbed international news headlines in 2015 as the site of the Binhai Blast, the city still attracted domestic and foreign investment as it continues to emerge as a strategically vital port on the Bohai Economic Rim (BER), helping further integrate the economies of Beijing and Hebei.
Zhuhai is located at the southern end of the Pearl River Delta and is one of the central cities in the area. Over the past three decades, Zhuhai has been growing into a modern tourism city thanks to its beautiful scenery, and is a regional hub for transportation in southwest China.
Warehouse capital values have increased substantially after the GFC in 2008, recording a 3-fold rise from Q1/2009 to Q4/2015. Besides strong logistics demand induced by the thriving retail sector, e-commerce and strong local consumption expenditure, the introduction of the revitalization policy for industrial premises in 2010, which allows qualified industrial / godown buildings to be refurbished into commercial use without payment of a waiver fee, has also induced strong investment (and sometime speculative) demand for both industrial and warehouse premises. The average warehouse capital value stood at HK$3,216 per sq ft gross in Q4/2015.
The logistics sector is booming globally, and Japan is no exception. The growth of e-commerce is generating strong real demand for logistics space, and Japan’s logistics sector has significant room for growth in order to catch up with overseas markets and is well-positioned for medium- to long-term expansion. That said, Tokyo has recently seen a large influx of supply, especially over the last six months, and supply currently seems to have run ahead of demand. Osaka will also experience a large increase in supply late this year and is likely to see similar temporary softness.
The consumer sentiment index, which fell below 100 in the wake of the MERS outbreak, recovered to 100 in January 2016. However, household consumption has remained sluggish amidst slow economic growth, the high level of household debt which reached KRW 1,200 trillion (84% of GDP), and the increase in pension and insurance premiums and taxes, as well as rising unemployment for those in their 20s and early 30s. The expenditure-to-income ratio declined from 77% in 2010 to 72% in 2015, showing a conservative spending pattern as the household economy directly affects consumption patterns.