Strong commercial real estate investment demand continued during the first quarter, with $12 billion invested in mainland China, of which 35 percent was led by foreign capital, above the 31 percent share in the previous year, according to Cushman & Wakefield.
Office remained the most favored asset class, accounting for 39 percent (excluding mixed-use) of the total investment consideration within Greater China. While office assets will likely remain the most favored, given relatively stable cash flow and ease of operations, future supply is a potential concern. However, given the tight lending environment and increasing vacancy (18.1 percent as of first quarter), Cushman & Wakefield expects many developers to delay project launches, relieving pressure on the supply side.
Retail accounted for 11 percent of the total investment (excluding mixed-use). As 76 percent of GDP is driven by private consumption, the retail sector is increasingly shaping China’s economy.
