M A R K E T B E AT

BEIJING
Capital Markets Q1 2020

Market Overview
YoY
Chg In Q1 2020, under the dual blow s of the COVID-19 outbreak and dow nw ard pressures on the economy, economic activity came to a

11.8B -39.5%
virtual standstill. The commercial real estate market suffered a heavy impact from the significantly reduced market activities. Four
YTD Investment Volume (RMB) transactions w ith a combined value of approximately RMB11.8 billion w ere completed in the investment market, dow n 39.5% y-o-y.
The office mar ket came under particular dow nward pressure during the period, but it remains the preferred real estate asset f or investors.
69,337 -13.3% Of the Q1 transactions three w ere office buildings, w ith a total transaction value of RMB 11.47 billion.
Office Capital Value (RMB/Sq m)
In the past tw o years, foreign investors have gradually increased their portfolio in mainland China. At the end of 2019, foreign investor

4.9% +0.4 bps

transactions accounted for 26% of Beijing's total transaction volume. Apart from assets in the core submarkets, foreign inves tors have
Office Gross Yield also begun to consider projects in emerging submarkets, such as Shangdi, Wangjing, Lize and Tongzhou, due to the limited high-quality
supply available in the core submarket. In the quarter, GIC acquired the LG Tw in Tow ers along the East Chang’an Avenue in CBD, and
the Vanke Times Center, an urban renew al project in Wangjing submarket, for a combined transaction value of RMB9.75 billion. These
deals accounted for 82.8% of the quarter's total transaction volume.
ECONOMIC INDICATORS
2019 Outlook

YoY 12-Mo. The COVID-19 outbreak has curtailed interactions betw een buyers and sellers, and project site visits w ere prohibited. This w ill extend
Chg Forecast transaction timelines in the short-term. We can expect to see ow ners low er their price expectations in response to financial pressures
6.1% and cash flow issues, and this w ill increase the available selection at low er ranges in the market. Therefore, the impact of the outbreak
GDP grow th has brought both challenges and opportunities to the investment market. Post-outbreak, investment market supply and demand w ill
(annualized)
gradually be released, and w e expect to see activity pick up dramatically.

2.3%
CPI grow th
INVESTMENT VOLUME BY CAPITAL SOURCE INVESTMENT VOLUME BY SECTOR

2.6% 80,000 80,000

70,000
10-year government 70,000

RMB (million)
60,000
RMB (million)

bond rate 60,000

50,000 50,000
Source: Beijing Stats Bureau, China Foreign 40,000 40,000
Exchange Trade System, Oxford Economics 30,000 30,000
20,000 20,000
10,000 10,000
0 0
2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020
Q1 Q1
Domestic Foreign Office Retail Industrial Hotel Mixed Use Condo Others
M A R K E T B E AT

BEIJING
Capital Markets Q1 2020

KEY SALE TRANSACTIONS (Past 12 Months)

PRICE
PROPERT Y LOCATION PURCHASER VENDOR SECTOR
(RMB BN)

Chaoyang
LG Tw in Tow ers GIC & COFCO LG Group (HK) Office 8.50
(CBD)

Haidian
Vanke Times Center (45% stake) GIC Vanke Office 1.70
(Shangdi)

Haidian Baring Private Equity

Fangzhou Plaza Mapletree Office 0.75
(Shangdi) Asia

Ronsin Technology Center Chaoyang

An Allianz and Alpha D&J China Office 6.63
(85% stake) (Wangjing)

Chaoyang Beijing Shuangquan Real

Beijing Aegean Mall GO HIGH Retail 3.00
(Taiyanggong) Estate

GROSS YIELD OF GRADE A OFFICE CAPITAL VALUE OF GRADE A OFFICE

Sabrina Wei
5.1 100,000 Head of North China Research
5.0 +86 10 8519 8087 / sabrina.d.w ei@cushw ake.com
90,000
RMB/sq m

4.9
Gordon Liu
4.8
4.7 80,000 Head of Capital Markets, North China
4.6
+86 10 8519 8113 / gordon.b.liu@cushw ake.com
%

70,000
4.5
4.4 A CUSHMAN & WAKEFIELD RESEARCH
60,000 PUBLICATION
4.3
4.2 ©2020 Cushman & Wakefield. All rights reserved. The
50,000 information contained within this report is gathered from
4.1
multiple sources believed to be reliable. The information may
4.0 40,000 contain errors or omissions and is presented without any
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