高力国际-乘风破浪，踏浪前行境内外投资者加大对于中国房地产的投资（英文）-13页_1mb

Summary of Colliers Radar Report: China's Commercial Real Estate Market (2021)

Core Content

This report by Colliers Radar provides an in-depth analysis of the current state and future outlook of the Chinese commercial real estate market, focusing on investor sentiment, economic recovery, and investment trends.

Main Points

• Economic Recovery: China's economy is recovering strongly, with Oxford Economics forecasting an 8.4% growth in 2021. The recovery momentum surpasses that of other major global economies.
• Investor Confidence: 74% of respondents are willing to increase their investments in China, showing a three-year upward trend in investment willingness (49% in 2019, 65% in 2020).
• Investment Preferences: Logistics and business parks are the top preferred asset types, each with 15% of the respondents. Office buildings (13%) and data centers (12%) follow closely. Community retail has emerged as a new area of interest.
• Alternative Assets: Cold chain, senior living, and medical & beauty sectors are among the most favored alternative investments. Cold chain and senior living are expected to grow rapidly.
• Geographical Focus: East China and the Greater Bay Area remain top investment destinations. Shanghai and Shenzhen are the most attractive Tier-1 cities, while Hangzhou and Chengdu lead in non-Tier-1 cities.
• Investment Mandates: 84% of respondents expect a cap rate of 4.0% to 6.0%. Target IRR ranges from 10% to 15% for 60% of respondents, with 29% targeting over 15%. Holding periods are generally longer, with 40% preferring over five years.
• Regulatory Environment: The government is unlikely to introduce new favorable policies for the commercial real estate market. However, the expansion of REITs is expected to provide an alternative exit strategy.
• Financing Trends: Bank loans remain the primary source of financing (16%). Private equity funding has grown to second place, while insurance companies have increased their involvement due to regulatory and market changes. Trust firms have seen a decline in their role.

Key Concerns

• Market Stability: Investors are increasingly concerned about the stability of tenant leasing terms and the impact of economic fluctuations.
• Regulatory Changes: 29% of respondents are worried about changing regulations, particularly the Three Redlines policy, which affects the debt levels of real estate companies.
• Financing Challenges: 55% of respondents expect financing to be more difficult in 2021, due to stricter financial supervision and reduced credit availability.
• ESG Consideration: Only 6% of respondents consider ESG factors, indicating a need for further development in this area.

Strategic Outlook

• Resilience and Adaptation: Investors are adapting their strategies to focus on stability, long-term growth, and diversification.
• Opportunities in Alternatives: The cold chain and senior living sectors are anticipated to grow rapidly due to increasing demand and supportive policies.
• REITs Development: The successful issuance of C-REITs is seen as a positive development for the market, promoting transparency and investment liquidity.

Conclusion

The report highlights the resilience and growing appeal of the Chinese commercial real estate market, driven by economic recovery, supportive policies, and evolving investment strategies. Investors are becoming more strategic, emphasizing long-term stability and diversified opportunities, especially in emerging sectors. The development of REITs and the regulatory environment are key factors influencing future investment decisions and market dynamics.