China Real Estate Outlook Mid Year Review: Adjustments in GDP, Office Market, LogisticsRetail

Welcome to CBRE's 2024 China Real Estate Market Outlook Mid-Year Review, a comprehensive report that reassesses our predictions from the beginning of this year and evaluates what has proven correct or lacking in its forecasts.

From an economic perspective, China's GDP for the first half of 2024 grew by 5.0 year-over-year y-o-y, driven by robust export activities and a resurgence in manufacturing investments. However, domestic consumption remns weak, with retl sales up only by 3.7 y-o-y during H1 2024 and growing at a mere 2.0 pace in June alone. We have revised our full-year GDP forecast upwards to 4.9, yet the insufficiency of domestic demand poses significant short-term challenges for growth momentum.

In terms of office market dynamics, cost continues to be the decisive factor influencing occupier strategy in the near term. Following a conservative assessment earlier this year, we now project a decrease of around 25 in nationwide net absorption compared to our January forecast, as the recovery pace has outpaced expectations. Landlords are expected to mntn their flexibility on lease terms due to a favorable market position for tenants.

Regarding logistics real estate, CBRE's initial forecasts have proven largely accurate with leasing activities being predominantly supported by cross-border e-commerce platforms. With the exception of Shenzhen, Dongguan, and Huizhou experiencing severe undersupply, we've adjusted our rental projections downward for major markets across China. This should ensure that cities not suffering from oversupply capture upgrading demand from logistics providers, manufacturing firms, and retlers.

In the retl sector, CBRE has revised its full-year net absorption forecast to reflect a level similar to what was achieved in 2023. The adjustment is primarily due to the recent deceleration in sales growth among major brands, the cooling of FB expansion activities, and heightened competition from specialized properties.

Considering the sluggish leasing market landscape and investors' cautious stance towards ongoing asset revaluation, we have revised our full-year investment volume forecast downward by 5-10 compared to an originally predicted low year-over-year growth rate of 0-5. The strategy of seeking a wider safety margin to mitigate risks is likely to remn popular among real estate investors.

that all figures and forecasts are subject to change based on economic dynamics, market trs, and policy changes. For detled data across sectors, please visit CBRE China Data 360 for access to our comprehensive data subscription service.

For further information about CBRE's global operations, careers opportunities, corporate responsibility initiatives, investor relations, news updates, legal notices including privacy policies, cookie settings, and contact detls, refer to the respective sections of the provided link or directly on our official website.
This article is reproduced from: https://www.cbre.com.sg/insights/reports/2024-china-real-estate-market-outlook-mid-year-review

Please indicate when reprinting from: https://www.ao39.com/Rental_community/China_2024_Real_Estate_Outlook_Mid-Year_Review_CBRE.html