Foshan Office and Retail Market Overview Q4 2017

Transcription

1 Foshan Office and Retail Market Overview Q4 2017

2 Macro Overview 2

3 Foshan Economic Overview Economic Indicators Foshan Zhengzhou Changsha Wuhan Guangzhou Population (10 thousand, 2016) , City Area (sq km) 3, , , , ,843.4 GDP (RMB100 million, Q ) 6, , , , ,509.1 Value-added of Tertiary Industry (RMB100 million, Q ) 2, , ,411.2 N/A 10,688.8 Unemployment Rate (2016) 2.4% 1.9% 2.7% 2.9% 2.4% Total Retail Sales (RMB100 million, Q ) 2, , , , ,888.9 Per Capita Disposable Income of Urban Residents (Q ) 43,120 N/A 36, ,747.0 N/A Consumer Price Index (Q ) Real Estate Development Investment (RMB100 million, Q ) 1, , , , ,879.6 Source: Statistics Bureau of each city 3

4 Foshan Economic Overview Office and Commercial Land Transaction in 1H 2017 Land Address Purchaser District Land Area (sq m) Total Price (million RMB) Premium Plot Ratio Unit Price (RMB/sq m) Block 01-B2-03-1, E. Gongye highway, Beijiao Town Chuangzhi New Town Guangdong Shunbei Property development Ltd. Co. Guangdong Shunde Holding Group Shunde 3, , & 4.0 1,550 Shunde 22,065 13, ,010 S. Caihong Rd, W. Jingui Rd and E. Minan Rd, Shunde New Town Zhongshan Daxin Managerial Investment Ltd. Shunde 40,835 41, ,429 Source: China Index Academy, research 4

5 Foshan Economic Overview Office and Commercial Land Transaction in 2H 2017 Land Address Purchaser District Land Area (sq m) Total Price (million RMB) Premium Plot Ratio Unit Price (RMB/sq m) N. Zhaoxiang Rd, S. Shanghui yuan Block , S. Zhongyang St, E. Baocui Bei Rd, GD High Tech Service Zone for Financial Block , S. Zhongyang St, E. Baocui Bei Rd, GD High Tech Service Zone for Financial Intersection of Guangfo Highway and Lianhe Rd, Yanbu, Dali Town Creator Group Chan Cheng 3, , ,095.2 Wision Nanhai 14, , & 5.3 2,156.6 HaiTian International Group Guangdong Guangfo Huigu Industrial Park development Ltd. Co. Nanhai 15, , & 5.3 2,101.9 Nanhai 51, , & 5.0 1,501.6 S. Dongle Rd, E. Chuangzhi Rd, Shunde New Town Country Garden Group Shunde 62, , ,586.2 E. Bigui Rd, S. Dongle Rd, Shunde New Town Country Garden Group Shunde 55, , ,711.6 Source: China Index Academy, research 5

6 Grade A Office Leasing Market 6

7 Foshan Urban Grade A Office Market Submarket Highlights Qian Deng Hu Stock: 67,960 sq m Average Rent: RMB62.0 Availability Ratio: 12.6% Zu Miao Stock: 676,566 sq m Average Rent: RMB69.8 Availability Ratio: 32.7% Jihua Road Stock: 277,800 sq m Average Rent: RMB69.4 Availability Ratio: 15.6% Stock: 216,548 sq m Average Rent: RMB47.2 Availability Ratio: 65.6% Foshan New Town New projects in 2017 Note: Average rent (RMB/sq m/mo) refers to face rent based on GFA Source: Based on Google Site Solution II report 7

8 Foshan Urban Grade A Office Market Market Dynamics Annual Supply, Net Absorption and Availability Ratio sq m 250, , , ,000 50, % 40% 30% 20% 10% 0% Annual Supply Net Absorption Availability Ratio Three Grade A office projects were completed in Q4 at a combined 232,508 sq m of new supply, pushing up stock to approximately 1.2 million sq m at the end of the year, up 23.1% y-o-y. By submarket, Foshan New Town received two of these projects, while Zu Miao submarket received one. Robust demand for office space helped Foshan record net absorption of 203,181.3 sq m for the year, which was a 2.7-fold increase over Benefiting from transportation infrastructure and an improving business environment, Qian Deng Hu submarket accounted for 38.4% of citywide net absorption in Despite a large volume of new supply throughout 2017, the citywide vacancy rate fell 4.9 percentage points y-o-y to 33.6% due to robust demand. Major Leasing Transactions Submarket Property Tenant Qian Deng Hu Glory IFC Wayes Zu Miao Lingnan Tiandi Commercial Plaza Huawei Qian Deng Hu Foshan Starry Winking VCBNK Qian Deng Hu Foshan Starry Winking Taikang Life Qian Deng Hu Glory IFC JD.com A number of financial, insurance and security firms were attracted to the city s office market due to tax and other incentives on offer. Notably, office leases were taken out in 2017 by such companies as Bank of Guangzhou, Guangdong Technology Financial Group and Cigno & CMB. Moreover, the city s strong manufacturing base attracted services firms and wholesale/retail/trade companies. Another trend in the leasing market saw companies increasingly move their back offices from Guangzhou to Foshan. Source: research 8

9 Foshan Urban Grade A Office Market Market Dynamics Rental RMB/sq m/month Amid downward pressure stemming from newly completed projects, overall average rent in Foshan decreased 2.9% y-o-y to RMB64.7 per sq m per month at the end of Q4. As available space tightened, average rent in the Ji Hua Road submarket increased 5.9% to RMB69.4 per sq m per month at the end of Q4. Average Rental Year-end Stock and Forecast sq m 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000, ,000 0 Foshan s Grade A office market is expected to add approximately 585,500 sq m of new supply in Projects are scattered throughout all the city s submarkets except for Zu Miao. Qian Deng Hu submarket should receive the largest share of the new supply at 64.8%. Considering the significant volume of new supply in the pipeline, the market is expected to face pressure over the coming few years. But at the same time, investment and new company setups are expected to flow in to Foshan and drive demand for Grade A office space. Foshan should also benefit from ongoing city development, as well as ongoing adjustments to its industrial structure towards a services driven economy. Opportunities also should arise from the Guangzhou-Hong Kong-Macau Greater Bay Area. Ji Hua Rd Qian Deng Hu Zu Miao Foshan New Town Source: research 9

10 Foshan Urban Grade A Office Market Future Supply ( ) sq m 800, , , ,000 Tian an Center Greenland Center II Xing Xing Plaza Vanke HQ (Foshan) 400, , , ,000 0 China Merchants Meihua IFC Yiyun -- Main Tower R&F IFC M-CITY Grandblue Plaza Oupu International Xin Kai Plaza - HQ Center CITIC Bank Plaza HQ of Foshan- Jicheng Finance Baoneng IFC Suning Plaza Enterprises Confed. Zhongying Shengda Foshan New Town Qian Deng Hu Ji Hua Road 10

11 Foshan Urban Prime Retail Market 11

12 Foshan Urban Prime Retail Market Submarket Highlights Scale:4km Stock: 415,000 sqm Average Rent: RMB367.5 Vacancy Rate: 24.1% Guicheng Stock: 684,000 sq m Average Rent: RMB280.0 Vacancy Rate: 18.8% Zu Miao Pingzhou Jihua Rd Stock: 265,000 sq m Average Rent: RMB238.8 Vacancy Rate: 26.1% Foshan New Town Note: Average rents (RMB/sq m/mo) are based on ground floor in prime locations in major shopping centers, excluding management fee, promotional fee and other fees. New projects in 2017 Source: Based on Google Site Solution II report research 12

13 Foshan Urban Prime Retail Market Market Dynamics sq m 400, , , , Annual Supply Net Absorption Vacancy Rate Annual Supply, Net Absorption and Vacancy Rate 25% 20% 15% 10% 5% 0% Foshan added two new prime retail projects in The completions brought more than 180,000 sq m of new supply and increased prime retail stock in urban areas to approximately 1.56 million sq m at year s end. The vacancy rate across the city s urban areas increased 4.3 percentage points y-o-y to 23.8% at year s end owing to the new completions and ongoing adjustments at some existing malls. Major Store Opening Name Grandview Young Oriental Plaza Capital Mall Nanhai Vanke Nanhai Wanda Shining 101 Submarket Zu Miao Zu Miao Guicheng Guicheng Guicheng Foshan New Town Typical Tenants Tsui Wah Restaurant, MOLE, EMU, Starbucks, Hi Life Style, UR, Cheese Bomb JD Home, Morals Village Hot Pot, CGV Cinemas Starbucks, Heytea, Xiaolongkan Chongqing Hot Pot Gloria, Paul Frank, Rise Immersion Subject English MINAKEVIN International Etiquette Institute, Kungfu Froggy, Dakasi, Channel KTV CGV Cinemas, KFC, Gg s Party Map, LEGO Education Center Store, Yishion, Watsons F&B remained the leader in terms of retail absorption. Heytea continued to expand rapidly in Foshan, adding locations at Sunlink International Center, Polly Mall and Nova. Mass market apparel brands also expanded rapidly, with UR, Gloria and Tutuanna opening additional locations in the city. Other emerging retail segments at prime shopping malls in Foshan included early childhood education centers, fitness centers and pet care centers. Experience-led retail has become a new leading source of leasing demand. Amid fierce competition, operators are seeking to create a distinct retail environment by adjusting the tenant mix, introducing fresh and prominent brands. For example, Nova introduced popular brands Sisyphe Park Books & Up Coffee and HIMO Photo Studio to attract younger shoppers. Source: research 13

14 Foshan Urban Prime Retail Market Market Dynamics Rental RMB/sq m/month By the end of 2017, average prime retail rent dropped 0.6% y-o-y to RMB281.9 per sq m per month owing to the opening of new projects and ongoing tenant mix adjustments in some existing malls Average Rental Significant Projects Under Construction Name Submarket GFA (sq m) Year of Opening In Joy Enjoy Guicheng 55, ipark Guicheng 50, Wangfujing Mall Jihua Rd. 170, Xinfugang Plaza Guicheng 100, Rainbow Mall Kuiqi Rd. 100, Polly Mall Foshan New Town 80, Foshan s urban prime retail market is set to receive approximately 590,000 sq m of new retail supply in The overall vacancy rate is expected to rise in the short term as the market digests the large volume of new supply set to come online. Rental growth might experience a downward pressure. A number of retail properties are carrying out tenant mix adjustments and facility upgrades as younger shoppers are increasing demands for higher quality services and popular brands. Experience-led retailing will likely continue to offer the city s shoppers with a variety of options and become a new trend for shopping malls to turn to in order to boost footfall traffic. Source: research 14

15 Foshan Urban Prime Retail Market Future Supply ( ) 新世界中心 3 期 sq m 700, , , ,000 Capital Mall 180 Xinfugang Plaza Rainbow Mall 清华城华贸中心 Guorui Shopping Center Foshan Vanke Plaza 300, , ,000 0 Greenland Plaza Wangfujing Mall Xing Xing Plaza In Joy Enjoy Suning Plaza ipark Jinhai M-CITY Nanfenghui Plaza Polly Mall Foshan New Town Guicheng Jihua Rd. Kuiqi Rd. Zu Miao Huangqi Source: research 15

16 Business Contacts Kelvin Li Managing Director, Central China General Manager, Guangzhou & Zhengzhou James Shepherd Managing Director Research, Greater China Gracie Miao Senior Manager Research, Central China Nicole Xie Assistant Analyst Research, Central China 45/F, CITIC Plaza Office Tower 233 Tianhe Bei Road, Guangzhou, China Tel: cushmanwakefield.cn WeChat ID: DTZ_China Disclaimer This report has been produced by for use by those with an interest in commercial property solely for information purposes. It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources which believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete. No warranty or representation, express or implied, is made as to the accuracy or completeness of any of the information contained herein and shall not be liable to any reader of this report or any third party in any way whatsoever. shall not be held responsible for and shall be released and held harmless from any decision made together with any risks associated with such decision in reliance upon any expression of opinion in the report. Our prior written consent is required before this report can be reproduced in whole or in part All rights reserved.