Office

Nationwide net absorption registered 3.36 million sq. m. in 2019, a decline of 37% y-o-y due to the impact of the U.S.-China trade conflict, the slowdown in P2P lending and the consolidation of the co-working sector. New supply increased by 19% y-o-y to 7.4 million sq. m. Overall vacancy recorded to 21.7%. The TMT, finance and professional services sectors are the main drivers of leasing transaction in 2019.

 

Retail 

Around 5.9 million sq. m. of new malls opened in 2019. Several of them opened in non-core areas and were observed to be performing well and reporting high occupancy with the pre-commitment rate of 84.3%. Street fashion entrants accelerated expansion and tea brands remained aggressive. Omnichannel retailers continued to expand rapidly in 2019.

 

Logistics 

 

Logistics demand was robust in Q4 2019, supported by the traditional peak season for online shopping and year-end holidays. However, new supply in the 16 cities reached a record high of 1.67 million sq. m. in Q4. A continued wave of relocations to self-owned warehouses by major e-commerce platforms was observed, and the overall vacancy rate increased from 9% in 2018 to 12.6% by end-2019.

 

Capital market

Full-year 2019 investment turnover amounted to RMB 263.3 billion, representing a decline of 0.9% y-o-y and an impressive total despite the weaker economic and leasing market. Tier I cities continued to be the focus for investors. Investment activities in China may fluctuate in 2020 due to COVID-19.